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1 Million Square Feet

Minnesota developers Michael Elzufon and David Lundberg have bought yet another downtown building and have designs to also turn it into condominiums.

The latest on their list of projects is the Sleep Products Warehouse at 201 S. St. Francis. They closed on the building last week and plan to convert it to 20 resident-owned condos.

That purchase, along with the pending purchase of the Oil Trade building, at 107 N. Market, would give the partners ownership of nearly 1 million square feet of downtown building space -- all acquired in the past three months.

Elzufon says they paid an amount close to the building's listed price of $495,000.

The 28,000-square-foot building has four floors. Lundberg says he chose the building because he likes the look of it - it stands out from its neighboring buildings because of its vibrant red brick exterior - and because it's in the middle of downtown, an area Lundberg and Elzufon plan to inundate with condos.

Elzufon says there will be a combination of regular one- and two-bedroom condos and two-level garden units. The garden units will have a recessed patio area in front of the main living quarters. An old freight elevator will connect the condos.

Because of its relatively small size, this building will be one of the first to begin construction, which Elzufon expects to start in the spring or summer.

Brokers for the project are Greg Buss with Landmark Commercial Realty and Sam Woodburn with J.P. Weigand & Sons.

The other buildings the developers have bought include the Commerce Bank building at 150 N. Main; Kaufman building at 206-210 S. Market; and Exchange Place at 110 N. Market.

Condos are planned for the Kaufman Building, while Commerce will remain an office building.

They'd like to build condos in Exchange Place, but because there are so many ground leases on the property, it could be years before the building is developed. Lundberg says they only bought the property because the price was so low and because if the ground leases get resolved, it would be a prime location.

"We bought it so cheap, it doesn't matter," Lundberg says, declining to give an exact amount. "It was almost free."

Elzufon and Lundberg are also trying to buy the Oil Trade building at 107 N. Market to build condos there as well, but problems with the title work have held up the final sale.

Mirroring trends
Ed Wolverton, president of the Wichita Downtown Development Corp., says despite the number of condos being planned in a short amount of time, he's not concerned about flooding the market. There are about 800 apartments downtown, but only one condo development that's ready for owners, the Grant Telegraph Center, developed by David Burk.

Wolverton says condos are a huge part of many cities -- including Charlotte, N.C., where he used to live. The opportunity for similar development in Wichita is there.

"When you look at the trend in other downtowns, there is a strong desire for people that want to live there and want to own, not rent," he says. "By adding that product, we're actually being able to mirror some of the national trends."

Elzufon says the research he and his partners have done to determine the demand for residential services downtown includes looking at the success of the Grant Telegraph condos and the apartments at Eaton Place and the Garvey Center. They've also looked at cities with similar MSAs -- Minneapolis, Omaha, Tulsa and Rochester, N.Y. - and seen how well condos have done there.

Together, the partners have residential developments in Minnesota, New York, South Dakota and Arizona.

"This is what we do for a living," Elzufon says. "We've developed certain matrixes that say these particular properties either meet or don't meet a market."

There are nine condos in the Grant Telegraph Center at 151 N. Rock Island, and all are occupied, says Burk, the project's developer. Four more are under construction.

Burk says he didn't do any market research when deciding to build the condos. Instead, he traveled the country and saw how well condos were received in other cities.

Burk says some of the craze for condos comes from developers themselves. But, he says, that helps create a market.

"I think there is a certain amount of demand from the developers coming in from outside the community," he says. "I think you also create a demand once you start doing them. It's really not an option for people until they see it."

- Rod Stewart
Wichita Realtor