Fact Finder: New deals on City Center lofts

The nation’s economic recession and the sluggish real estate market are having a good news/bad news effect on Birmingham’s City Center.

Even though residential sales are slow, another popular option for living in town has recently picked up.

Expensive lofts in Birmingham’s City Center are more affordable because they’re now available for rent.

The economy is shaping Birmingham’s City Center and the recession could actually help grow the downtown residential community.

The historic Burger-Phillips building, built in the late 1920s, is one of the latest additions to Birmingham’s popular loft district.

Tom Carruthers of Carruthers Real Estate Company recently converted the building on Third Avenue North into apartments and retail space.  Carruthers said,  “The building has 34 units. A combination of one and two bedroom units, incredible views of the skyline, the tall buildings in downtown. We have easy access to parking, the parking deck is across the alley.“

Carruthers said this project is also an example of how developers are competing with the economic and real estate slump.

The units in that building are not for sale.  They’re for rent.

Carruthers said, “The rental market is a good bit stronger today, than the for-sale product, and as a consequence a number of the condo projects that were at one time only for sale, they’ve begun to rent some units.“

It’s a fact that Birmingham’s City Center includes more than 3,200 residential units.  More than 65 buildings include living space.  Of those, 32 are now rental buildings.  Around a year ago, a number of developers have shifted from plans to do condos to doing rental apartments.

With a soft residential sale market, many lofts stay empty, or on the market longer. But it hasn’t stalled residential growth in the heart of Birmingham. 

Mike Calvert with Operation New Birmingham said, “Every one has to be some where and people want to be in an urban environment and rental apartments still have a strong market in the City Center.“

According to Operation New Birmingham, within a year, 4,300 people will be living in the City Center.

Tom Carruthers believes that will expand other businesses.  “The more people that end up living downtown, the better off we all are, the more likely we are to get better restaurants, more places to go at night.”

That also means long-term, many renters will stay. 

Mike Calvert believes those renters are good candidates for purchasing condos in the future.

Developers agree that local rental customers are top purchasing candidates.  Winning their business now can pay off when more people can afford buy.

Carruthers said,  “We designed every thing in this building eventually a for sale product, so in several years, we can convert to condominiums and sell these units to home owners.“

While the popularity of rental is becoming popular in the City Center,  the news is not that grim for the sales market.  Recent high gas prices drove up interest in living close to town. That had a ripple effect which helped insulate downtown real estate values from the fast decline many other areas experienced.