Members of the Charlotte chapter of Commercial Real Estate Women got a tour of the SkyHouse apartment tower in Uptown on Tuesday, and got to peer across the street to the companion building that is scheduled to open this winter, SkyHouse 2.
Developer Clay Grubb of Grubb Properties told the CREW attendees that the “mirror image” SkyHouse 2 building next door to the 640 N. Church St. apartment tower would be significantly different in one way, though.
It’ll cost about 50 percent more, thanks to rising construction expenses, specifically for labor.
“Materials cost itself has not moved that much, but the reality is there is no labor,” Grubb said. “Our construction labor went back to south of the border during the recession and now they can’t get back to the U.S. Those costs –– drywall laborers, lightly skilled laborers –– are about 50 percent higher than before.”
The first SkyHouse tower is doing well so far, Grubb said. The project is about 76 percent pre-leased and 68 percent occupied. Rents for the facility are coming in at around $2.25 per square foot. The monthly rates range from studio apartments around $1,300 per month to three-bedroom units for about $3,100 per month, Grubb said. The building has 336 units.
Tyler Bailey, a leasing consultant with the SkyHouse, gave one of the tours and said a big draw for tenants was the tower’s 24-hour concierge service, including a touchscreen computer in the lobby and an app that allows residents to check for packages and alert the front desk that company is expected.
“Also, we have a rotating art gallery from the McColl Center collection,” Bailey said. “Each six months we have new artists featured.”
The project did run into a few bumps along the road.
“This project was truthfully a little difficult to finance, with people asking us, ‘Why are you building way down Tryon Street?’” said Mark Bramburt, a developer with SkyHouse’s parent company, the Novare Group. “Parking was a challenge as well. We had a deal with nearby businesses at the 525 North Tryon building for parking our residents in their garage. And we got the parking garage built with two levels underground delivered by October of last year, so it worked out.”
Grubb said he had a hole card to play during the shared garage negotiations.
“During the parking worries we did acquire the building at 525 North Tryon, so it made the parking negotiations easy,” Grubb said. “And that building had struggled due to parking issues during the day, too. Now that the SkyHouse garage is done we can cross-park the office building here. That’s the beauty of doing residential along with an office building nearby. Now we are hoping to open a grocery store on the front of the SkyHouse, too.”
The SkyHouse retail area does have one tenant, but it’s not the kind of business traditionally associated with an apartment building.
“This isn’t exactly that coffee shop you always think you’ll need to put you on the map for new tenants, but it’s working out well,” Bramburt said.
VetweRx animal hospital is a full-service veterinary clinic in the building, marking a first for Uptown, Grubb said.
“Our first retail client is crushing it,” Grubb said. “There are so many dogs living downtown you can’t imagine.”
Grubb said he expected the second SkyHouse tower to do well, also, but not everyone he talks to is on board.
“One question I often get is, ‘Where are all the people going to come from to live in these apartments?’ There are more 23-year-olds in the U.S. today than ever in our country’s history. And they typically will rent for five years, but instead of starting at 22 — when they’re still in their parents basements — they start at 27 and rent until they’re 32,” Grubb said. “The apartments today are very concentrated and these young people want to live in the urban environment.” The 20-somethings still “want to party, but the big difference is they will not drink and drive so they want to be within walking distance.”