Ann Arbor will get a look at its largest downtown condominium project to date when The Morningside Group of Chicago launches sales of Liberty Lofts on March 5.
The company will build 68 condos in the former Eaton Corp. factory on the western border of the business district. Units will range from 800 to about 2,000 square feet.
About one-third of the condos will sell for $300,000 or less, said Morningside’s Ron Mucha, a partner in the project.
“Our goal was to keep the average unit size as low as possible to make them affordable to a wide segment of the market,” Mucha said.
Marketing begins as the city’s effort to increase downtown housing options gains momentum and new uses for nearby property – both city and privately owned – take shape.
Liberty Lofts adapts the former Eaton factory to 68 “soft lofts,” a term that denotes a blending of traditional condominium styles with some of the industrial flavors factored in true factory conversions.
In soft lofts, buyers typically find loft staples like expansive windows, exposed ductwork and brick; but those aspects are tempered by finishes like drywall and hardwood flooring.
Morningside started the project in late 2003 when it signed a purchase agreement with Eaton Corp. to buy the 125,000 square foot industrial complex on the western edge of downtown.
Rezoning – approved in 2004 – was one of the first steps taken toward the building’s residential reuse.
So was approval from the Historic District Commission as amenities sought by homeowners – like balconies and high performance windows – confronted the realities of the former factory.
Now the company is moving full-bore toward the marketplace. Plans include taking the existing five-story building down to its concrete frame, demolishing ancillary buildings to the west and starting construction on a new, five-story building that will form an L-shaped structure.
An existing 20,000 square foot, single story building with access from West Liberty Street is being marketed for retail use.
Morningside stands on condo success in other markets – including Royal Oak – as its foundation for the Ann Arbor project.
The companies $50 million, 67 unit SkyLofts condos in Royal Oak inaugurated that city’s downtown condo boom, which in turn revitalized its retail offerings and prompted other developers to enter the market. Up to 800 additional units were planned by late last year.
The scenario has been watched closely in Ann Arbor, a city many developers define as similar in attitude to Royal Oak but bolstered by the presence of the University of Michigan.
Ann Arbor’s downtown condo history includes the adaptive reuse of The Armory builidng in the late 1990s, when developer Ed Shaffran converted the building at North Fifth Avenue and Ann Street to 13 high-end condos.
Syndeco Realty Corp., the real estate arm of DTE Energy, developed the 54-unit Ashley Mews. Sales for that project lagged during the recession as potential buyers cited concerns over design and a disconnect between their needs and unit pricing – at about $280 per square foot, or around $450,000 for a brownstone.
But among the wave of new developer interest is the Denali Group, which also develops projects in Royal Oak and plans to build 21 condos on East Liberty Street. That project, Lofts 322, gained 18 sales commitments during its sales launch in February (See Business Review, Feb. 17-23).
Mucha said that he success is a good sign that buyer interest is strong for downtown condos.
“To move forward, we want a comfort level that the market is there,” Mucha said.
Creating the right product
Both Mucha and Denali principal Mark DeMaria stress that the product has to be right for downtown condos.
While the price per square foot for many units – from Ashley Mews to Sloan Plaza on East Huron Street – hovers under the $300 per square foot price, the size and configurations need to appeal to a broad number of buyers in the two demographis that will be a big part of the buying pool: young professionals and empty-nesters.
That’s part of Morningside’s drive to ensure a range of price points at Liberty Lofts, Mucha said.
While 1/3 of the project will be in the $300,000 range, the average square footage will be about 1,200, he said. That includes some 2,000 square foot units that include a spiral staircase to a private roof top terrace adjoining a 200 square foot room.
The property’s reuse marks the project as distinctive to Ann Arbor, Mucha said.
“The existing manufacturing plant is one of a kind, and it will never be replicated in the downtown,” Mucha said.
“This is a unique, limited opportunity.”
The one-site sales coordinator will be Barb Eichmuller. Hobbs and Black of Ann Arbor were architects on the project.
Paula Gardner covers real estate and development for Business Review.
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