Barbell effect reshapes downtown condo market

Last updated on May 13th, 2019 at 02:40 pm

During the first half of this year, Big Bend Development LLC rolled out an aggressive marketing campaign for the Terraces at River Bluff, a condominium development planned for a site south of East Ogden Avenue between North Broadway and North Milwaukee Street in downtown Milwaukee.

The marketing campaign included television commercials, an unusual sales technique for a Milwaukee condominium development.

However, since August, Big Bend has put the marketing campaign for the project on hold and is making some interior design changes to the development.

"We had a marketing study done, and it said we had to revise some things," said Big Bend Development partner Randy Scoville.

The marketing study revealed that the development had too many units priced in the $400,000 to $600,000 range and not enough in the $200,000 to $400,000 range, Scoville said.

In the original plans for the development, about 60 percent of the units were in the $400,000 to $600,000 price range. After the redesign, only about 30 to 40 percent of the units in the building will be in that price range, Scoville said.

Most of the units in the $400,000 to $600,000 range are between 1,600 and 1,800 square feet in size. The units in the $200,000 to $400,000 range are between 850 and 1,500 square feet, Scoville said.

The project consists of two 13-story buildings. In the original plan, one of the buildings was planned for 74 condos, and the other was planned for 76. Changes in the works for the project will not affect the size of the buildings, but it will change the number of units, Scoville said. Each building will end up with up to 90 units once the redesign is complete, he said.

"Some of the really big units will be split into two units," Scoville said.

The mid-priced range has been the hardest sell for the downtown condo market, which is taking on a barbell shape, with great demands for condos in the $1 million price range and for condos below $400,000, but shrinking demand in between.

Many of the downtown condo buyers are empty nesters who are selling pricey suburban homes and can afford to buy condos approaching $1 million in cost. The second-biggest segment of the downtown condo market are young professionals who can only afford condos priced below $400,000.

The $400,000 to $600,000 market is dominated by families who are buying suburban homes and don’t want to move downtown, Scoville said.

"The middle block is the toughest to sell (for downtown condos)," he said.

Big Bend hopes to have the redesign for the Terraces at River Bluff complete in time to resume its marketing push after Jan. 1, Scoville said. Construction could begin by the middle of 2007, and residents will move in about 18 months after the construction begins, he said.

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