The developers who renovated Boise’s former Owyhee Hotel five years ago into today’s The Owyhee have just sold it.
LocalConstruct, a Los Angeles firm, and longtime Boise developer Clay Carley sold the Downtown building Thursday to a company controlled by Diana Hendricks, the Wisconsin billionaire who bought Boise’s three-building BoDo retail and office complex 17 months ago.
It was not immediately known what Hendricks’ company, Rockton Riverview LLC, plans for the commercial and apartment building at 1109 W. Main St. Phone messages left Monday for executives at Rockton and its sister company, Hendricks Commercial Properties, in Beloit, Wisconsin, were not immediately returned.
Renovating the historic Owyhee Hotel, built in 1910, was LocalConstruct’s first entry into the Boise commercial real estate market. LocalConstruct cofounders Casey Lynch and Mike Brown had seen Boise city government’s analyses of demand for Downtown housing and had seen renovation projects like they and Carley envisioned work in other cities.
“It was an easy leap for us to make that it would work in Boise as well,” Lynch said in a telephone interview from Los Angeles.
The apartments quickly drew tenants, opening the door for Lynch and Brown to build more high-end apartments Downtown. They have since built and opened The Fowler, 401 S. 5th St., which succeeded the renovated The Owyhee as the most expensive apartment building in Boise, according to Lynch. A 706-square-foot, one-bedroom apartment at The Owyhee was listed in mid-March for $1,360 per month. A comparable unit at The Fowler starts at $1,292, with two-bedroom, two-bath units starting at $1,589.
Lynch and Brown also built The Watercooler, a smaller, less-expensive apartment building at 1401 W. Idaho St. Brown has stepped back from the business, but Lynch is now preparing to build The Cartee, an apartment building that will be comparable to The Fowler in cost and amenities and just down the street at the southeast corner of 4th and Broad streets.
Lynch said he and Brown were drawn to The Owyhee by the chance to resurrect a culturally important, historic building Downtown.
“It gave us the opportunity to plant our flag Downtown by doing something the community would support,” he said. “We were able to convert units for less than it would have cost to build new. We were able to test the demand [for high-end apartments].”
So why sell?
“We really focus our business on multifamily housing,” Lynch said. At The Owyhee, “there’s a large commercial component. ... It’s predominantly commercial office space. Our management platform isn’t set up to be effective in that kind of space.”
Most of the six-story building that housed the original Owyhee Hotel is now offices. An attached four-story expansion in 1960 added 72 hotel rooms to the west of the original hotel. LocalConstruct and Carley took those 72 rooms and converted them to 36 apartments, most one-bedroom.
“We did as much as we could with The Owyhee,” Lynch said. “We brought in some good tenants. We brought in a great restaurant, the Owyhee Tavern. We love the building. We’re happy to see it in the hands of new ownership we think will maintain the character and quality of the building and provide a good environment for tenants.”
Lynch declined to disclose the sale price. The property is assessed for tax purposes at $14,350,000 in 2018, down from $16,861,600 in 2017.