When did DealPoint Merrill (“DPM”) first approach the City of Richmond Heights about its interest in Richmond Town Square?
DPM’s interest in the Richmond Town Square Mall (“Mall”) began around July of 2017. At that time, our interest was focused solely on finding an alternative use to the Macy’s department store building that had been vacant since early in 2015. It was only after construction on the vacant Macy’s building, to convert it to a CubeSmart indoor storage facility, had begun that our interest in the Sears property began to coalesce.
What is the marketing plan for this project? To whom will it be marketed? When is the marketing projected to begin?
The marketing will commence upon breaking ground, which is expected to be 4th quarter of 2021. The marketing plan will include many of the Cleveland area Submarkets. More specifically, there are 13,525 apartment units in the greater Cleveland area, or about 8% of the Metro stock (163,955 units). The current occupancy rate in the submarkets is approximately 92.6%, just slightly below the Cleveland Metropolitan area (94.4%) where supply is tighter. The five-year average occupancy: 94.1%. The five-year average annual supply: 96 units. However, most of the current offerings (71%) are old, having been built prior to 1970. Just 7% of the surveyed apartments have been built since 2000 (vs. 14% in the Metro area). In short, the marketing will include all submarkets, with tremendous potential to tap into renters thirsty for new, Class-A options.
What is the definition of “luxury” as utilized in the description of the proposed apartments?
DPM’s goal is to design a project that has high-end finishes that you would expect to find only in expensive homes, not in a moderately priced apartment; These amenities and finishes will include stainless appliances in the kitchen, granite/stone/concrete counters, stained floors or reclaimed hardwood, high ceilings, an abundance of large windows; with high-quality finishes, contemporary molding, baseboards, etc. Every aspect of every apartment will be designed to look as if custom finished by a talented interior designer, which is exactly what we are doing!
If “location, location, location” is a factor in real estate, what, if any, plans do DPM have to purchase and/or demolish the remainder of the Richmond Town Square?
The Richmond Town Square site checks many of DPM’S key boxes for apartment development and acquisition of the mall is now complete. Specifically, the property is situated within a large cluster of retail businesses. With multiple restaurants, a grocery store (Dave’s Market), fitness center, cinema, drug stores (both CVS and Walgreen), auto care, banks and other services all at or around the project site, Belle Oaks Marketplace will offer a plethora of amenities at each resident’s doorstep. This is a major plus, since proximity to “convenience” retail is among the top desired locational elements among renters. Further, excellent access to major entertainment, retail and recreational venues (Richmond Road is a major arterial, with I-271 2.6 miles east) places Richmond Heights and Belle Oaks right in the heart of it all. The site has superb visibility from Richmond Road, supporting the notion that drive-by traffic remains the second most influential source of leasing prospects for Gen X renters (42%) and Millennials (39%), after Internet leasing services [ILS]. The Belle Oaks property has ready access to public transit (RTA route 94) and buses run a regular schedule to and from the property with connections to University Hospitals Richmond Medical Center and Euclid Hospital, Cuyahoga Community College Eastern Campus and University Hospitals Ahuja Medical Center to the South. The elementary, middle and high schools and Richmond Heights branch of the Cuyahoga County Public Library are within approximately 1 mile of the proposed development.
Please describe the “luxury apartment” units in terms of size, features, and pricing?
Our project rents for this new product will be competitive with the Beachwood/Mayfield submarket. What will set the Belle Oaks development apart from the other nearby offerings is the level of amenities and quality of build that will be intrinsic and unique to Belle Oaks Marketplace.
Monthly rates will start at $1,540 for single bedroom units and top out at $2,547 for two bedroom units. Prices are subject to change without prior notice.
What is the profile of prospective tenants to whom these luxury apartments will be marketed?
After review of commute distances, demographics, concentration of competitive apartment projects, DPM concluded that the Primary Market Area [PMA] for Class A apartments at the Mall would be the area within an approximately seven-mile (7) radius. This area is very consistent with a 20-minute drive. More than 21,000 people work in the 44143 ZIP code but live elsewhere. This “inflow” of workers represents a key opportunity for this development to accommodate those who might desire to live closer to work if new, attractive rental options were available.
Our prospective renter will have a competitively-priced apartment product that will appeal to the following renter segments:
- Workers at local hospitals, the County airport, and other nearby businesses.
- Those employed in the University Circle area who are seeking a less-expensive, but brand new, apartments in a setting with urban elements (walkability) but in a less dense, less congested, less noisy suburban location.
- “Empty nesters” (Baby Boomers) who live in and around Richmond Heights could be interested in the convenience and flexibility of apartment living. These “renters by choice” are large and growing segment of the renter market nationally. The youngest of the Baby Boomers (now 54) are typically still in their peak earning years, with established careers, but contemplating new housing options since their children are grown/to cash out equity/to eliminate upkeep.
- Adult children who grew up in Richmond Heights who would like to remain local (or return home), but are unwilling to settle for outdated rental product.
- Seniors and retirees, who currently live in Richmond Heights, and surrounding areas in single-family dwellings, but are looking to downsize and move into a space where all of their needs can be found in a single, walkable environment without the headaches of home ownership.
Has the company been identified to manage the apartments? Is it local or national company?
A provider has not yet been identified. The property manager will, however, be a national firm.
What is the expected rental rates for the subject development?
The rent premium that applies in the Beachwood/Mayfield submarket to date reflects projects outside of Richmond Heights. A Walk Score search of “nearby apartments” for 621 Richmond Road graphically illustrates the lack of rental units in the area. We anticipate that rental rates for the Belle Oaks apartments will be in alignment with other submarkets in the area, but that the level of amenities and build quality will entice renters to locate, or re-locate, at Belle Oaks in deference to these other older, and less exciting offerings.