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New owner to rehab two century-old apartment buildings

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A local real estate veteran who had planned to retire has instead jumped back into the game with the purchase of two vacant downtown properties he plans to convert to market-rate apartments.

John Watson, who was a partner with Carl Van Rooy in Van Rooy Properties Group from 1986 to 2006, formed Core Redevelopment Inc. at the end of August and on Sept. 1 purchased two buildings at Senate and North streets that will house 71 one-bedroom apartments and six studio apartments.

The buildings on the southeast and southwest corners of Senate and North and about a block east of the Central Canal were built in 1900 and 1903 as the Avondale and Deauville apartments. They were rehabbed in 1976 as low-income housing and have been vacant since November.

A developer plans to rennovate the Avondale and Deauville apartments. (IBJ Photo/Robin Jerstad)

They had been owned since 2004 by a local partnership. Tenants in the buildings had been eligible for housing assistance payments through a program of the federal government. When the property fell out of compliance with that program a few years ago, occupancy took a nosedive and the entity that owned the building fell behind on its mortgage with Wells Fargo Bank.

Watson bought the buildings for a little more than $1 million—about half the mortgage balance—and plans to spend another $1 million rehabbing the units.

Watson said moderating prices caused him to jump back into real estate.

“I was going to retire and go off in the sunset,” he said. “When I was stepping away, people were paying crazy prices. But then the market changed.”

The Senate Avenue apartments, which average about 650 square feet each, will rent for $600 to $650 a month, Watson said. The first units should be ready for tenants by Dec. 1.

Amy Burmeister, a multifamily housing specialist with the local office of CB Richard Ellis who represented Watson in the transaction, said rent growth is driving interest in downtown apartment ownership.

Downtown rents have grown 6.7 percent in the last two years compared with 1 percent to 2 percent in other parts of the city.

 

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  1. The east side does have potential...and I have always thought Washington Scare should become an outlet mall. Anyone remember how popular Eastgate was? Well, Indy has no outlet malls, we have to go to Edinburgh for the deep discounts and I don't understand why. Jim is right. We need a few good eastsiders interested in actually making some noise and trying to change the commerce, culture and stereotypes of the East side. Irvington is very progressive and making great strides, why can't the far east side ride on their coat tails to make some changes?

  2. Boston.com has an article from 2010 where they talk about how Interactions moved to Massachusetts in the year prior. http://www.boston.com/business/technology/innoeco/2010/07/interactions_banks_63_million.html The article includes a link back to that Inside Indiana Business press release I linked to earlier, snarkily noting, "Guess this 2006 plan to create 200-plus new jobs in Indiana didn't exactly work out."

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  4. Please go back re-read your economics text book and the fine print on the February 2014 CBO report. A minimum wage increase has never resulted in a net job loss...

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