Burst of New Luxury Rentals in Uptown
What’s behind the burst of high-end rentals slated for Uptown?
If you haven’t been paying attention, a new 55 unit, mixed use project just broke ground at Lake & Knox (see, “Watch This Space“). Last month, Southwest Journal reported that a 216 unit luxury rental project is now going up a couple blocks to the east. Yet another rental project, “The Ellipse on Excelsior” — located about a mile southwest of Uptown — is now complete and ready for occupancy.
One factor spurring the development of high-end rentals is that the For Sale market remains soft, with lots of inventory (particularly in the upper brackets).
Another is that luxury rentals are what lenders will finance these days (see, Factor #1).
But one of the biggest reasons has to do with a now-defunct local broker, “Financial Freedom Realty.”
In retrospect, the emergence of flash-in-the-pan Financial Freedom — perhaps along with Denny Hecker plunging into the housing market — were the two, best signs of a market top, circa 2004-2006.
Unlike Hecker, Financial Freedom didn’t break any laws.
But in the course of (cheaply) converting hundreds of affordable Uptown rentals into condos, it dramatically shrank the supply of same and set the stage for new construction.
(Financial Freedom also left behind a trail of critics and displaced Uptown residents while giving “condo conversions” a bad name — but that’s another story.)
So, why cater to the well-heeled?
For the same reason developers like to build $1.2 million “spec” homes rather than $500k ones: the margins are better.