Monday, June 29, 2009
Jeanne Bonner at Atlanta Unsheltered drew my attention to the 525 Moreland Ave development. This piece of property is an old Masonic lodge that Cartel properties had plans to convert a while back. I think they were planning on some loft office and maybe even some music space.
Jeanne is concerned that the 525 property could be indicative of an Inman Park Properties situation. This is property owned by Cartel Properties, which actually reminds me of IPP a little bit because they both have invested in many vacant, semi-historic properties in "transitioning" neighborhoods. You can find some older renderings of the 525 development, as well as the plans showing the above rendering, on their website by scrolling through the 'properties' section. (Boo for unlinkable java!)
Cartel owns a considerable amount of property in the city, including quite a few interesting buildings. Cartel is owned by George Rohrig, who is one of the money guys behind lots of Novare deals (he is the Rohrig of the Rohrig-Loudermilk venture). Unlike IPP, Cartel has a history of successful deals - one of their earlier developments was the 805 Peachtree building at Fifth Street, a former Social Security administrative building. I have a few friends who live in the building, and I think it is one of the best buildings in town. Great location, good quality renovation work, ground floor retail, covered parking - but it doesn't try and do too much.
Still, Cartel owns a decent amount of vacant property. Their townhome/live-work development down Moreland at Ormewood has gone through quite a few selling agents, but still hasn't sold well. They successfully redeveloped a commercial lot across the street, where Little Azio and the new location for Spoon are. I know they have vacant property in Kirkwood, as well.
Cartel owns quite a lot of very valuable retail space, however, much of which is doing quite well. This includes property in Buckhead, as well as the Taqueria del Sol in Decatur, and the Zocalo/Nickimoto's plot in Midtown. If they didn't have as much income-producing property, I'd be more worried about their less-than-successful development work. I wonder how their investments with Novare is going these days (although I bet they made a ton of money during the boom).
I think 525 Moreland is a good location, but I'm not sure about the current timing. I'm also not sure if East Atlanta can support the rent levels that kind of new development needs to be successful. I'd personally want to start off with a lower priced offering, like a conversion of the Gordon school into cheap loft apartments with surface parking. I also think being right on Moreland can be a tough sell for the residential units in the plan. Again, I like the location, I'm just not sure it is ready for what they are proposing yet.