Urbanexus Update - Issue #116
H. Pike Oliver assembles this weekly selection of real estate and community development news. Some items are behind a paywall.
Finance
Refinancing an 825-unit apartment community
CBRE has arranged a $161.5 million Freddie Mac loan for the refinancing of Crystal House, an 825-unit apartment community in Arlington, just south of Washington, D.C. Crystal House is located in the Crystal City neighborhood near Ronald Reagan Washington National Airport and the site of Amazon’s future second headquarters. The property was originally built in 1965 and renovated in 2017. The borrower is a partnership between Roseland Residential Trust, which is a subsidiary of New Jersey-based REIT Mack-Cali Corp., and an investment fund advised by UBS Realty Investors LLC. Value of the asset was enhanced by December 2019 rezoning and site plan approval that almost doubled the existing density and significantly impacted the assessed value.”
Retail
PVH to close 162 outlet stores
In a move to streamline its North American operations and adapt to an evolving retail landscape that has been accelerated by the COVID-19 pandemic, PVH Corp. (NYSE: PVH) announced Tuesday that it will close all of its 162 Heritage Brands outlet stores and reduce its office workforce by approximately 450 positions, or 12 percent. PVH’s Heritage Brands include Van Heusen, Izod, Arrow, Warner’s, Olga and Geoffrey Beene. The Heritage Brands retail locations are expected to operate through mid-2021. The workforce reductions, which are spread across all three brand businesses of Tommy Hilfiger, Calvin Klein and Heritage Brands.
Office
Five workplace design experts from DLR Group, T3 Advisors, ZGF, and Gensler weigh in on how architects can help clients prepare for a strategic return to the office—and how we should be re-envisioning such spaces for the future.
Residential
Single-family permits slowed in May
Over the first five months of 2020 – and at the onset of the impact of the coronavirus, total single-family permits issued year-to-date (YTD) nationwide reached 348,898. On a year-over-year (YoY) basis, this is an 2.0% increase over the May 2019 level of 342,116, but a slowdown compared to April YoY rate of 8.5%.
Between May 2019 YTD and May 2020 YTD, 21 states recorded growth while 29 states and the District of Columbia recorded a decline in multifamily permits. The 10 states issuing the highest number of multifamily permits combined accounted for 64.4% of the multifamily permits issued. At the local level, below are top 10 metro areas which issued the highest number of single-family and multi-family permits.
Community development
Cut housing regulation to preserve the middle class Noting that house prices have been growing three times faster than incomes in the last two decades, OECD found that “housing has been the main driver of rising middle-class expenditure.” Moreover, OECD noted that the largest housing cost increases are in home ownership, not rents. Housing largely determines the cost of living. For example, in the United States, more than 85% of the higher cost of living in the most expensive US metropolitan areas is in housing. Fundamentally, housing affordability is not about house prices; it is about house prices in relation to household incomes. Housing affordability cannot be assessed without metrics that include both prices and incomes.
Medium-density neighborhoods — www.stantec.com
The all too typical development model of low-density subdivisions at the edge of the metro with high-density city centers has left many cities trying to find the “missing middle”. That search is even more poignant in the COVID-era as we acutely feel the need for connection to community and nature. Successes in places like Austin and Minneapolis show how we can create balanced options in density.
The accidentally resilient design of Athens apartments
Built quickly and on the cheap — mainly from the 1950s to the 1980s — these modernist apartment buildings (pronounced “Pol-i-kat-i-KEE-A”) created endless lines of concrete apartments with tiered balconies. When the polikatoikias (the term simply means condominium) were spreading across Athens in the 1950s, they did so in a city with urgent housing needs and little money to spend.
A funding system called antiparochi, allowed developers to avoid land costs by giving landowners a share of the constructed units when they were completed. Costs were kept down by using the Le Corbusier-developed Dom-Ino system, in which reinforced concrete pillars freed a building of the need for load-bearing interior walls. The resulting variety of apartments within the same building ensured a good deal of social mixing--wealthier people in the upper units and those of less means down below.
Planning in Tysons, VA, and outcomes 10 years later
Policymakers in Fairfax County, Virginia, passed an ambitious redevelopment plan for the Tysons area in 2010, in anticipation of a new Metrorail line, hoping to transform a suburban, car-oriented area into a walkable, transit-oriented downtown.
Ten years after its passage, Emily Hamilton (@ebwhamilton) of the Mercatus Center evaluates how well the redevelopment policies lived up to their stated goals of generating more multi-family housing in the area and creating a walkable downtown area. Fairfax County is demographically similar to many other areas facing a crisis of housing affordability, but is currently on track to meet its target of adding 80,000 more residents by the middle of this century. It has been less successful in achieving walkability, however – largely due to the legacy car-oriented infrastructure and construction of the new metrorail above-ground.
Regional and metropolitan dynamics
Private schools — www.seattletimes.com
Several major cities have more than 20% of K-12 students are enrolled in private schools. How much does that contribute to inequality?
Metropolitan economies and the COVID-19 crisis The new Metro Recovery Index presents data across a variety of indicators to provide a picture of the impact of the crisis (compared to a pre-crisis state) and the trajectory of recent change for both large and midsized metropolitan areas.
Resilience and sustainability
Going ‘deep green’ — www.nytimes.com
As technology costs have declined, more developers are creating buildings that can benefit the Earth by tackling pollution and save money by producing their own power. One of the latest projects of this type is Watershed, a seven-story office building in the Fremont neighborhood of Seattle that was completed this year and is now three-quarters leased. Watershed has a slanted roof that collects rainwater for use in toilets and a wide, welcoming entry staircase offering an alternative to the elevator.
Health and wellness moving from 'elective to essential'
For communities built around health and wellness—and the renters interested in living there—personal wellness must not only work hand in hand with public health and safety, but also accommodate the safety measures necessary to prevent the spread of COVID-19. Designers, developers, and analysts are approaching this task with new design strategies for safer versions of health and wellness trends, as well as concepts for change in existing communities.
Construction
Offsite construction myth vs offsite reality in the USA
In Europe virtually all of the wood framing is constructed using an offsite construction (OSC) system. It would essentially be as alien to a European to stick build a wood frame house, as it would be to buy a new car and have every single component shipped to your front yard and have a couple of local mechanics come out in a pick up truck with welding equipment and pneumatic tools to build the car. You simply wouldn't dream of it.To do so would be to ignore over 200 years of innovation and progress, since the industrial revolution. Yet in the US market, this is exactly how wood framed houses are built, without taking advantage of the last two centuries of innovation, and ignoring the benefits of computer modeling and digitization, modern CNC/robotic automation or factory-controlled conditions and quality systems.