The PR folks for The Place on Ponce at 315 West Ponce de Leon Ave sent around this announcement this morning…

The Place on Ponce, downtown Decatur’s first new apartment complex in more than a decade, began welcoming new residents yesterday following completion of Phase II of the development.

Located on the corner of West Ponce de Leon Avenue and Ponce de Leon Place, the 234-unit, two-building, five-story development features contemporary one-, two- and three-bedroom apartments and 10,000 square feet of street-level retail space. Amenities include a 4,000-square-foot resident clubroom, 1,700-square-foot fitness center, resort-style pool, dog spa, bike repair station and two outdoor courtyards.

The first phase, completed in late 2014, consisted of 28 units and is currently at full capacity. The second phase, consisting of 206 units, is currently at 42 percent capacity but is expected to fill up quickly.

Having just leased out three, brand-new retail spaces at The Place on Ponce in Downtown Decatur, Redstone Properties President, Lyle Fogarty, may currently have one of the best vantage points to report on the state of the city’s retail real estate market.

In a recent press release, Mr. Fogarty noted that “The demand for retail space in Decatur was greater than we projected,” He continued, “It is clear that restaurant owners and retailers recognize the uniqueness of the area and its value.”

I was curious for find out a bit more detail as to what this demand looked like, so I followed up.  His response should be quite interesting to many of you who like to follow and offer predictions on Decatur commercial real estate trends.

We simply had demand from many more tenants than the 10,000 sf of space could accommodate.  By far, the most demand came from restaurants.  We could have filled up 30,000 sf with restaurants if we had the space (and parking).

There was some demand for soft goods and apparel, but many of those retailers like to congregate together and need more critical mass to help them be successful.  If a location could be identified in Downtown where a developer could build 50,000 or more square feet of modern retail space, there’s sufficient demand from shop tenants to make a vibrant retail district in Downtown in addition to the renowned restaurant scene.

So basically, even though the restaurant market may already seem pretty saturated in Decatur, it sounds like we shouldn’t expect it to ease up anytime soon.  Also, for those expecting a greater variety of clothing stores in the city, you may need to wait for a very large project to come in and provide the necessary space to allow a “critical mass”.

I guess we’ll have to wait and see if any of the current projects in development (Arlo, Alexan Decatur residential only!) or planned (Calloway, Avondale MARTA Station) will make a move in this direction.

A recent post on the AJC reported that the three ongoing apartment developments in downtown Decatur (315 West Ponce, Trinity Triangle and Paces Clairemont) would add a total of 600 units to the city.

While 600 new residences in such a short amount of time is certainly interesting – and worth discussion – what’s even more interesting is the bedroom breakdown.  (I realize that sort of sounds like a some kind of illicit activity)

Of the 600 apartments being constructed, 70% of them are 1 bedroom.  Of the remaining, 29% are 2 bedroom and just 1% are three bedroom.

We followed up with Assistant City Manager Lyn Menne regarding the reason why a city with such a self-destructive appeal for families is building so many 1 bedrooms. She replied…

It’s all about market and pricing but we were also encouraging developers away from larger units for fear of impact on schools.  However, the real driver was market.

The market driver explanation is interesting, since the limited case study of the Place on Ponce has shown that there is currently greater demand for 2 bedroom apartments than 1 bedrooms in the current market.  (Though as of yesterday, it sounds like all the 1 bedrooms have also leased)

But perhaps that’s a short-sighted view and the real goal of the developers is to cater to the underserved market of young singles and retirees who currently have few options inside the city limits.  Regardless, the overwhelming majority of 1 and 2 bedroom apartments is certainly good news for the city’s school system, which is struggling to keep up with rising enrollment.

315 Apartments along Montgomery Street, Decatur GA

We have long argued (respectfully, of course) about the demand of the Decatur rental market around here.  That’s because up until this year, it was hard to get a real gauge of it due to such a low supply.  But now 315 West Ponce, Trinity Triangle and Paces Clairemont are all going up at the same time and we’ll soon get to see what a Decatur rental market looks like in 2015.

315 West Ponce is the furthest along and thus will provide us with a first look at demand.   The first phase, (aka The Place on Ponce) which sits along West Ponce has been complete for a month or so, while Phase II is well underway on the backside of the property. [Photo above]

Conor McNally with CarterUSA tells us that 20 of the 28 units in Phase I have been rented.  The Place on Ponce’s Facebook page states that all 2 bedroom units in Phase I have leased and only one bedroom units remain.  They are also beginning to pre-lease Phase II, which includes 1, 2 and 3 bedroom units.  Published rental rates last year for the 1-2 bedrooms in Phase I were between $1,400 – $2,500.

As for the Phase I retail space along Ponce, Conor tells us that one lease has already has been signed and one to two more are “almost ready to execute”.  Stay tuned for that.

How this demand ebbs and flows as these larger projects are completed and become available for rent is yet to be seen, but it should provide some greater context to our long-standing, ongoing conversation on the subject.

As “The Place on Ponce” rises along West Ponce, you may be curious about the interior.  Well do we have the renderings for you!

A press release put out by Carter today also announces that leasing will begin next week and that rates for 1, 2 and 3 bedroom units will be posted on their website then.  It also notes that phase 1 along West Ponce should be completed by November and that the much larger 234 unit phase 2 will be completed by next summer.

Conor with 315 West Ponce developer Carter sent along the latest renderings of the mixed-use development currently under-construction at the corner of Ponce and Ponce Place.  He also announced that the project – long called “315 West Ponce” or “315” for short – now has an official name, “The Place on Ponce”.  You can check out their new website HERE.

He also provided this update on the project…

…we are about to complete the parking deck and get it open (in the next week). At that time, the office building tenants will start to park in the deck and we will begin full construction on the apartments in the surface parking lot facing Montgomery. We are well underway on the building facing Ponce and that is scheduled for completion this fall (November). We will begin our leasing efforts this summer. The full project will be complete next summer (2015).

Also, here’s an interior rendering…