John Wheeler is standing pat with his residential projects for now.
Orion Construction will have 615 residential units in the downtown core of Grand Rapids before long, including downtown and near-neighborhood projects, and that’s going to be the number for a while, said Wheeler, Orion’s director of business development and president of Orion Real Estate Solutions.
Orion’s two central downtown developments, Arena Place and Venue Tower, are nearly at full occupancy when combined. Arena Place’s 100 units are completely leased and Venue Tower’s leasing has been open a month, with 67 of 94 units leased.
With recently opened properties, also including Fulton Square, Eastown Flats and Gateway at Belknap, Orion’s residential properties are approximately 80 percent full.
“We’re way ahead of schedule,” Wheeler said. “The good news about our portfolio is we’re ahead of the curve with the other big projects.”
Wheeler said he’s happy the projects were able to open prior to other ground-up new builds with large apartment components. New York-based Time Equities Inc. has started on its 16-story, 202-unit building at 601 Bond Ave. NW, and Maplegrove Property Management and Rockford Development are in the middle of construction of 260 units at 234 Market Ave. SE. Still to break ground is the Studio C! project, which was approved by the Downtown Development Authority last week but has scaled back its residential component since it was initially announced.
Wheeler said Orion will hit pause on its downtown projects for now and shift toward the two ongoing near-neighborhood projects, River’s Edge, 1001 Monroe Ave. NW, and Heritage Place, 50 College Ave. SE.
“Knowing what’s coming online, that’s why we’re waiting,” he said. “We want our town healthy, and if one of us fails, we all fail.”
Near-neighborhood projects are a bit easier to take a risk on, Wheeler said, mentioning Gateway at Belknap replaced 119 residential homes and isn’t a surplus to the area combined with the recent demolition to make way for Grand Valley State University’s new projects in the neighborhood.
“It’s still a negative impact up there,” he said. “Did we create? No, we just replaced with new and better.”
Heritage Place is taking the place of an empty office building, adding new units to Heritage Hill.
“Those projects are 35 to 50 units, and they fill up,” he said. “People like new and living together with good amenities.”
River’s Edge is the next Orion project to open for leasing, likely this winter. Wheeler admits he might have missed the boat on a potentially larger project with the proximity to the river and a growing neighborhood, but circumstances shifted once the project was underway. He said he expects the 32 units in River’s Edge to fill up quickly when combined with indoor parking, an on-site farm-to-table restaurant and views of the river.
Wheeler still is bullish on the potential for downtown residential and said a small residential piece could be included in a larger, unannounced mixed-use development in the downtown area.
If a project does end up failing, he said that sets off the domino effect and makes lenders wary of further residential development, which is why he’s waiting to see how it shakes out before attempting another large downtown project consisting of apartments.
He said the city of Grand Rapids won’t be as cautious in apartment development and will let the private developer market decide.
What will make a difference in future downtown residential growth is downtown employment. Wheeler is looking for a few more key employment announcements in the downtown area. He said for each 100 jobs to come downtown, Grand Rapids can add 30 apartments since about a third will want to walk to work and have downtown amenities and feel.
“It will be driven by employment and people with an open mind toward cars and parking,” he said. “From our standpoint, we’re satisfied with the amount of units we own right now. That’s a nice portfolio, a good place to stop and take stock of where we are and wait it out, pay down our debt, take care of our properties and tenants.
“Good long-term investments.”