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Restored! West Lofts, Divine Lorraine, etc

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Restored! West Lofts, Divine Lorraine, etc

 

Philadelphia is restoring and re-purposing some historical buildings

 

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A broken old piano sits in the ballroom of the Divine Lorraine Hotel in Philadelphia prior

 

Now being transformed; Can it help to transform Broad Street?

 

> Video tour: https://philly.curbed.com/2016/7/21/12237098/divine-lorraine-video-tour

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Reinstalling a Phila. Icon / Divine Lorraine, a storied Broad Street hotel

Top-to-bottom overhaul of Divine Lorraine moves forward

 

- Philly.com., Real Estate section, Oct 1, 2017

 

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The 11-story hotel has sat vacant since 1999; is expected to be completed by next summer

 

+ Divine Lorraine's lobby cost $1 million to restore, 7X the original budget for the lobby

+ The overall budget is $33 Million (/101 apartments = $327k per unit, ignoring commercial space)

+ Developer Eric Blumenfield, 54, is aiming to restore the hotel, as 101 apartments

+ Considered a risky project, "There was nothing bout this area that said 'Invest here' "

+ Blumenfield bought the hotel in 2012 for an estimated $2.1 million, assuming $800,000 in debt

+ He plans to rent 1BR apartments of 785 sqft for $1600 - 1700 per month; Up to $3,200 for 2BR

+ If 1 BR's cost $200k each, at $1700 monthly, they will earn 10.2%

+ Procida provided a loan of $35 million, at an interest rate of "around 13%", and has since sold down $23 million of its exposure to three different partners. And Blumenfield also received several million in loans, grants, and tax credits from the city. "I basically bet the ranch," he said about his deal with Procida.

 

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Rooms were outfitted with "trendy finishes": exposed brick walls, lofts, sleek appliances

 

Also planned are commercial spaces: three restaurants, a speakeasy, bakery, recording studio & lounge.

The recording studio will be taken by someone "from Philadelphia, but internationally famous"

 

Nearby is spotty development, vacant lots, and petty crime - average per capita income is just $14,366 pa.

But the area is "close to Francisville, Fairmount, and Callowhill... which are gaining in popularity"

 

OTHER Properties owned by Blumenfield:

+ Mural Lofts / Thaddeus Stevens school - 97 percent leased

+ Lofts 640 - 95 percent rented

Both charge an average of $1600 - 1700 per month

+ Metropolitan Opera House, purchased 2012, and just blocks north of Divine Lorraine

 

At Divine Lorraine, half the units were still available, 9 months after the building opened for lease,

but Blumenfield reckons that this is because "it is still a construction site... without even a front door",

until late September, and they have been leasing in earnest only 4-6 months.

 

Vacancies Up

"New apartments typically take six to 18 months to lease," says Barbara Byrne Denham of real estate data firm, REIS. Since 2013 devleopers have delivered 6,000 new rental units, and 4,100 more are expected. The vacancy rate for Center City - the area between Girard and Washington Avenue -- was 9.4% in the second quarter 2017, according to REIS. That is nearly double the 4.9% rate of two years ago, and Denham says that landlords are "feeling a lot of pressure with all the supply."

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