Rents soar, with Downtown apartments 95 percent full.
You’ll better understand the popularity of Downtown’s luxury living if you add up the comforts involved. Apartments have high-end finishes, spacious designs with open floor plans, stainless appliances, exquisite views of the city and its surroundings, and an abundance of building amenities that may or may not include fitness centers, swimming pools, rooftop decks, spas, valet parking, cocktail and coffee bars in the lobby, and more.
By today’s measurements most, if not every, residential construction projects underway in Downtown Columbus could be considered luxury housing, at least to those tracking the Downtown residential scene, including Rob Vogt, managing partner of Vogt Strategic Insights.
“When you consider the cost of land, the cost of materials and financing, the costs to build the project, I think just about everything being built and opened today Downtown is luxury housing,” Vogt says.Like what you’re reading? Subscribe to our weekly newsletters.
Typically, rental units may range from $2 to $4 per square foot for a one-bedroom, 850-square foot apartment. That means rent will range from $1,700 to $3,400 per month, he adds.
Despite rents that equal or exceed mortgage payments for most first time homeowners, demand for luxury living is strong. Downtown apartments have a 95 percent occupancy rate with more than 9,300 residents, says Marc Conte, deputy director of research, planning and facilities for Capital Crossroads Special Improvement District.
In the best-case scenario, up to 3,000 additional new residents could be moving into the central city by the end of 2022, Conte says.
Currently, 15 residential projects are underway, adding 1,514 more units. Another 19 proposed projects would add more than 3,200 units, according to Capital Crossroads.
Despite this energetic construction scene, building is still not likely to match demand in the long run, Conte says.
“The general consensus is, regionally, we are not building enough housing for people moving here, and we are now seeing that even for marginal apartment housing the rents are starting to go up,” Conte says. “One thing to note is that since the last recession, almost all new units Downtown have been for rental, not for sale.”
The Downtown lifestyle—offering a close proximity to a vast number of the region’s best restaurants, cocktail lounges, festivals, theaters and other entertainment venues—appeals to big-earners in the millennial generation because nothing like it exists in the suburbs. And it also draws baby boomers with empty nests.
Much of this apartment construction is from the ground up, in part because so many older buildings have already been renovated. But the market’s footprint in terms of location is extending, Vogt says.
“No one in their wildest dreams would have imagined building luxury apartments in Franklinton 10 years ago,” he says. “I see a very bright future for Downtown, in part because we can’t build the kind of housing millennials want in the suburbs.”