An emerging market-disruptor is changing how students live in college communities. Purpose-built student housing, referenced in an earlier blog post of ours, is a customized program tailored to students who choose to live off-campus. While any student housing community can make this claim, the purpose-built student housing model has clearly defined characteristics that are truly geared toward meeting individual student needs.
Incoming college students identify the quality of student housing as a primary deciding factor for which school they’re going to attend. According to Campus Advantage, “College campuses are like small cities in themselves, where students live, study, and work all in the same area. This campus-centric lifestyle drives a need for a different kind of housing – one that is not typically fulfilled by conventional housing options.”
Key differentiators of purpose-built student housing include:
One of the most unique characteristics of purpose-built student housing is the leasing model. Compared to traditional student housing arrangements that lease by the unit on a 12-month basis, purpose-built student housing allows students to lease by the bed for the months they are enrolled at school.
Fully Furnished Apartments
To eliminate the burden of furnishing a unit, purpose-built student housing can offer fully furnished spaces, complete with living, dining, and bedroom furniture, and kitchen appliances.
Beyond the units and furnishings, students are drawn to in-demand amenities, especially those promoting a healthy lifestyle. “Best-in-class 24/7 fitness centers, resort-style swimming pools and spas, multi-purpose rooms that can be used for yoga or other activities, study rooms, sand volleyball courts and basketball courts are the norm,” says Fred Pierce, founder of Pierce Education Properties, in an interview with Forbes.
Updated technology capabilities are a must, and purpose-built student housing buildings respond by offering high-speed internet and wireless services.
Is It Affordable?
The short answer is yes, and it’s largely due to the available leasing options. Depending on the financial situation, a student may choose to lease only a bed rather than committing to a lease on an entire apartment or house. This comes in handy if a roommate leaves unexpectedly. “For lower income students or those looking to help fund their college education, purpose-built student housing presents an opportunity to work where you live and live with your friends, all while being close to your campus,” adds Pierce.
Among the more popular examples of purpose-built student housing, are communities located in Pittsburgh and Knoxville. The Bridge on Forbes, serving students attending the University of Pittsburgh and Carnegie Mellon University, is a 489-bed, 10-story building, featuring fully furnished apartments with utilities included in the lease.
The Knox accommodates students attending the University of Tennessee. Like The Bridges on Forbes, this community offers fully furnished units, plus individual leases by the bed, and a roommate-matching program.
“For lower income students or those looking to help fund their college education, purpose-built student housing presents an opportunity to work where you live and live with your friends, all while being close to your campus.”
– Fred Pierce, founder of Pierce Education Properties
Our goal as a design-build firm is to create value for our clients through outstanding service-delivery and building trusted relationships. One of the many ways we achieve our goal is how we structure our contracts. Our clients want to know what they’re paying for, and we are able to clearly spell that out by providing stipulated sum agreements.
Also referred to as a lump sum contract, a stipulated sum requires a builder to agree to provide specified services for a fixed price based on labor and material costs. The builder is responsible for executing the job properly and will provide its own means and methods to complete the project. Specifically, we use stipulated sum agreements with our multifamily and commercial projects, and they allow us to better define the scope and schedule of projects.
“The Mosaic Construction way is to be a client-first company in which we anticipate needs and focus on relationship-building,” said Singer. “We’ve always led with this approach, and our clients understand the value of that.” – Ira Singer
Mosaic Construction uses stipulated sums so that our clients know what they’re getting, and we know exactly what we need to deliver. Our contracts are predictable and easy to manage and benefit our clients in the following ways:
One of Mosaic Construction’s key differentiators is that we never stick our clients with hidden fees, compared to cost-plus-fixed-fee and other contracts. “Our fees are transparent compared to other contractors,” said Ira Singer, Principal of Mosaic Construction on the This is the Real Estate Investing for Cash Flow podcast. “We have no incentive to say, ‘Okay, it’s going to be this much money for cost.’ Stipulated sums are integral in forging trusted relationships with our clients.”
Our clients value the predictability of stipulated sum agreements, especially since they reduce risk and give them more confidence. With an agreed upon sum in place, our clients are not liable for any cost overruns. “We formulate construction based on our time and our investment to manage that project and steward it,” added Singer. “Whatever the cost of the project, our timeframe for completion and our fees will remain the same. In this respect, both parties are incentivized to stay on schedule and finish the job on time.”
We find that stipulated sum arrangements foster a greater degree of collaboration between Mosaic Construction and our clients. We are able to execute tight project management and more efficient communication to ensure that both parties are adhering to the scope of work. “The Mosaic Construction way is to be a client-first company in which we anticipate needs and focus on relationship-building,” said Singer. “We’ve always led with this approach, and our clients understand the value of that.”
The design-build methodology supports our goal because it allows us to streamline the construction process, which ultimately benefits our clients and our management team. “We view our projects as investments in our clients’ growth and development,” added Singer. “We never think in terms of being one and done; rather, we create an atmosphere where our clients can focus on business development, while we do the best work possible for them.”
As we previously reported, 2018 was a banner year for multifamily housing, with a 44% increase in sales accounting for more than 30% of the total U.S. real estate investment sales. What is the health of the 2019 multifamily housing market through the first two quarters, and where will it go from here? Freddie Mac has answered these questions and more in its Multifamily 2019 Midyear Outlook. Overall, the outlook is positive, showing signs of sustainability and growth for the remainder of the year and beyond.
According to Freddie Mac, “In our research, we find that strong economic growth and the robust labor market continue to support the strength in the multifamily market. Last year ended much stronger than anticipated with near record absorptions and stronger rent growth compared with the prior few years. The first two quarters of 2019 saw mixed results, with slower growth in the first quarter, but preliminary second quarter information indicating the spring leasing season is off to a strong start. Along with the strong fundamentals, lower interest rates continue to drive origination volume higher throughout 2019.”
It is anticipated that the labor market–with low unemployment and wage growth–will continue to drive housing demand, benefiting multi-family properties. As the report states, “Pending any broader economic event that would impact the labor market, there is no real estate specific headwind on the horizon that could disrupt the favorable outlook for multifamily through the rest of this year and into the next.”
Multifamily originations–or fees associated with processing a loan–are continuing their upward trend from 2018 through the first two quarters of 2019. Originations have increased by 8% to $336 billion. “The 10-year Treasury reached 1.75%, a decline of 150 bps (basis points) from last November,” the report says. “Rate declines generally drive origination volume higher, and with a drop of this magnitude to very low levels, forecasts must be decisively higher than earlier in the year.”
Absorption rates, by contrast, saw strong gains in 2018 only to stall thus far in 2019. “The first quarter of 2019 saw absorptions wane and high levels of new supply entered the market, but strong gains in the second quarter suggests the trends for multifamily are not yet turning.”
“In our research, we find that strong economic growth and the robust labor market continue to support the strength in the multifamily market.” – Freddie Mac
Multifamily demand is outpacing new supply, as there is a shortage of housing compared to households. Total housing completions over the past three years have averaged 1.1 million housing units each year, while the number of households have increased on average 1.4 million. Per the report, “The continued increase in multifamily construction when the overall housing market continues to remain unbalanced is not necessarily an oversupply concern as the economy struggles to build enough housing.”
The multifamily market is bright. Freddie Mac projects overall growth for the remainder of 2019 and into 2020 with high-demand spurring on new construction. “As this supply enters the market, we expect vacancy rates to increase throughout the year, but only marginally, up to 5.2%. We anticipate that rent growth will remain healthy at around 4% in 2019.”
MB 170: MAXIMIZING ROI IN VALUE-ADD MULTIFAMILY DEALS – WITH IRA SINGER
Announcer: This is the Apartment Building Investing Podcast, with Michael Blank, episode 170. Let’s do this.
Announcer: You’re listening to the Apartment Building Investing Podcast, where we’ll talk about all aspects of buying apartment buildings with a special focus on raising money from others.
Announcer: And now, your host, Michael Blank.
Michael Blank: Hey everyone, and welcome to the show. I am your host, Michael Blank. I’m super excited that you’re here to learn more about apartment building investing. The best way to become financially free with real estate.
Michael Blank: Excited about today’s show. We’re going to talk about construction today, and the different ways that we can build value.
Michael Blank: So actually I have two guests. A construction expert, and someone who’s very, very intimately familiar with ROI based on amenities, and other improvements. So we’re going to really drill in on how to manage a construction company, and different ways you can add value to a value-add deal.
Michael Blank: I also want you to know, I’m being really, really active, or trying to be, on social media. Actually on the Facebook page, and Instagram, the handle is themichaelblank, that’s T-H-E- Michael B-L-A-N-K. So hang out with me there. Say hello.
Michael Blank: I also have a new Facebook group called Apartment Investor Networks. I’ve got several thousand people on there, and so myself, and our mentors, and our advisors, are active there. It’s a great place for you to ask questions. So make sure you check us out.
Michael Blank: Hey, in a couple of weeks, we’re going to be at Deal Maker Live. That’s July 26, 27, in Dallas. We still have a few tickets left. We’re expecting well over 500 people there, and we just added a few more tickets to that. So head over to dealmakerliveevent.com, or just google Deal Maker Live, and try to grab your tickets before they’re all gone. So we’re going to have a huge lineup of multifamily experts there, including Robert Helms, real estate guys Joe Fairless, Michael Becker, Adam Adams, Corey Peterson, and our keynote is Hal Elrod, the author of The Miracle Morning. Super excited to get to know him a little bit more, as well.
Michael Blank: All right. So with that, let’s get right into the show here, to learn about construction and ROI.
Michael Blank: Ira, welcome to the show today.
Ira Singer: Thank you. How are you?
Michael Blank: Very good. Very good. So we’re going to get all into construction, and ROI to get out of that construction. So I’m really excited to get into it.
Michael Blank: Before we get started, just give us a quick background on you and your company.
Ira Singer: Thank you. My name is Ira Singer. I am one of the principals at Mosaic Construction. We are a general contractors in Northbrook, Illinois, with a construction management practice that prefers the design build methodology, where we are at the table, helping with selection of finishes, scope of work, pre-budgeting.
Ira Singer: But we are experienced and adept at working in the multifamily industry, both in asset classes from market rate, to affordable, into senior housing. We’ve worked in student housing. We’ve done, in our geographic, and adjacent to our state, we’ve had value-add. We’ve had repairs, exterior work. There’s a lot of things that we have experience in, from both an exterior, and an interior point of view. We’ve worked in units. We’ve made accessibility choices with our clients. So it runs the gamut.
Ira Singer: I’m looking forward to our discussion, and what I can help your listeners with. So let’s get going.
Among the operational challenges that multifamily managers encounter is what to do during dry leasing periods. Enter companies like WhyHotel and Stay Alfred that take un-leased apartments and convert them into furnished, amenitized hotel units. This pop-up hotel model has been gaining traction. Zak Schwarzman, an investor in WhyHotel, told Forbes, “It’s no surprise that companies in this category with a clear value prop are receiving a warm reception from the multifamily community. WhyHotel offers developers significant newfound revenue by managing their yet-to-be-rented inventory as short-term hospitality during a building’s lease-up period. Who would say no to that?”
To eliminate the notion of black market short-term rentals, multifamily managers are taking a proactive approach to the leasee-turns-landlord problem. YOTELPAD in Miami became the first condo community to permit restriction-free short-term rentals. David Arditi, founding principal of Aria Development Group, the developer of YOTELPAD, told Forbes, “We’ve heard many stories of residential buildings having to deal with owners who are trying to skirt local legislation by renting out their units on a short-term basis. They are typically not allowed to do so given condominium association and zoning restrictions. We thought, why not do something that addresses this head on and gives people the option to do what they are asking for?”
Making life easier for multifamily property managers are companies like San Francisco-based Pillow, which provides the tools for property managers to control all short-term rental hosting in their buildings, as well as share in the revenue, ensure local regulatory compliance, and insure against damage.
Multifamily home-sharing has the support of NMHC and the National Apartment Association, two of the most influential industry and advocacy organizations. “NMHC/NAA support the right of multifamily firms and other property owners to participate in all aspects of the sharing economy, if they so choose, and if it is done in full compliance with existing law and regulations,” according to an NMHC home-sharing fact sheet. The fact sheet emphasizes that the choice is ultimately up to multifamily property owners, but it encourages the practice as it creates additional revenue streams. “Policymakers at all levels wanting to regulate the short-term rental market should be cautious as to not inhibit the benefits of the sharing economy, while ensuring that the protection of private property rights and contractual obligations between property owners and residents are respected.”
Multifamily home-sharing is more than a trend and will seemingly continue to evolve. We previously covered Airbnb’s entrée into the multifamily property manager partnership with its Niido brand, which launched its flagship property in Orlando. The program has been so successful that the company is expanding into Nashville with plans to open up to 14 more properties by 2020. This combined with the momentum of short-term rentals positions the home-sharing model to generate more cash and lower operational costs to reduced unit turnover and improved brand awareness for multifamily property managers.
“Maturing Millennials” or those around age 34 are having babies at a higher rate compared to the rest of their generation. As we’ve previously written, they are influencing the urbanization of the suburbs movement by seeking more space in markets they can afford in so-called second tier municipalities. As Building Design + Construction reports, “…while Millennials are moving out of their parents’ houses and into multifamily developments, the developments that they want are in secondary and suburban communities where they can afford larger, more affordable space. This means they’ll be looking for mixed-use suburban locations with a bit of urbanism, as well as transit-oriented developments so they can get to work in urban commercial centers.”
Millennials also don’t overlook lobbies. “An active, inviting lobby is always important, as it is the first impression that the renter and his/her guests see upon entrance,” says Building Design + Construction. “The lobby should be open and situated like a lounge, evoking the feeling of an extended hangout space.”
In lieu of buying a home and paying a mortgage, Millennial renters prefer to allocate those funds toward higher-end apartments offering luxuries that a starter home would not. In addition to the above amenities, these luxuries include security and concierge services, in-unit laundry and dishwashers, and conveniences such as smart controls for HVAC systems, dog parks, pet washing stations, recycling services and electric car charging stations.
The total student loan debt in 2018 was $1.6 trillion, which has made it difficult for recent college graduates to save. With rents increasing in larger cities, Millennials are seeking side-hustle income property opportunities. Traditionally, this has been conducted by property owners, but Airbnb and certain landlords have recognized an opportunity and market for home-sharing for tenants. Niido Powered by Airbnb launched in 2018 and features rentals in Orlando and Nashville. “Rent your couch, a room, or your entire apartment to offset your rent or pay for your next trip,” according to the company website. “By using your apartment to generate extra income, we enable residents to spend their time and money the way they want, while at the same time supporting a global community of travelers and adventure seekers.”
“This trend really helps increase patient satisfaction by improving comfort and mental well-being, “ says CME. “Patients in waiting rooms that are well-designed are often more patient and find average wait times more agreeable.”
Innovative medical practices design spaces that leverage technology to improve patient satisfaction and make it easier for staff to do their jobs. Renovating offices to incorporate digital kiosks, for example, creates many advantages. Patients can check themselves in or out and make follow-up appointments, front desk staff can focus on important tasks, and congestion due to foot traffic is reduced.
“This current landscape is in large part the result of private physicians joining group practices at large healthcare systems and institutions creating specialty clinics to maximize their service offerings and broaden their reach,” According to Healthcare Design Magazine. “And exactly what shape those efforts take is key to providers differentiating themselves among the competition.”
The more functional a medical office, the better engagement and productivity are among staff. Care team members benefit from collaborative spaces, compared to dedicated physician’s offices. These onstage/offstage layouts are growing in popularity and place clinical staff in a central core and create group work areas where nurses and physicians work alongside each other.
In many ways, bedside manner extends beyond provider and patient interaction to the way patients feel about the environment of a medical office. Renovations that are patient-centric and cater to their comfort needs will create a winning situation for them, as well as providers, and property owners and managers.
Traditional package management is causing headaches for property managers. Boxes from Amazon, groceries, and other deliveries inundate front offices (UPS delivered 800 million packages during the 2018 holiday season, up 50 million from 2017. That’s not including deliveries from the USPS and other shippers.). Staff spend hours logging deliveries, and the additional time and manpower is expensive. Residents are feeling the burden by not being able to claim their packages outside of regular office hours. Additionally, there are the legal liabilities associated with lost or damaged items.
Multifamily property managers are adapting by redesigning package rooms and management systems to accommodate tenants in the following ways:
Dedicated Package Delivery Centers
The traditional mailroom is a dying breed, as apartment and condo buildings have been installing dedicated package delivery centers for the last ten years. “Such facilities have grown in number and sophistication as the flood of packages has risen, and as residents’ reliance on them has gone up exponentially,” according to Building Design + Construction.
Package management system disruptors are playing a major role. Multifamily Executive calls 2018 the “tipping point” of package-management automation. Property managers are taking advantage of the technology to reduce costs and create a more self-sufficient environment. Companies like Package Concierge and Parcel Pending allow deliveries of packages in secure lockers that are accessed using touch-screens. Residents receive text messages with PIN numbers to alert them of package-arrival, and they can retrieve them whenever they’d like. The technology is so popular that the lockers are now being used in retail and grocery locations, corporate campuses, and universities.
Creating Community Experience
If tenants are happy, so are property managers and investors. Successful multifamily properties focus on enhancing the resident experience, and designing the right package area helps foster community. Per Building Design + Construction, “Many rental and condominium communities integrate package centers into high-traffic areas. Not only does this make it easier for couriers to find the center and deliver packages, it also makes receiving a package a neighborly event. If planned and designed appropriately, package centers can strengthen community ties among residents. The inclusion of communal tables and recycling bins gives residents the option to open their packages immediately while socializing with their neighbors.”
Renovating package centers and investing in new technology is essential for meeting the demands of today’s delivery volume and tenant needs. The best package-management systems provide secure, 24-hour access, keep package areas neat and clean, and free up time and energy of building staff.
“We will rebuild Notre Dame together,” pledged France’s President, Emmanuel Macron directly following the fire that caused widespread destruction to the 850-year-old gothic cathedral in April of 2019. The French and the global community appear unified in the goal to rebuild the NotreDame as $1 billion has been raised so far toward that effort. However, exactly what restoration will look like is a different story.
On May 27, the French Senate passed a bill ordering that the cathedral, which lost its iconic 90-meter spire to the fire, must be restored to exactly the way it was before. The bill also removes a clause giving the government the power to override planning, environmental and heritage protection, and public regulations, which means the Senate and National Assembly must agree on a final version before it becomes law.
How to restore the Notre Dame is the international architectural controversy du jour. We may yet see an even newer bill that will impact the final plans. More than half the French want it rebuilt as it was, with one quarter favoring a more modernist approach.
Here at Mosaic Construction, we believe that if a classic structure could be as faithfully restored as possible, then it should.
“Watching the fire unfold was significant to me,” says Andy Poticha, our Principal and CEO, who spent his honeymoon in Paris in 1991. “Visiting the Notre Dame Cathedral was one of my most memorable events. As someone trained in architecture, it was very difficult to see one of the world’s premiere monuments almost completely burn down to the ground.”
While we’re not cathedral or gothic specialists, we understand first-hand the value of restoring properties to their original form. The Notre Dame Cathedral is an architectural, historical, and cultural feat that deserves a triumphant restoration.
The Challenges Of Restoring Such a Structure
President Macron and Prime Minister Édouard Philippe want the cathedral rebuilt within five years, which critics believe is unrealistic. It’s worth noting the Herculean effort required for the full restoration, including but not limited to archaeological and forensic expertise.
“Evidence for the evolution of that building is in the physical fabric, so you’ll need an army of archaeologists all over it to better understand which parts they’re repairing and what they belong to,” says architectural historian and broadcaster, Jonathan Foyle. “The stripped roof and upper masonry will reveal aspects of the building’s history which probably haven’t been understood. Notre Dame has virtually no building records. We know (that construction) started in 1163 and was basically completed by about 1240, but there are no building accounts.”
John Burton, an architect and a surveyor of conservation, who works at Canterbury Cathedral and Westminster Abbey, predicts a painstaking forensic process of sifting through valuable debris that will require special committees to assess each of the elements, “from stained glass to gold plating. It will then be down to a master architect to bring the overall design together.”
Architect Peter Riddington, who worked on the restoration of Windsor Castle after it was damaged by fire in 1992, refers to these groups as committees of taste. “My guess is they will need to have a committee of taste to make decisions on even the most fundamental things like, what is the cathedral, once restored, going to look like,?” he adds.
Once this preliminary work is completed, the building process can begin but only by the highest level and most specialized of trades.
“A lot of people in the stone industry become sculptors … but cathedral work is very, very different,” according to Christian Frenzel, an Australian cathedral stonemason, who recently restored gargoyles at the Smyth Memorial Chapel located inside Adelaide’s West Terrace Cemetery. “Some people who have worked for 50 years as stone masons would not be allowed to do cathedral work. It is very elite…Tracery windows have to be millimetre perfect and if there are flower ornamentations on there, then that will have to be almost perfectly replicated.”
Controversy Over Modern Design
We’d be remiss if we didn’t mention that the Notre Dame experienced previous restorations. “Notre Dame is not a building that has been fossilized in time, Foyle said. “It has not remained static since the early 13th century.”
For example, it’s prominent spire was the product of a restoration in the 1800’s, made taller and more elaborate by architect Eugène Viollet-le-Duc. The same restoration included profound changes to the facade and interiors. Yet that’s hardly the same as many contemporary proposals.
In the immediate aftermath of the fire, Prime Minister Philippe announced a competition for original ideas for the cathedral, and designers flooded Instagram with their renderings. Some were outlandish, including installing a swimming pool on the cathedral’s roof.
“I believe that Notre Dame should be resorted to what it was. Period,” says Poticha. I don’t understand changing anything or making it different.”
He’s not alone.
“I think the problem is that architects want their intervention to be visible,” says Frank Matero, University of Pennsylvania architecture professor and chair of historic preservation. “They see the creative act as highly visible. But the best restoration is that which is invisible.”
Restore to Its Original Form
Though the specter of additional changes hovers over the current Senate bill, the French and preservationists writ large have spoken, and their voices are loud and clear to restore the Notre Dame to its original form.
“It still is a Gothic cathedral,” says Frenzel. “To fulfil traditional conservation and restoration guidelines, it has to be rebuilt as it was.”
The silver lining is what survived the fire. Firefighters were able to preserve the cathedral’s main structure, including the outer walls and two bell towers. Artifacts and artwork were saved as well, like the Crown of Thorns, the Blessed Sacrament, and more items.
“This is a 12th century masterpiece,” says Poticha. “I keep thinking about its historical significance.”
Baby boomers and millennials have their sights set on dynamic, live, work, and play opportunities in the suburbs. In other words, the urbanization of the suburbs is here, and multifamily investors are responding in kind. In a sense, the suburban market is being turned on its head as investors create a practical transfer of urban-style features–including walkability, access to retail and restaurant amenities, and dense housing–beyond the city limits.
These factors outline how multifamily investors are urbanizing the suburbs.
Investors understand that you can’t fit a square peg in a round hole by trying to replicate city-living in the suburbs. “As these sub-hubs multiply across the country, what’s clear is that no single prototype will work since suburbs vary from tiny communities with a single stoplight to large ones considered small cities,” According to Multifamily Executive. “Yet, the locations most likely to thrive share the common denominator of being hybrids that borrow some parts from their lively urban counterparts and retain their bucolic and other suburban advantages.”
Employment opportunities close to residents can be a strong incentive for investors when selecting one suburban site versus another. There needs to be some form of mass transit or highway network to get residents to them. Chevy Chase Lake, for example, is a mixed-use, transit-oriented community in the Maryland suburb of Chevy Chase close to Washington, D.C. with access to the Metro’s Purple Line. Just to the north in Rockville an 1,100-unit multifamily neighborhood is being developed in a 90-acre industrial park along another Metro line.
However, development is proving to be more challenging in Tysons, Virginia, an “edge city” of DC. “The grid of streets planned for Tysons exposes the challenges of transforming suburbia,” according to Public Square: A CNU Journal. “The grid is mostly internal, with few connections to surrounding subdivisions. Three highways interrupt the network. The plan now underway is a huge improvement, yet ongoing retrofit is needed, perhaps decades from now, that connects the downtown to surrounding cul-de-sacs and loop roads.”
“Placemaking, if applied thoughtfully and well executed, provides the soul for our communities through the design of a contextual urban framework of pedestrian friendly neighborhoods, open spaces and a vibrant urban environment created by the layered realm of architecture, landscaping, signage and lighting.”
Multifamily Executive emphasizes this point, using the example of a multifamily property in Richmond, Virginia: “Richmond, Va., which experienced a boom in Millennials moving downtown after 2010, is now seeing a swing back to the suburbs. Good infrastructure was already in place in Richmond’s suburban counties like Henrico County. But to attract mixed-use, multifamily living, the suburban counties recognized that traditional policies and approaches to land planning needed to adjust. Rather than create big urban-like downtown cores in various suburbs, the goal was to fashion compact, pedestrian-focused projects along existing corridors to stimulate development and rejuvenation that takes advantage of existing infrastructure.”
Retail, office, and residents need each other. The success of a neighborhood relies on the well-planned intersection of commercial and multifamily renovation. Similar to the proximity of communities to transit, everything should be close by. Tenants want to live five minutes from
from coffee bars, grocery stores, and entertainment. Finding the right balance is key, according to Multifamily Executive: “The answer for both suburbs—as well as cities, even large ones—may lie in seeking retailers that have learned the importance of experiential features that consumers seem to find more relevant rather than stacks of merchandise. Entrepreneurial leaders like Apple are rolling out ideas such as workshops and classes.”
Amenities are significant considerations for multifamily living. We’ve written previously about the importance of amenity upgrades to attracting new tenants. To avoid the risk of trying too hard and unrealistically to mimic vibrant cities, investors are taking advantage of neighborhood natural amenities in their backyards, like parks, lakes, and trails. We recently renovated multiple units and hallways, as well as the package room and pool-area restrooms of a multifamily, student-centered apartment building in Evanston, an edge city of Chicago. Students also have access to the Clark Street beach and trails along Lake Michigan.
There is a shift afoot in which investors are attracting renters from the big cities. We’ll give the last word to Jose Sanchez, retail and mixed-use design leader at DLR Group, who told GlobeSt.com, “Demographic shifts illustrated that we are becoming a society that values main streets more than backyards. Walkability, density, sense of community, mixed uses and a diverse population are bringing new life to the suburbs. Placemaking, if applied thoughtfully and well executed, provides the soul for our communities through the design of a contextual urban framework of pedestrian friendly neighborhoods, open spaces and a vibrant urban environment created by the layered realm of architecture, landscaping, signage and lighting. It is also vital to understand that these new town centers should be developed in a way to attract multiple demographics and economic classes through inclusive design and programming.”