Monday, December 11, 2006

Overbuilt Multi-Family in NW Franklin County Does Not Reflect Demand for MF Investment Properties

I read with interest today that Colin Trueman (whose father built the Red Roof Inn budget hotel chain), and Drew Berlin, long-time builder for the Trueman family (and a neighbor of mine when we were both kids in the north end of Columbus), have teamed and are developing land along the I-270 corridor in NW Franklin County, Ohio. One statement gave me pause, however, about their plans. Stating that the apartment market was sluggish, they were going to change their plans from constructing multi-family to medical office/retail near the booming Mill Run development area. True, the area is incredibly overbuilt when it comes to apartments. You can't tee a golf ball without hitting a brand-spanking new apartment complex. Renters have too many choices and occupancy in these newer units is off from projections.

But multi-family in slightly older, more established areas is booming, and demand to invest in such properties remains VERY strong. I wrote last week about all the millions of dollars pouring into the Midwest -- and Ohio -- from California investors seeking to buy multi-family projects. There simply isn't enough product on the market. But out-of-state investors are somewhat hesitant to acquire brand new projects until they have some sort of track record.

The Trueman family owned hundreds of acres along I-270 20+ years ago, and have either sold off or developed most of the property. It was a great business the Trueman family started, Red Roof Inns. It helped pay for college in the early 1980s for me -- I was a night auditor at the Worthington, Ohio property. Its nice to see the family, and an old acquaintance from my old neighborhood, teaming up to make sure the last pieces of the Trueman holdings are very nicely developed.

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