Salem condo-office project breaks ground
February 23rd, 2007 - Category: Condo, Real EstateThe Meridian — a much-anticipated but delayed condominium and office project — has finally broken ground.
Business and community leaders have kept a close eye on the still vacant site at 777 Commercial St. SE in downtown Salem. The $54 million project might test the Salem area’s receptiveness to large, upscale condo projects, a concept that is new to the Cherry City.
Plans for the six-story Meridian call for 89 condos at prices averaging $375,000 and running to as much as $1.3 million for a few penthouses. Condo buyers can order customized floor plans and finishes in some units.
“Our focus was to deliver something that was more custom and upscale to the Salem market,” said Dan Berrey, principal broker and owner of Commercial Concepts Inc., The Meridian’s developer.
At the former site of the Oregon Capitol Inn, which was demolished to make way for The Meridian, business people and city officials attended a ceremony Wednesday to mark the start of construction.
“It will change the landscape in more ways than one,” Salem Mayor Janet Taylor said. The project will show that Salem is ready for mixed-used development on the scale of The Meridian, she said.
Salem has pushed for a mixed-use development at the nearby Boise Cascade site, where one proposal calls for condominiums, restaurants, shops and more on a 13-acre site Boise is leaving.
Lack of construction activity at The Meridian site in 2005 and 2006 had raised questions about the project’s status. But its developer told the crowd gathered for the groundbreaking ceremony that construction will begin within 10 days.
“We were not going to basically dig a hole and walk away,” Berrey said.
Condo dwellers could be moving in by fall 2008, he said.
The Meridian has become a larger project than Berrey envisioned when his company kicked-off a marketing campaign more than three years ago:
# The value of the project will be about $54 million when it’s completed — more than double the first estimate. Berrey declined to disclose the construction cost but noted that sharply rising construction costs have made the project more expensive. Financing is being provided by First Regional Bank, a California-based firm.
# Plans for the building call for a 190,000-square-foot structure, including 30,000 square feet of office space. That’s 60,000 square feet larger than the initial proposal.
Ron Kelemen and his wife, Kathy, have put a deposit down on one of the condos. The couple, recent empty-nesters, are looking forward to moving into a condo that’s half the size of their home in Salem.
The Kelemens said they won’t miss the yard work that comes with home ownership. They will be able to walk to work from their new condo that will overlook the Willamette River.
Berrey admits some real estate observers are skeptical of putting upscale condos in downtown Salem. In his view, The Meridian’s product doesn’t compete with single-family homes.
“The thing that most people fail to recognize is the local market is looking at this as a lifestyle change,” Berrey said.
The Meridian is aimed at those wanting to live in a luxury condo in a smaller city. Baby boomers on the verge of retirement are a prime market. So far, about 40 percent of the Meridian’s condos have been reserved, Berrey said.
Condos at The Meridian sell for an average of $475 per square foot, which is still below the Portland market’s average of $600 to $1,000 per square foot, he said.
Most of the condos at The Meridian are from 850 square feet to 2,300 square feet.
About half of prospective Meridian residents who have put down deposits to reserve a condo are from outside the Salem area, where condos are more common. Some are former Salem residents who are returning to the area.
“The biggest question we hear is not about price, it’s when can we deliver the unit,” Berrey said.
Source: www.statesmanjournal.com
