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After dropping in price by a couple hundred thousand dollars, a property on East Burnside Street has finally caught the eye of interested developers.

A group called Ankeny Building LLC has purchased a lot at 1424 E. Burnside St., where it plans to develop a five-story apartment building with approximately 42 units. The group only recently submitted plans to the city, but is already in for permitting in an effort to begin construction as soon as possible and meet demand in one of Portland’s tightest submarkets.

“The neighborhood appears pretty hot right now,” said Brett Schulz of Brett Schulz Architect, the project’s designer. “… Inner southeast (Portland) has the lowest vacancy rate for apartments of anywhere in the city, and perhaps the country – it’s like 1.7 percent. So there’s obviously pent up demand..”

The group is currently in the process of selecting a general contractor. Schulz said construction could be under way within the next two months, depending on when the city issues the permit.

Deborah Imse, the executive director of Multifamily NW, said the area surrounding East Burnside Street is one of the tightest in the city in terms of apartment vacancy, due in large part to a demographic shift in living preferences.

“Younger people want to be closer to the downtown market,” she said. “They’re not as driven by the need to have a car, and in fact they’d rather take public transportation. So the closer they can get to downtown the better.”

Schulz said that’s driving his client’s project as well. The property was on the market in February 2013 for $689,000 – a $100,000 discount from the original price. Ankeny Building LLC picked it up last June for $585,000.

It’s currently home to a 118-year-old house that has been converted to apartments with retail on the ground floor. In recent years, it was home to Adolph Jackson’s Flowers.

Schulz said little of the house’s historic charm remains. The group was unable to find anyone willing to relocate it elsewhere, so it will be demolished.

The new building – to be called Ankeny Apartments – will feature four floors of wood framing over a concrete podium, with three retail spaces on East Burnside Street and a lobby fronting on Southeast Ankeny Street.

Most of the building will consist of one- and two-bedroom units ranging between 450 and 650 square feet, but Schulz said some larger two-bedroom units on the fifth floor will be closer to 1,000 square feet.

The facade will be mostly Hardie-panel siding with accents of mahogany. Schulz said the building will also have a pitched roof with dormers in an effort to soften its look as it ties into the residential neighborhood to the south.

Greg Moulliet, a board member for the Buckman Community Association, likes the plan. A handful of other multifamily developments are going up around the neighborhood, but Moulliet said he’d like to see more in the name of creating a more livable and walkable neighborhood.

“If we’re going to build within the urban growth boundary, I think our neighborhood is a good place. It’s good to have development on arterial roads, which this is,” Moulliet said. “… I’ve heard people talking about how hard it is to find a place (to live) in the neighborhood. Houses are more expensive than many can afford and rental units are very scarce. So more rental units means more people that want to live in this neighborhood can live in this neighborhood, and I support that.”

Despite young city dwellers’ preferences for public transportation, Schulz said vehicle parking remained the biggest concern for nearby neighbors at a recent meeting. While only 11 stalls are required by city code, he said his group plans to provide 18 – assuming they can get the city’s approval to adjust the angle of those spaces to make them fit.

Schulz said that together with street improvements the city has on tap for the not-too-distant future, the Ankeny Apartments should help create a sense of place along East Burnside Street.

“We just think it will create a vibrant neighborhood that heretofore has not been recognized as a node or community center,” Schulz said. “We feel this building will help produce the energy that will make the … neighborhood a bonafide neighborhood node.”