Luxury apartments, built in the midst of Salt Lake City’s homeless crisis, prove to be a smart gamble
Developers of new luxury apartments who bet big on a tarnished western edge of downtown Salt Lake City appear to be winning.
Alta Gateway Station Apartments
The transit-oriented Alta Gateway Station project at 505 W. 100 South went up one block away from what was then the epicenter of Utah’s homelessness crisis, spilling out of The Road Home shelter.
As construction crews for the Denver company Wood Partners first dug into the former warehouse land west of The Gateway Mall in summer 2015, the shopping center was bleeding retailers and looked like it was nearing bankruptcy...
...But Alta Gateway Station was that one crucial block further west, said Tim McEntee, director with Wood Partners — and several notches up in nerves for investors.
“We were definitely pushing the margin out here,” he said. “It was a challenge, but we thought the market was ready for our kind of product.”
Today, the swanky westside apartments are leasing up, with over 80 percent of 277 units filled. Studios start at $1,100 a month; three-bedrooms go for $2,700 and above. Sixty percent of residents already settled in are from out of state, manager Steve Steck said. About a third work at the thriving downtown Salt Lake offices for investment banker Goldman Sachs, which also helped finance Alta Gateway...
...Now, with the prospect of The Road Home moving out of the area in just over a year, Wood Partners is pursuing an equally upscale second phase of 288 apartments on land just to the west.
And it is seeking tax breaks from the city to pull it off.
McEntee said capital investors are calling, “wanting to do more deals” in Utah’s capital city.
The upscale residential project, coming amid an apartment-building boom in Utah, is evidence of several trends.
One, experts say, is the Salt Lake City market’s ability to absorb top-end downtown apartments at higher and higher dollar-per-square-foot rates — even as many Utah renters are being squeezed by rents climbing further out of reach for most blue-collar and middle-class wages.
As Alta Gateway Station welcomed visitors last week, the Salt Lake Chamber warned that all supplies of apartments, existing homes and new construction statewide were dangerously strained, let alone just affordable units. The business group said the looming crisis threatens to push regional home prices high enough to dampen Utah’s economic growth.
Looked at another way, healthy occupancy for the luxury apartments also highlights the effects of Operation Rio Grande.
That three-phase plan, begun in August 2017, saw stepped-up police action to restore public safety in the wider neighborhoods around The Road Home, with some homeless jailed and others sent for medical and addiction treatment, then helped with job training, employment and housing...
Steck, who works for Wood Residential Services, Wood Partners’ property management arm, said the police and social-services campaign reduced street crime and vagrancy in the Rio Grande neighborhood to roughly a tenth of what it was just a few years ago...
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