Kalamazoo market study shows demand for downtown residential development

Conditions are right for residential developments on four city-owned pieces of property in downtown Kalamazoo despite the current economic conditions and housing market slump.

Tracy Cross of Tracy Cross & Associates, Inc. studied the properties at the request of the city’s economic development department and found strong potential for the sites, three of which were Public Safety properties.

The sites included in the study are: 214 W. Lovell, 418-414 S. Rose Street that together make up about about 1.6 acres; .76 acres at 116 W. Cedar St.; and properties in the section of downtown now known as River’s Edge.

Cross suggests three-story apartments over structured parking could do well on the Rose and Lovell street site. He recommends 84 units with an average size of 978 feet renting for $1.09 per square foot. Two-story row homes with 24 units also would be another consideration.

For the Cedar Street property Cross recommends more work be done to make the property ready for development.

The River’s Edge property could support five separate products — three rentals and two for sale. He suggests row homes or three story apartments over structured parking could work there, as well.

Visibility, accessibility and their proximity to many shopping, dining, recreation, entertainment and other amenities are all big pluses for the public safety sites, Cross says. The “extremely strained” conditions for rental property also led to Cross’ conclusion that new rental housing downtown would be successful. Specifically there are nine rental apartment developments and 180 units altogether and vacancies are extremely tight.

Cross issues a caution, however, noting that the relatively small size of the Kalamazoo market will keep demand modest, no more than 633 units annually. He expects the market to under-perform into 2015. For details on the study, visit the City of Kalamazoo’s website.

Writer: Kathy Jennings, Second Wave
Source: Jerome Kisscorni, Economic Development Corporation