Urban Living

With more than 200 new lofts scheduled to hit the downtown Tulsa market over the next three years, the demand for downtown housing is as strong as ever.
Just under 100 loft units are situated within the IDL, and most managers of those properties reported zero inventory; no property is less than 75 percent occupied.
Micha Alexander’s eight lofts, between Lansing and Kenosha avenues on Third Street, all self-built and mostly self-designed, have been at 100-percent capacity “for forever.”
“I don’t have a problem, and I don’t foresee a problem, filling up my units. My neighborhood is a little outside of downtown – in the shadow of downtown, is what we like to say,” Alexander said. “We have an opportunity to be different from the rest of the people over there. I do things on such a small scale. My opinion is, I do a high quality of finish of each one, and each one is slightly different.”
The number of loft apartments under construction downtown represent “hardly even an apartment complex,” said Richard Winton, property manager at the 25-unit, $5 million Philtower Lofts, 427 S. Boston Ave., where some of downtown’s first lofts came onto the market in 2006. “I don’t think [saturation] is a problem. If there were going to be 700-800, then that might be a different story.”
Demand for Philtower lofts continues to be strong, with an occupancy rate consistently at 100 percent.
“I think our occupancy rate will be easier to keep at 100 percent when there are more people down here. Right now, if you’re living down here, you’re kind of like a pioneer. It will become ‘normal’ to live downtown once you get these other projects done.”
Downtown lofts aren’t your run-of-the-mill, suburban apartments or condos. Many feature luxurious amenities, from maid, room and valet service that will be available at the lofts at the 72-unit Mayo Hotel, 115 W. Fifth St., to communal rooftop decks with stunning views of the downtown skyline, vaulted ceilings and exposed brick walls, like those available at 35-unit Tribune Lofts, 20 E. Archer St.
Most downtown lofts are being built into refurbished office buildings or warehouses, which creates that urban chic so in vogue with the young professional set.
“We’re a uniquely designed building,” said Michael Sager, developer of the 18-unit, $3 million First Street Lofts in the former Jacobs Hotel/Finals Building at 310 E. First St. “Six of our units are two-story, with mezzanines. It’s not like a two-story house – there are these platforms and catwalks.”
“Our lofts are going to offer services you can’t find anywhere else in Oklahoma,” said Macy Snyder, event coordinator and director of sales at Mayo Hotel & Lofts LP. “There aren’t any other lofts, even in Oklahoma City, that are above a hotel.”
“And, with gas prices going up, everybody is moving back in anyway, closer to where they work,” she added.
The Mayo Hotel and First Street Lofts projects are two of the three remaining loft projects that were awarded a portion of the $10 million in Vision 2025 funding for new downtown housing.
“I think there is still a lot of room for opportunity,” said Reuben Gant, president of the Greenwood Chamber of Commerce, which will soon manage the construction a $30 million, mixed-use development, coined Buck Franklin Square, at Elgin Avenue and Archer Street that will feature 24 loft apartments. “The demand has really not been met yet.”
“Hopefully, we’ll continue to be an attractive alternative to a single-family home. The market would be young professionals or recent college grads who aren’t really interested or prepared to become homeowners. Then there are empty nesters who have an interest in downsizing.”
“Downtown living is just in its beginnings,” said Chuck Wiggin, president of Oklahoma City-based Wiggin Properties, which owns the Mayo Building at 420 S. Main St., in which there will soon be 67 loft units. The project, one of the three Vision 2025 downtown housing funding beneficiaries, will cost nearly $30 million. First Street Lofts and the Lofts at Mayo were also rewarded Vision funding.
“With all the interest that will continue to build up in the downtown area and the interest in living downtown, I don’t think we’re going to run out of demand. We’ll have 67 units that will be coming in 2010. That’s just not a whole lot of apartments.”
Alexander continues to build loft apartments. While he doesn’t worry about the demand for his lofts and is encouraged by the interest in downtown, he isn’t as sure about sustained demand for mass-produced loft units.
“I’m encouraged every day. I get calls from people wanting to rent all the time. It keeps me going and building more space. But, I think if we built a whole bunch of generic housing, it would get pretty stale pretty fast. We need to keep doing what we can to make the new spaces more interesting and architecturally relevant.”
“Synergy” is a word heard often out of the mouths of hopeful loft developers. In fact, they’re banking on it.
“I think with all the activity that’s going on in the downtown market right now, all of these things are going to be better for us,” said Becky Weaver, vice president of property management at American Residential Group, which manages the Tribune Lofts.
“When the BOk Center opens, when the ballpark gets going, and the things that are going on around the Greenwood and Archer district, if that continues to grow – all of things are better for us. It brings more people downtown. The more people downtown, the more apartments or homes we have to provide for them. You build them, and they will come.”
“If you look at other cities for indications for what it’s like to have loft living, all these cities across the country are seeing a huge renaissance in downtown living. With $4 gas, I don’t think that’s going to change – it’s going to become more attractive,” Wiggin said.
“I think five years from now, you’ll see a lot more of these projects, you’ll see a lot more people living downtown, and you’ll see a lot more things going on downtown than what’s going on right now because you’ll have people coming downtown for more things and they’ll discover that downtown is really a cool place.
The opening of the BOk Center, plans for a new Drillers Stadium downtown and new restaurants and bars have started the revitalization of downtown, Wiggin said.
“You put all of these things together, and that creates a whole lot more activity and excitement. I think Tulsa is in for a pretty good run for awhile.”
Wiggin is so convinced, in fact, that he is eyeing other potential projects in Tulsa.
“We’re going to keep our eye on the ball, but we’re eyeing some things, and I hope we can do some more.”
Rather than worry that the lofts headed to downtown will lessen his market share, Winton anticipates an enlarged customer base as more downtown loft units come online.
“I think it will create more awareness about downtown living, which may help us. I think it will create a critical mass of population downtown, which will mean that you will start to get retail coming back,” he said.
Getting a loft project off the ground isn’t easy without capital – especially since many lenders aren’t exactly eager to lend to downtown residential real estate speculators.
“Wow, that is huge can of worms,” Winton said. “Lenders will not finance loft projects – that is, you have to guarantee a loan with outside funds or assets not the property or project in question.”
Downtown real estate developers aren’t without financing options, however. The National Trust for Historic Preservation will act as an intermediary between a developer and banks and arrange part of the financing using the Rehabilitation Tax Credit as loan guarantees.
However, “it can get complicated,” Winton said.
Many developers have taken advantage of the RTC, including those who built The Philtower Lofts and those building in the Mayo Hotel and the Mayo Building. The credit encourages the preservation and reuse of existing buildings by offering federal tax credits to the owners of historic properties.
Since the inception of the RTC in 1976, the credit has encouraged the rehabilitation of more than 31,000 historic properties, representing more than $31 billion in private investment.
Certified historic structures are eligible for a federal and state credit equal to 20 percent of the cost of rehabilitation. Properties built before 1936, but not eligible to be listed on the National Register of Historic Places or to be included in a certified historic district, are eligible for a federal credit equal to 10 percent of the cost of rehabilitation.
Snyder said the units at the Mayo Hotel will be available for lease for five years and will then be released for ownership, due to just one of the stipulations of the tax credit program. The Mayo Hotel lofts project also benefited from $4.9 million of the $10 million in Vision 2025 funding, as well as a recently announced $23.5 million from IBC Bank-Oklahoma. The total project cost is $40 million.
“I think they really wanted to get involved with downtown Tulsa,” Snyder said of the lender. “But, with the BOk Arena, the project kind of sold itself.”
“Typically, a lot of those kinds of projects are done on a pre-sale or a pre-lease basis,” said Ed Farris, senior vice president of commercial lending at MidFirst Bank. “If someone was coming in with a fairly new development, you’d probably want a number of pre-leases confirmed before you made a commitment to do the construction financing or renovation financing. Or, you’d want a significant amount of guarantor support.”
Not that the projects represent risky investments.
“That’s just the standard approach we would take with any kind of residential project in a redevelopment area, or an area that’s undergoing redevelopment and renovation,” Farris said.
MidFirst hasn’t been involved in any downtown loft projects, “but we have had preliminary conversations with some people about one, but it never got past the preliminary stage,” Farris said.
“It’s hard to make a categorical statement about whether you would do it or not until you’ve seen the project. It is breaking some new ground in Tulsa, which is positive for sure. It would be beneficial to enhance downtown residential activity, which is probably going to be the key to downtown revitalization.”
Funding for the Mayo Building project was cobbled together from private sources, tax credits and Vision 2025 dollars.
“Everybody who is involved in financing this project is very enthusiastic. The financing is falling into place very nicely,” Wiggin said, noting that the spread of financial resources has contributed to project delays.
Alexander found financing for his projects via slow but sure progress and a good relationship with his banker.
“My projects aren’t of as grand a scale as some people are doing around here, and I think I have a proven track record with the mixed retail and residential in this neighborhood, and I have a really great banker. We have no problem making our mortgage. I think they appreciate that.”?



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