Orion shifts construction to suburbs
‘Historically low’ interest rates incentivize construction company to deliver 248 townhomes across three developments.
Orion Real Estate Solutions is bringing its focus back to the suburbs, with plans to deliver 248 new townhomes across three new developments.
The firm’s most recent development, the Hanover in Caledonia, follows the announcement from real estate and retail giant Amazon that it is building a $150-million, 855,000-square-foot warehousing and distribution center nearby at 4500 68th St. SE, at which the company expects to create up to 1,000 full-time jobs.
ORES President John Wheeler said the timing was almost perfect. Although the development team had been working with the township for over a year on site plan approval, the addition of a major employer to the area was a welcome surprise.
“We had no clue about Amazon,” Wheeler said. “We were in Caledonia well over a year, but when that announcement came, that sure didn’t hurt a thing. Sometimes, it pays to be lucky.”
The Hanover will be located at 245 Kinsey St. SE and will be a two-phase development, with construction on the first phase scheduled for this summer. The first phase will deliver 88 units, and phase two will include 70 more units and a public clubhouse.
Mike Maier, owner of Cusp Group and longtime partner with ORES, said they have closed on a loan, and the site plan received approval from the Village of Caledonia.
Although the potential job growth of the area from Amazon came as a surprise to the developers, Maier said they were initially drawn to the area by the demographics and the success of its schools.
“Caledonia came up high on growth, income and they have a good school system there, too,” he said.
Maier added he’s seen a wide range of approval in the townhome concept, from families with school-age kids to young professionals and empty nesters.
Phase two is a long way off, and ORES and Cusp Group have not nailed down a construction date, but Maier said they will break ground on it once phase one is complete. Both phases are expected to total around $43 million.
“We’re just excited about getting it going, and we love the growth in that area,” Maier said. “With M-6 — that’s been a great access area. The whole Amazon thing is an added bonus.”
Orion is building up more speed in the suburban residential market, but Wheeler said this is not new territory for the company. In the past 20 years, Wheeler has led 20 residential projects, totaling over 1,000 units, scattered around West Michigan, including Grand Rapids, Forest Hills, Rockford and Ada.
Citing “historically low” interest rates and sufficient downtown holdings for the company, Wheeler said it’s time to invest more in suburban living. He also said suburban rent is cheaper on average, and vacant land supply is higher.
“We had to shift that focus a little bit,” he said. “As far as downtown holdings go, we’ve got enough at this point, so we’re taking a pause on any new residential developments downtown. We’re focusing on the suburbs until all the new projects get stabilized.”
Other projects on ORES and Cusp Group’s summer schedule include the Knoll Townhomes of Ada, a $22-million, 16-building, 72-unit project at 1040 Spaulding Ave. SE, Ada. Orion spokesperson Jason Wheeler said the project has gotten a lot of positive feedback since breaking ground in April.
“We’ve had more than 100 emails inquiring about this project for rental/purchase since the beginning, so it is a very popular project so far,” he said.
ORES and Cusp Group also are in the design phase for Michigan Meadows at 2233 Michigan St. NE, Grand Rapids. The team plans to demolish the old Wealthy Park Baptist Church and build 22 four-plex style buildings, totaling 88 units, on the 19-acre site. Construction is expected to cost $23 million and begin this summer.
“We’re proud to say we’ve done 1,000 units in the suburbs,” John Wheeler said. “When these next projects get done we’ll have 1,300 or 1,400 completed.”