Olde Town Rental Market Update

 

 

 Hi, Today we are talking about a rental market update for the Old Town neighborhood.

 

Overall, in Old Town, we see rental rate rising.  We see young professionals increasingly being tenants in the Old Town neighborhood. They want to be close to downtown work. We’re seeing a trend that buyers and tenants tend to be overwhelmingly young and female. Tend to be young professionals.  And we’re also seeing more families with children moving into the neighborhood.  

In the video you’ll see a diagram of the rent rate curves.  The curve can help you visualize rental rates as a function of size, so you  can deduce that if you have 500 SF apartment, on average your guessing about 80 cents a foot.

The next chart is a diagram of rent per SF against average score–we gave each unit a ranking from one to five for condition and location.  And so we averages those two numbers together to give us and average score and of course, you can see here that there is a correlation between location and the rental rate.   Now, it’s not as tight as you would expect. so there are some people that are leasing units that are not quite that nice or not in a great location and their still getting $1.05 a square foot.

You know, so I think would tell you if it’s not a perfect market in Old Town and that there’s a lot of demand and sometimes people are making due with units that aren’t quite that nice.

The overall trend of the rental rates is rising, so here you see that over the past four years the rental rates have gone from an average of 80 cents a square foot to about 87 cents a square foot. So your seeing slow and steady increase in the rental rate.

We also have a shown the changes in the rent curves over time.    You see a for a 500 square foot apartment it would give you about $1.10 and then these are the two curves for 2019 and 2020. So you see pretty evenly spread here. We actually removed a few rentals form 401 Broad, listened to their legacy, rents, they actually brought the curve down so when you remove those outliers, the curve actually fits pretty steadily in there.

So, that is our Old Town rental market report. Overall, a great trend, we are seeing a lot of good things happening in the neighborhood.

We would love to hear from you. What are you seeing Downtown?  What are you experiencing with rental rates? Please like and share, comment below, subscribe. We’d love to hear from you and thanks for watching, and have a great day.

 

Downtown Residential Market Report

https://www.youtube.com/watch?v=CGggUa-lkUw&feature=youtu.be

Today we’re going to cover one of our pet subjects, the Downtown Augusta residential market, specifically Olde Town.  Click here to download Olde Town Q4 2019 Market Report

 

What’s going on:  Prices are rising–homes bought at retail (livable, decent condition) have risen from about $63/SF on average to just under $80/SF on average over four years–that’s about a 26% increase.  As a whole, the average price has risen from about $30/SF to about $57/SF–almost double–over the past four years.  

 

Part of what’s happening is that there are lots of abandoned and derelict homes that have been purchased, along with the rise of young professionals moving downtown.  The average buyer in Olde Town today is a young, single, professional female.  She is educated, trendy, and wants to be connected to the neighborhood and the downtown.  

 

In 2010 when I bought my home in Olde Town, things were much different.  The neighborhood was ‘busier’–more foot traffic, and there was a significantly higher percentage of section 8 housing in the neighborhood.  Over the past ten years families have moved downtown–many connected to First Presbyterian Church and Christ Community Health Services (a non-profit heath center located in the middle of Olde Town).  The rents started rising, investors started buying and renovating the homes, and soon things started changing.  

 

In the past two years is when I’d say I’ve seen the most change.  The main section 8 property in our neighborhood, Olde Town Apartments, had their tax credit expire and has been renting and selling their properties at market rate (primarily to young professionals).  Many of the derelict properties on the southern edge of the neighborhood have been demolished, and plans are underway for new homes to be built.  

 

My prediction is that the trends we see will continue, and that home values will continue to climb.  I think that if the trend continues, in the next two years prices/SF for homes sold at retail will surpass $100/ft, at which time we will hit a tipping point which will open the neighborhood to new construction, and we will see many of the functionally obsolete homes demolished and new homes built.  All this is great for our city, and for the greater urban community in Augusta, GA.  

 

What are your thoughts?  Where do you see the market downtown headed?

Downtown Rental Market Update

 

Today we’re going to be discussing the Olde Town Rental market update. Click here to download the Rental Study.   

 

Overall, we’ve seen the rental rates in Olde Town (Downtown Augusta’s primary residential neighborhood) climb from an average of $.67/SF to just under a dollar per SF over the past four years.  That’s a 32% increase, about 8% per year. What’s going on?

 

Well, as we’ve already mentioned, Cyber and Medical young professionals are choosing to live downtown.  That’s driving up rents and housing prices.  Also, investors are renovating properties, and so we are seeing more available rental properties that are in in decent condition.  

 

A decent case study is 107/105 Fourth Street.  We recently helped a buyer from Virginia acquire those apartments.  The previous owner had owned them for over 15 years, and they were in pretty rough condition with low rents. The new owner is going to make an investment into renovating the units, and with the help of professional property management, they will lease them at market rates.  The location of the property is great–the condition was terrible.  Now that complex (surrounded by young, professional homeowners) will probably target young professional or medical tenants, and we’ll see it on our rent study next year, my guess is on the higher end of our graphs.  

 

You’ll also see in the graph a strong correlation between the “Score” and the price per foot.  Our scoring system is a somewhat arbitrary numbering of properties by both location and condition from 1 to 5, and then averaging these two numbers together.  Thus, a property with location of 4 and condition of 5 scores a 4.5 in this measure.  The number again is somewhat arbitrary, but the correlation is quite strong.  So I would assign a property in rough condition and poor location an estimated rental rate of .65/ft, while a property with a good location and great condition an estimated rental rate of .95/ft.  Note that this measure doesn’t take into consideration size, which the first graph makes clear is highly correlated with the rental rate.  

 

I think this is great news for our Downtown rental market.  Augusta is changing, and I believe that the rising tide will lift all ships.  

 

What are your thoughts?  What has your experience been in the rental market?  

Parsons Corporation to lease space in Georgia Cyber Center

Parsons Corporation–A Defense, Security, Infrastructure and Intelligence Company with 16,000 employees and $3.6 Billion in Revenue–is the latest company to lease space in  the Georgia Cyber Center.  It is estimated that they will create twenty-six jobs with the potential for more in the future.  

 

According to Wikipedia, Parsons Corporation provided jet propulsion facilities during the cold war, and worked with nuclear, chemical weapons, as well as working in systems design for aircraft, missiles, and rockets.  Today Parsons focuses on defense, infrastructure, and security, and handles many federal and municipal agencies along with private customers. 

 

According to their website, Parsons has worked with the US Government for over 30 years providing technical and cyber intelligence solutions.  The Cyber Center will be a great match for them and they will be a welcome addition to Augusta!  

 

What are your thoughts about Parsons coming to Augusta?  It seems the nation’s intelligence and cyber contractors are coming to Augusta!  Do you think they will bring their whole operations here or just small teams? 

 

Additional Links:

Cyber Center Website
Press Release

 

 

3rd Quarter 2019 Olde Town Market Update

There are a lot of good things happening in Olde Town!  I had the privilege of turning over the role of President of the Olde Town Neighborhood Association to Bob Trescott, who’s been serving as Vice President.  As the father of five and brand new twins, I needed to trim my commitments, but I was encouraged to see lots of new and excited people with fire and energy to move the neighborhood forward!   

As far as real estate goes, many homes are under renovation and we’ve seen some notable sales driving up the prices.  The Renaissance Apartments at Third and Broad were foreclosed on by HUD last week, and likely will be sold as market-rate apartments in the next few months–that will be great for the neighborhood. We’ve definitely seen the prices rising–in 2016 and 2017 the average price per foot was (38) per square foot, and in 2019 so far it is (72) per square foot!  We are definitely seeing Gentrification is coming to the neighborhood. Also Olde Town Apartments is continuing to renovate and lease units.  

 

Recent Notable Sales in Olde Town:

102 Third Duplex, Sold to Jeremy Rueggeberg for $165,000 on 5/16/19

222 Ellis, Sold to Kelsey Kalyta for $122,870. (Not yet Recorded, should be soon)

220 Broad Sold to James Demons for $61,465.  They are already renovating and this will be a great home.  

224 Greene, Sold to Emily Beatty for $139,000 (Not yet Recorded, should be soon)

235 Broad. Sold to Shivaun Delisser for $115,000 (Not yet Recorded, should be soon)

Under Contract: 307 Broad.  This was listed by Atul Sinha, appears to be under contract at almost full price.

Under Contract: 224 Broad.  This duplex is under contract at almost full price, and should be closing in the next two weeks. 

 

Rents are also rising.  We’re estimating a $0.20 PSF increase on average across rental units in Olde Town over the last 2 years.  

 

Here’s links to two properties we have listed in Olde Town:

407 Third Street

260 Reynolds Street 

 

What are you seeing in Olde Town?  Are you a resident or tenant?  How has the neighborhood changed?  What changes have you seen?