Santa Fe, N.M., has long attracted those seeking breathtaking mountain vistas and a vibrant art scene. The area presents a special allure for apartment investors looking for markets with high barriers to entry.
“It’s very difficult to develop in Santa Fe because the residents are very involved in the process, and getting water rights is expensive,” said Tony Allegretti, general manager for Wiv Co., LLC, a locally based real estate developer. “Plus, 30 percent of all new developments must have an affordable housing component. You have to be very creative to find a way to pay for your project.”
According to Census figures, no new multifamily permits for Santa Fe for five or more units were issued between 2000 and 2006. Also, Santa Fe is one of the most expensive markets for homebuyers. But there are ways into the market. Developers will have to get used to working closely with residents to get deals done, said Allegretti.
“We’ve had 52 meetings over the past four years involving our latest project,” said Allegretti. “Right now, the way our solar panels look concerns people. It’s exhausting but worth it.”
Wiv Co. has developed the live/work concept at two properties: The Lofts at Cerrillos and The Lofts at Marquez Place, totaling a combined 164 units. In the works for Wiv Co.: More live/work lofts, 21 residential units above office and retail space at the newly developed Santa Fe Railyard area, known as The ArtYard. The city purchased 50 acres of the land near the heart of downtown with the help of the Trust for Public Land in 1995 for about $24 million. Rail service will connect the mixed-use project to the city of Albuquerque, about 65 miles to the northeast.
“There’s a need for more housing for the middle-class here,” said Allegretti. “Those are the people we are targeting.”