September 21, 2018 – Craig Markhardt, NMLS 7026
Downtown Sioux Falls, South Dakota has been growing in popularity and population even before I first moved to a warehouse loft there almost ten years ago. Back then, opportunities to own single family residences did not exist. Last year, into mid 2017, with over 2,000 individuals calling the core of Downtown Sioux Falls (DTSF) home, there were still less than a handful of individuals who owned their residence rather than leasing.
That all changed with the development of 32 condominiums in a mixed use development known as Jones421, located on Phillips Avenue. Envisioned and created by a dedicated team including Jeff Hazard & Stacey McMahan from the award winning #KochHazardArchitects, the four story, 89,000 square foot plan for a total gut-rehab of a steel reinforced concrete grain elevator originally built by O. S. Jones Seed Company in 1909, was added on to, bringing valuable underground parking for owners, retail business, and owner-occupied living together at the end of 2017.
Earlier this month, Koch Hazard Architects received the SD AIA 2018 Merit Award in the category of Architecture for its design of the Jones421 Condos.
Located in the heart of downtown in the Sioux Falls historic warehouse district, #Jones421 is within a 5 minute walk of shopping and dining, the gently flowing Sioux River, the East bank entertainment district, museums, theaters, as well as the beautiful Falls Park. All throughout DTSF, residents and travelers are able to enjoy the Sculpture Walk which features an annual display of over 50 outdoor sculptures that are changed each spring by volunteers and are on lease from artists from around the world.
In the spring of 2019, the $4.6 million outdoor concert pavilion known as #Levittatthefalls will open across the street and annually feature 50 free, professional concerts. The joint venture between the Levitt Foundation and the City of Sioux Falls will inspire and reinvigorate a large public green space and add exceptional value for residents and visitors by continuing to strengthen the quality of downtown life.
Jones421 brought the idea of condo ownership in a downtown setting like never seen before in South Dakota. Before breaking ground in 2015, I began working with the development group to coordinate (with much help) the availability of loans and certify the development allowing Frontier Bank, the preferred lender on the project, to finance buyers who qualify under conventional loan guidelines. Buyers have been able to contribute as little as 5 percent down payment with long term, competitive, fixed interest rate mortgages. This has allowed the Jones421 condo project to exceed expectations and close sales on 27 of the 32 units as of July 2018.
Another key ingredient to its success is the wide range of socioeconomic demographics the residential piece of the project covers. Condo units became available for every price point, ranging from about $180,000 to over $1 million. This setup has allowed both younger and older buyers to gain entry into home ownership in an urban setting. The make up of resident owners in the Jones421 condominiums includes 25% who are under the age of 40 with another large percentage of members of the Baby Boomer generation.
Hjoyung Lee, a Postdoctoral Fellow at the Joint Center for Housing Studies at Harvard University, #JCHS, believes that Gen Y (Millennials) are not likely to leave city living for suburbs anytime soon. Generation Y buyers have exclusively been renters in DTSF up until now, and for the first time ever, they are now able to become home owners with help of available financing.
Since the early 2000’s, I have been carefully monitoring development opportunities in Downtown Sioux Falls. For the first time in the City’s history, there are more core areas ready for development to cater to home ownership, versus the traditional leased apartment living. Urban home ownership in Sioux Falls is something I believe will continue as long as developers bring additional projects with units available for sale.
This is no easy task with complex lending guidelines and federal laws, which is why developers hire me as a consultant to help with projects, while buyers use me to finance their purchases.
I am excited to see what’s in store for DTSF in the next 10 years, especially since my wife and I are also proud owners of our new Jones421 condo. The success and momentum from the project has given many of us owners an expectation we will see new ideas from visionary developers and investors who have great energy.
It has been an honor to work with the developers on Jones421 Condos, and my ongoing goal is to help increase the number of downtown home owners; specifically Generation Y, from less than a dozen to the hundreds in Sioux Falls. I believe this is possible with well thought out planning by developers, and when executed, every new owner will benefit from increasing property values at a pace beyond what is found in the typical residential neighborhood.