Two major Downtown projects that suffered setbacks after the real estate market seized up when the recession battered the economy are poised for a comeback.
The Horizon, a condominium project that was well underway in the southern end of Downtown overlooking the Mississippi River, seems to be a possibility again after clearing a legal quagmire.
(Daily News File/Lance Murphey)
Real estate experts and Downtown officials say the prospects for the Horizon on the southern end of Downtown and One Beale at Beale Street and Riverside Drive appear promising.
After clearing up a legal quagmire that resulted from foreclosure, a consortium of banks led by Capital One that own the 16-story Horizon condominium building have put the unfinished property up for sale.
After completing most of the first phase of the project, the original developer, the Bryan Co., defaulted on a $58.6 million loan in 2009. Since then, the 155-unit tower has sat lifeless, a painful reminder of the economic downturn and real estate crash.
But now it’s drawing interest from credible local and national investors and could sell relatively quickly because investors or developers would be getting a nearly finished product at a deep discount and because banks do not like to hold onto assets like the Horizon for an extended period, said Downtown Memphis Commission President Paul Morris.
“There are multiple potential buyers I’ve spoken with who are interested in buying it from Capital One,” said Morris. “They intend to dispose of that asset quickly because they’re a bank and not a real estate company. The buyer will be able to pick up an asset for a much-discounted price. The buyer will have to finish it out, but it’s been well maintained by banks.”
Morris said that while he would not completely rule out using incentives to move the project along, he currently does not envision a scenario where incentives would be available for the Horizon.
“I can’t foresee any reason or basis we would offer incentives because the bank is going to have to offer incentives for this one,” said Morris. “They’ll have to make the price so attractive to make the financials work without our incentives. That’s what we’re counting on, and that’s what any prospective buyer should be counting on.”
Jimmy Ringel, COO of Memphis-based Makowsky Ringel Greenberg LLC, said that while the Horizon was originally developed as a condominium tower and included larger floor plans and top-notch amenities, it could work as an apartment development.
“I would tend to think it would be successful,” Ringel said. “The Downtown market, when you look at performance like occupancy, price per square foot, Downtown leads the market in all those categories. There’s a lot of competition Downtown for rental, but how many properties are high-rises with stunning views of the river?”
Meanwhile, the Carlisle Corp., which operates Wendy’s restaurants across the Southeast, is making advances on its ambitious One Beale development at the foot of Beale and Riverside, arguably the most precious piece of real estate in the city. The company recently acknowledged it plans on selling 56 Wendy’s restaurants for $58.2 million so it can focus on projects in Downtown Memphis, where the firm is also the majority owner of the Chisca Hotel redevelopment project.
“They are committed to doing something spectacular with that property,” said Morris. “It is such as valuable piece of property, and the Carlisles know that and they don’t want to put just anything there, they want to put something spectacular there.”
The company is moving forward with plans to develop a towering, mixed-use project featuring offices and apartments. Carlisle Corp. originally planned to develop two towers on the site, including one that would have included a Hyatt Regency Hotel, but the recession forced the company to scale it back to one tower before putting the project on hold.
Morris said that while the project may have been shelved for several years after the onset of the recession, it was never far from the Carlisles’ thoughts.
“The Carlisles have remained very engaged with the property since the plans went dormant,” said Morris. “I foresee they will be able to do something in the not-too-distant future.”