Bucking The Trend

COLUMBUS, OH - When most condominium buyers have quickly fled to the sidelines, developer Jeff Edwards is pondering an important question. Should I build more townhomes or one-bedroom condos next? Edwards Cos.' Neighborhood Launch project, which covers several city blocks east of the intersection of 4th and Gay streets, is one of the exceptions to the recent condo downturn. The neighborhood aspect of the project - Downtown condos you don't need an elevator to reach - is a major selling point.

So, too, are the unique finishes and architecture, not to mention a temptingly low mortgage rate and partial property-tax abatement. Edwards has nearly completed the first 47 units of the 300-unit project and this spring will begin building the next phase.

The project is drawing star power, of sorts. Ohio Secretary of State Jennifer Brunner and her husband bought two units and turned them into one. Former Ohio State University football player Anthony Gonzalez owns a unit, too.

Twenty-seven units have been sold. Edwards said sales are about 30 percent behind the number that Edwards Cos. projected when it kicked off Neighborhood Launch sales in 2007. Yet even at that pace, Edwards doesn't hesitate to label the project a success. "For us to be at 70 percent of projections from three years ago is a home run today," he said.

Edwards is confident enough in the project that he's planning the next phase. Sometime this spring, Edwards Cos. will begin building one of two styles of condos, depending on demand.

The first would be a combination of the townhomes and flats that will reflect the majority of the project's current construction. The traditional-style project would begin at E. Gay Street and N. 5th Street and proceed east nearly to N. 6th Street. The "Bishop's Walk" phase will include a mixture of condo types. Prices have not been set.

Another building planned for the second phase is a five-story structure on the northeast corner of 6th and Gay streets that will include mostly one-bedroom flats. Edward said he'll determine which will kick off the construction depending on which types of units are preferred in the final building of the first phase, which is going up along N. 5th Street.

Condo sales Downtown peaked in 2006 at 281, according to data from Community Research Partners. They tumbled by more than 50 percent in each of the past two years. But Columbus real-estate analyst Ken Danter thinks that won't be the case with Neighborhood Launch because it's creating a suburban feel.

"A lot of the properties that struggle are isolated ones," Danter said. "He's brought critical mass to the neighborhood and has become the neighborhood. It's much like the area around Miranova and Waterford. It defines the neighborhood, then makes those properties acceptable to a much broader range of people."

Median sales prices of Downtown condos also are dropping, from $299,543 in 2006 to $263,491 through August 2008. Many developers are homing in on the $200,000 price point, including Lifestyle Communities, which is expected to have many units in that range in its Annex Condominiums at RiverSouth. Prices have not been published for that project, which is expected to be completed in late summer.

Neighborhood Launch has several small condos available for less than $200,000, even though its well-appointed townhomes can easily top $500,000.

Other factors boosting the project are tax breaks and low mortgage rates. Because it's part of the city's Downtown condo program, buyers receive a discount of 75 percent off their property tax for 10 years.

Also, Edwards Cos. worked with National City Bank - now PNC - to offer low-interest loans through the bank's community development corporation that are more than 1 percentage point below advertised rates. That's made 30-year loans available for Neighborhood Launch at fixed rates of less than 4 percent.

Edwards said he hasn't applied to the bank to make the loans available for the second phase of Neighborhood Launch.