Stuck in Transition
The bankrupt 55 West development plans to open as an apartment building, biding its time for the condo market to come back.
|55 West on Church Street plans to open as |
an apartment building on September 1
After more than a year of sitting dormant, with nary a light on in its 32 floors overlooking the city, 55 West on the Esplanade plans another new beginning—this time as an apartment community.
If you’re familiar with the history of 55 West, then the latest twist in its evolution should come as no surprise. The development has been in transition almost since its groundbreaking, when luxury units went up for sale at $300 per square foot. Later that price was deemed too low to support construction costs, so sales were canceled and units were re-priced at $400 per square foot. Then came the downtown condo-market crash, and 55 West joined neighboring Church Street Station in bankruptcy.
Only a few years ago, when condo development was humming along in downtown, city officials and developers saw 55 West as the catalyst to revive the Church Street entertainment district. Restaurants, bars and boutiques would fill the lower-level spaces that look out on an open plaza fronting Church Street. The floors above would be teeming with residents whose disposable income would flow into the nearby businesses.
Earlier this year, the property’s owner, Dutch lender SNS Finance, had considered converting 55 West into a hotel or offering a mixture of apartment and condo space.
But SNS ultimately decided to try and minimize its losses by opening the bottom two floors as retail space and renting up to 377 of the 405 units.
ZOM Residential Services, the leasing company handling 55 West apartments, expects to begin showing model units this month with a target move-in date of September 1 for the first tenants. Prices of the units, which range from 1,030-square-foot lofts to 3,030-square-foot, three-bedroom apartments, are expected to start in the low $1,000s. Apartments will feature hardwood flooring and carpeting, stainless steel appliances, recessed shelves, granite counters and ceiling-to-floor windows looking out on the city skyline. Atop the parking garage, which rises up to the 14th floor, sits a resort-style pool area with palm trees. The top-floor penthouses are not available for rent, a 55 West representative says.
“The idea was to get that activity going in the building and have life down there and have a five-year approach, and then we’ll convert them to for-sale condominiums when the market strengthens,” says Bob Hensley of Grosse Pointe Development Co., the property’s developer.
55 West owes the city of Orlando $7.5 million in “special assessments,” or loans, to be repaid with interest. The city lent the development the money to build its parking garage and plaza area, both considered public benefits, says city spokeswoman Heather Allebaugh.
A finished-out 55 West could pose serious competition to neighboring condo towers that are begging for tenants—either as owners or renters. The downtown condo market has a 19-month supply of units for sale, according to the Orlando Regional Realtors Association.
So is downtown Orlando becoming a renters’ market?
Not necessarily, says Randy Anderson, a professor at the University of Central Florida’s Dr. P. Phillips School of Real Estate.
“There’s still a lot of options to buy downtown,” Anderson says. “But there’s really not a good strong demand to sell these units off.”