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Streamline Tower switches from condominiums to apartments
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GARY THOMPSON/LAS VEGAS REVIEW-JOURNAL
A painter works on a Streamline Tower balcony Wednesday. The building is getting a makeover and has converted from condos to apartments. » Buy this photo
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LAS VEGAS REVIEW-JOURNAL
Having flopped once in its role as a catalyst for downtown redevelopment, the Streamline Tower is preparing to take its second shot in a different guise.
A fresh set of owners has begun applying some cosmetic touches to the 21-story building, notably new exterior paint, and has converted it from condominiums to apartments. Soon, the name will change to Ogden after the street that it faces.
"We don't think the demand is strong enough on the sale side," said Wade Hundley, the CEO of ST Residential, the Chicago-based company that took control of Streamline and several other Las Vegas condo projects a year ago.
"But," he said, "we think the market in high-rise rentals is going to be good here."
In particular, he points to the emergence of nearby new businesses along East Fremont Street, steps away from Streamline's front door, some new downtown employers and lower prices to help fill a building that has mostly gathered cobwebs since it opened in spring 2008.
"I think what Streamline is doing with the building is the right strategy," said Bruce Hiatt, a broker with Realty One.
Because selling high-rise condos continues to be difficult, he said that renting makes sense to generate cash flow while waiting for the market to rebound. Hundley said rentals at Streamline will start at $1,000 a month and will continue for a couple of years. Then, he said, the company will evaluate whether to return to condo sales.
Some real estate professionals wonder how much apartment rentals will improve Streamline's occupancy. After being touted by city officials and downtown business owners as a key to achieving the goal of a 24-hour, live-in downtown, only 27 of the 275 units at the project between North Las Vegas Boulevard and the El Cortez were sold as condos, the last coming in August 2008. Last year, the partnership that owned it filed for Chapter 11 bankruptcy protection and ultimately ceded possession.
"I think there's demand for high-rise rentals, but the market might be flooded," said Debbie Drummond, a real estate broker affiliated with Re/Max.
Bargain-seeking investors are buying many of the condos closer to the Strip for cash and then subletting them. ST Residential also owns two projects on the south end of Las Vegas Boulevard, Loft 5 and One Las Vegas, that are going rental.
"I believe it will be tough for them," said Marc Ehrlich, president of Hi Rise Living, which represents renters.
Until recently, Ehrlich oversaw marketing and sales at the Panorama towers on the west side of Interstate 15.
"I don't know how deep the market is to absorb the supply that is now out there, both direct and hidden rentals," he said.
Hidden rentals are properties that are being subletted by their investor owners.
The handful of owners has rented out Streamline sporadically, but not with big results. County records show that the homeowners association has filed liens against several of the owners, mainly investors who have decided not to put more money into an upside-down asset.
ST Residential is a partnership between the Federal Deposit Insurance Corp. and private investors that took over just more than 100 troubled loans scattered all over the country that were held by Corus Bank when it failed a year ago. Included in the portfolio was ownership of the Newport Lofts and the mortgage on Juhl, both downtown condo projects.
Hundley, who spent seven years as executive vice president and later president of regional casino operator Pinnacle Entertainment before resigning in 2008, was picked to lead the company.
Juhl has sold slowly and Hundley expects to take possession of the project from San Diego-based CityMark Development next spring.
The Streamline makeover includes painting it white with silver-and-gray accents, as opposed to the predominant color that some call beige and others a shade of pink, ST regional director John Tippins said. External lighting and signs will be added to try to draw more attention in the skyline.
ST Residential will also expand and refurbish the front lobby and relandscape the rooftop pool and deck. Hundley estimated the budget would run about $2 million.
Rents will run from $1,000 a month for an 847-square-foot unit to $2,400 a month for a 2,044-square-foot corner unit. As a condo, the prices paid ranged from $413,000 to $930,000, although the majority were less than $600,000.
Real estate professionals debated whether that was low or in line with other rented condos. But the building's cost basis has plummeted; it cost $125 million to build, but a Corus affiliate valued it at $34 million when it took over in June 2009, county records show.
Tippins said 30 of the 248 units to rent should be occupied by year's end based on current activity. More tenants will come next year, he added.
"Heads in the beds," he believes, will help lease the 12,000 square feet of street level retail space that has remained vacant.
Contact reporter Tim O'Reiley at toreiley@reviewjournal.com or 702-387-5290.
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Well now..if the deal with Zappos headquarters goes through, perhaps Streamline Towers may be far more favorable. Perhaps!
Having lived in a downtown high-rise I can identify several reasons this concept just doesn't fly. One.) There is no place to get the basic essentials anywhere downtown. One has to drive to Bruce and Charleston or Oakey and Rancho for anything more than a gallon of Milk. Two.) Most downtowns encourage a pedestrian culture where residents can walk te to many bars, clubs, coffee houses etc. Anyone walking downtown knows that that activity alone is enough to have Metro stop you and pepper you with questions beyond their authority. 3) The idea that downtown is a cultural center when rents of $2400 are far beyond most budding artists, works against the very reason most people are attracted to an urban center.
Maybe they should rename it Fawlty tower(s).
SOLUTION? Just name this place Harry Reid Tower! Fill it with Homeless and illegal immigrants add in a few downtown service sector employees(cleaning staff) and bingo you have a fully subsidized Obama,Reid success story! Can't happen? Just wait!
@VegasLee, so what does the transfer of this property to 'apartments' do for the 10% that bought units? There is no such thing as a mixed condo/apartment building. There are actual 'owners' of the building, so what happens to the 'owners' stake of 10% of these units? Are they now stakeholders in the ROI? I doubt it.
The market in Downtown LV has yet to be created. You can't artificially create "luxury living" standards where there are none. If the investors are trying to take a longer view on this, drop the rents to 800/mo for the smaller ones, and cater to a younger clientele. Thousands of 20somethings hang out in the downtown area every weekend. I know that there are thousands more that would like to live there if they could afford it.
VegasDude2010, read the article, they sold 27 units, 10%. Market went bad now new owners are trying to make something of it. Good idea over all. There are people that will pay for a new high rise apartment. Joanne.Ready, been hearing from people like you for over 40 years yet Vegas is still here and getting better all the time. Have you moved out of Vegas yet?
Who in their right mind would pay that much to live in the Ghetto?
Did they get rid of that smell that pervades Fremont Street? I remember walking from the Golden Nugget to the El Cortez, and I thought I was in Newark, NJ. And this was in the daytime. No way I would walk there at night. Streamline will become a BK project helping the homeless. Oh well, life goes on.
I bought a short-sale, second condo in my NW development. I cleaned it up and have it rented. After expenses, I have a 10% ROI (that's Return on Investment for you Harry Reid supporters). Get the government out of the way, let the market clean the deadwood and Vegas will get back on it's feet much faster than Harry Reid could imagine. Though Harry "but for me" Reid will still take the credit.