Maplegrove Property Management executives are banking on the area near Founders Brewing Co. to become a residential hotbed.
Following the purchase of Lady Godiva’s Showgirls, 234 Market Ave. SW, in early 2015, the East Lansing-based company began work on its first residential development in Grand Rapids in summer 2016. The steel frame of the 235-unit apartment building should begin this month, Maplegrove COO David Emdin said.
The development will take up the 2.03-acre site behind Founders and will include 30,000 square feet of retail in the five-story building, along with a parking garage.
Emdin said he believes Maplegrove is a bit ahead of the times for development in the neighborhood, but with the potential sale of the city’s 18-acre site at 201 Market Ave. SW and the Loeks Theatres and 616 Development project, he’s confident some of the city’s energy will shift south.
Maplegrove bided its time in Grand Rapids to make its first major project move forward. The firm started operating in Grand Rapids as a property manager for more than a decade and began collecting assets.
In 2013, the firm purchased 38 Commerce and the eight multifamily building Heritage Collection. Maplegrove also acquired Hopson Flats, 212-220 Grandville Ave. SW across from Founders, in 2015.
“We really believe that apartment living in downtown is a good thing right now,” Emdin told the Business Journal at the time of the $10.3-million Heritage deal. “There is a lot of demand, and we were seeking opportunities to potentially have a bigger presence. So, this worked out great.”
The acquisitions slowed, however, and Maplegrove’s strategy began to shift. With some experience in ground-up development, Emdin said looking at potential sites in Grand Rapids began to make more sense than buying more existing properties.
“Cap rates were getting to the point purchasing, especially in Grand Rapids, didn’t work for our model,” Emdin said. “It was too costly and building was a better option, as we could make numbers work better.
“We started changing as opportunities came our way, and we wanted to be more financially viable than trying to buy stabilized properties; everyone was trying to buy those.”
Maplegrove’s transition was helped by its CEO and vice president of construction, both of whom worked for a condominium developer prior to Maplegrove’s launch, Emdin said.
“It’s not our first rodeo,” he said, adding the company also is building a 269-unit project in Holt, approximately four miles outside of the Michigan State University campus in East Lansing.
The 234 Market project is set to finish June 2018, and rents will be determined as the project continues to shake out, Emdin said.
As the project begins to move skyward, Maplegrove recently invested in the Kingsley Building, 1415 Lake Drive SE, as a redevelopment plan in Eastown with Bazzani Building Co.
The nearly $11-million project is underway and will include office space and 41 apartments once finished in January 2018. A two-level parking deck also will be built. The project’s ground-floor retail phase was finished in 2012.
“Kingsley was a project they’d been trying to get off the ground as builder and developer, but it stalled out and they were looking for equity. Our group came in and provided (that),” Emdin said. “It’s a great project. It’s taking a functionally obsolete building with no windows — you easily drive by and hardly notice the building — and turning it into what could become a vibrant piece of the neighborhood.”