The Smith family's encore to Charles Point Apartments is rolling along.
Early birds are moving in, and the first two phases of the $23 million, 206-unit Orchard Glen Estates multi-family housing complex off West Main Street are are scheduled for completion next May.
The project is a follow-up by Charles Smith and his sons Milo and Philip Smith to the highly successful, 30-acre, 600-unit Charles Point complex near U.S. Cellular Park. With a 1.38 percent rental vacancy rate reported by the Southern Oregon Rental Owners Association in October, there is plenty of demand for two-bedroom apartments at Orchard Glen, ranging from 1,100 to 1,300 square feet, and renting at $850 to $950 a month. A clubhouse and four 18-unit buildings are complete, and another one will be ready to occupy in two weeks.
"We've come a long ways in our efficiency, but it still takes a while," Milo Smith said. "We've been at it a year, and by the time the third phase is in, it will be another two-and-a-half years."
It takes more money to build apartment complexes than single-family residences, Smith conceded. But he and his family business partners are surprised more apartment complexes aren't in the works.
"Multi-family building is like garbage collecting," he said. "People tend to shy away from it."
The Smiths launched their business in 1997, building and selling complexes in Phoenix and Medford before taking on Charles Point in 2005. Early on, it seemed logical to sell the complexes, but more recently leases are preferred. After delegating that responsibility for a period, property management — handled by a 10-person staff — was taken in-house.
Medford System Development Charges thwart some would-be apartment developers, but Smith said he considers it just a cost of doing business. The Smiths have paid out of pocket for infrastructure work, reducing their borrowing needs, Milo Smith said. But they still require construction financing.
The recession slowed Charles Point construction, but the Smiths ultimately finished what they started and moved on to their latest effort, which is smaller by two-thirds. Smith said completion of Charles Point took and an extra 15 months to two years before finally culminating in 2015.
Milo Smith says the credit crunch stopped the enterprise in its tracks, for a while. But they persevered.
"During the downturn, if I was working by myself, I might have failed," he said. "But there were three of us, and we were able to get through. We're more conservative now. We don't leverage bank loans as much."
During the recovery period, many of the area's major contractors lamented having limited access to subcontractors, forcing them to delay their work or spend more money to go out of the area for workers.
"We've worked with the same crew and subs all along," Smith said. "I can't think of anytime we've change subs unless they went out of business."
Although Orchard Glen will keep the Smiths busy for another couple of years, they are already lining up another development in Central Point.
— Reach reporter Greg Stiles at 541-776-4463 or email@example.com. Follow him on Twitter at www.twitter.com/GregMTBusiness, on Facebook at www.facebook.com/greg.stiles.31.