12/6/2011 - Asheville area seeing apartment building boom
by Jason Sanford - Asheville Citizen Times
ASHEVILLE -- More than 800 new apartment units are under construction in Buncombe County in a wave of activity driven by a still-sluggish demand for houses.
Add to that another 312 units planned at a development that won the first round of Asheville City Council approval last week, and city's seeing an apartment building boom.
"There's no doubt about it," said James H. Diaz of CoveStar Investment Realty Advisors, an Asheville consulting, brokerage and development firm. "There's a market opportunity here that's being filled."
At The Lofts of Reynolds Village, a mixed-used development under construction in Woodfin, about half of what will be 200 units have been built, and manager Lesley Groetsch said she's been busy showing one-, two-, and three-unit apartments to potential renters.
"I don't see demand easing because I don't see banks easing up lending regulations," Groetsch said, "and yes, it's difficult to find an apartment in Asheville."
With rent ranging from $870 to $1,900 a month, developments such as The Lofts are attractive to a variety of renters, Groetsch said. Customers range from homeowners who sustained losses in the real estate crash of the Great Recession to older residents opting out of the hassle of home ownership, she said.
"Then you have people that have difficulty getting financing to buy a home, plus those in any market just starting out or looking for short-term leases," she said.
Demand has been strong all year, said Tom Leslie, president of Leslie & Associates, which manages 1,300 apartment units, mostly in Buncombe County. "The current trend is that occupancy is remaining strong," said Leslie, who added that he's seen more and more younger professionals seeking apartments rather than home or condo ownership.
Several projects under construction were initially slated as condo developments. But when the real estate market nose-dived, developers went back to the drawing board.
That was the case with the Weirbridge Village development on 20 acres along Hendersonville Road, for example. Original plans called for condos ranging from $210,000-$650,000 for the first phase. Now the plan is for 284 apartments in 11 buildings. Rent on the new apartments, which range from 543-square-foot studios to 1,669-square-foot three-bedrooms, varies from $700-$1,550.
The Aventine, on the other hand, is a new project seeking City Council approval. Plans by Flournoy Development Co. call for 312 apartment units on Long Shoals Road and Clayton Road in south Asheville. Council voted 4-3 in favor, but the development will need a second hearing to get the green light.
Diaz said developers across the country are moving into smaller markets similar to Asheville as they seek projects that are financially feasible for them. Those projects are mostly infill developments that fit a formula, he said.
In the Asheville area, one potential area for placement that has remained elusive for developers is a new complex close to the downtown business district, he said.
"I think we'll see this continue until the real estate market come back and we start to reach an equilibrium" in terms of renters and available units, he said.