Sign of the times to come?: The Woodlands opens sales office on the Downtown Mall
On Wednesday, Gropen sign and display company employees Darrell Muler (standing) and King Scott were busy putting the finishing touches on The Woodlands latest marketing move– a swanky new sales office across from the Mudhouse, which will join the Ryan Homes sales office with an address on the Downtown Mall. The office opening came just in time for Wednesday's groundbreaking for The Woodlands, a $60 million luxury gated condo resort community south of town on Sunset Avenue extended, which is being marketed almost exclusively to wealthy college students...or rather, their wealthy parents.
As readthehook.com/blog reported, the local Woodlands is one of seven nearly identical 'Woodlands' developments that the Atlanta-based Dovetail Companies have been promoting in college towns in Georgia, Tennessee, South Carolina, and Texas. Featuring 24-hour security, swimming pool, state-of-the-art weightlifting and cardio studio, movie theater, tanning salon, practice putting green, sand volleyball courts, and a shuttle bus to cart students to and from UVA, The Woodland's appears more like a spring break destination than student housing.
Atlanta-based developer Nathan Metzger and partner Coran Capshaw did the same thing in 2003–opened an off-site sales office on the Mall (where the Charlottesville Community Design Center is now) when they were developing the Riverbend Apartments on Pantops and Walker Square in Fifeville. At the time, we were in the midst of a luxury apartment complex boom of sorts, as developers believed there was money to be made renting luxury units. Six upper-end complexes containing close to 1,300 units had been planned, built, or were under construction between 2002 and 2003– more units in one year than the previous 12– including Barclay Place on Georgetown Road, Lakeside on Avon Street, Carriage Hill on Pantops, Jefferson Ridge on Sunset Avenue extended, Stone Creek Village on Route 20 South, Avemore on Stony Point Road, and Riverbend and Walker Square.
However, almost as soon as they were built, local developers began to worry.
"I think the market is way overbuilt– and getting worse," Metzger told the Hook in March of 2004.
And even before that, developer Rip Cathcart, who built the first of these luxury developments–Lakeside and Carriage Hill– had his doubts. "Nobody would deny we're going to be in an overbuilt situation here," he said in the spring of 2003.
Those predictions turned out to be true. Still on the tail end of a hot real estate market, developers began frantically converting their rental apartment complexes into condos and selling them. In fact, Cathcart says he sold 108 of his units at Carriage Hill in the last year, and says he counts 11 such conversions of apartment developments. Ironically, this trend during the last few years has turned the situation in 2003 upside down.
"The rental market, as far as landlords are concerned, has improved dramatically," says Cathcart, explaining that the condo conversion trend has lowered the inventory of available rental properties, while the slumping real estate market has more people looking to rent. According to Cathcart, all his remaining rental properties are occupied, and the overall occupancy rate in the area is around 98 percent. Meanwhile, though condo sales have been robust compared to residential sales, it's the developers trying to sell condos who are feeling the squeeze.
So how might The Woodlands expect to fare in this new market?
"The student market may not have slowed as much as the non-student buyers' market," says Cathcart, who admits he's not as familiar with the student market, "but I can't imagine it's going to go gangbusters."
Still, he thinks The Woodland's idea of promoting the "kiddie-condo" strategy, something he says has been going on in town for years (parents buying a small place where their kid and his friends can live for fours year, then either keeping it as an investment or selling it to parents of incoming students), might just work.
And, of course, corporate developers like The Dovetail Companies and Ryan Homes, who are loath to take risks and fiercely protect their bottom lines (they wouldn't be corporations if they didn't), wouldn't be installing fancy sales offices on the Mall if their accountants and marketers didn't think the numbers would add up.
As one savvy readthehook.com/blog commentator, a.k.a "Stormy," pointed out, the Jefferson Ridge and Eagles Landing condo communities are both already on Sunset Ave Ext., and College Park/University Place is over on Old Lynchburg/5th St. Ext. Plus, the Biscuit Run development is coming to that side of town.
"If someone were smart," says 'Stormy,' "they’d try to open some nice retail on that end of town”Š maybe the county and Capshaw can get together on the 5th/Avon connector and get the retail built back in there."