Trends, ideas, and considered opinions from multifamily developers and market experts at Marcus & Millichap’s “Multifamily Forum,” held earlier this year in Chicago:
> Bigger units are selling like crazy. “The supply of condos out there is high end and much larger in size,” said Tom Weeks, Executive General Manager for Development, Lendlease. Ditto for rentals, said James Letchinger, President, JDL Development. “We’re seeing a new wave of renters with empty nesters wanting to move downtown,” he said. His firm experienced “unbelievable leaseup” for the larger units in one of its downtown buildings.
> The workforce shortage is killing business. “There just aren’t enough subs to get the work done,” said Letchinger. “There’s a huge workforce out there that’s just not being tapped. We need to get people into the unions, and we need the big contractors to help more minorities to become owners of their subtrade firms.”
> Keyless entry is going to be the new norm in multifamily. Alex Samoylovich, CEO, Cedar Street, said he’s working toward keyless entry via tenants’ cellphones across his firm’s portfolio of 18 properties. “Seventy-five percent of our tenants have given us permission for keyless entry into their units to deliver packages,” he said. Keyless technology can even be a revenue stream, he said. “We did $85,000 last year in lockouts.”
> Parking is going away in crowded urban markets. “Our ratio now is 0.4 spaces/unit, and zero parking in TODs,” said Sar Peruri, Principal, Oxford Capital Group, developer of the 429-luxury-unit Essex on the Park, Chicago. Derek Lopez, Managing Director, GEM Realty Capital, said his firm is looking into how to repurpose its parking decks down the road. But panelists agreed that resident parking is still essential in second-tier cities and the suburbs.
> Figuring out what Millennials want remains a puzzlement. “They’re now 35, not 25, and they’re forming families,” so their housing demands are changing, said Jim Driscoll, SVP of Development, Waypoint Residential. But John S. Sebree, Marcus & Millichap’s National Director of Multifamily, said, “Tenants in B and C apartments”—many of whom presumably are Millennials—“will usually start buying homes, but that’s just not happening.”
> The amenities war is “out of control,” said Alan George, Chief Investment Officer, Equity Residential. “We’re building small, usable conference rooms, with really good WiFi,” he said. “That’s really important.” But he questioned whether building, say, a full indoor basketball court is justifiable. Choosing the right mix of amenities for each project is critical.
> Rightsizing amenities remains an art form. Lindsey Senn, VP at Chicago developer Fifield, said that at the firm’s 390-unit Sinclair luxury tower, “We built the biggest fitness center we’ve ever done, and the residents said they wanted even more.”
> Teamwork is more important than ever. “With construction costs going up, the teamwork with the developer, the contractor, the architect, and the interior designer has to be even more intense,” said Jack Boarman, Partner, BKV Group. “We need to find new ways of manufacturing, like modular baths, and subtrade innovation that can save time and money.”
Related Stories
| Jul 2, 2014
SHoP designs what would be Brooklyn's tallest building
JDS Development partners with SHoP to construct a 70-story building at 775-feet tall, unprecedented for downtown Brooklyn.
| Jun 30, 2014
Research finds continued growth of design-build throughout United States
New research findings indicate that for the first time more than half of projects above $10 million are being completed through design-build project delivery.
| Jun 30, 2014
Narrow San Francisco lots to be developed into micro-units
As a solution to San Francisco’s density and low housing supply compared to demand, local firms Build Inc. and Macy Architecture each are to build micro-unit housing in a small parcel of land in Hayes Valley.
| Jun 30, 2014
Harvard releases the State of the Nation’s Housing 2014
Although the housing industry saw notable increases in construction, home prices, and sales in 2013, household growth has yet to fully recover from the effects of the recession, according to a new Harvard University report.
| Jun 30, 2014
OMA's The Interlace honored as one of the world's most 'community-friendly' high-rises
The 1,040-unit apartment complex in Singapore has won the inaugural Urban Habitat award from the Council on Tall Buildings and Urban Habitat, which highlights projects that demonstrate a positive contribution to the surrounding environment.
| Jun 30, 2014
Gen X, not Baby Boomers, spending the most money on homes [infographic]
It turns out that Generation X, who have the highest incomes of the three generations surveyed, are paying the highest home payments and tend to have the largest households.
| Jun 25, 2014
The best tall buildings of 2014
Four high-rise buildings from multiple continents have been selected as the best of their region. The best worldwide tall building will be announced November 6.
| Jun 20, 2014
Sterling Bay pulled on board for Chicago Old Main Post Office project
Sterling Bay Cos. and Bill Davies' International Property Developers North America partner up for a $500 million restoration of Chicago's Old Main Post Office
| Jun 19, 2014
First Look: 10 Design unveils new luxury apartments plan in Dubai
The Seventh Heaven complex features a stepped form that will offer stunning views of the Dubai skyline.
| Jun 19, 2014
First look: JDS Architects' roller-coaster-like design for Istanbul waterfront development
The development's wavy and groovy design promises unobstructed views of the Marmara Sea for every unit.
