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 19, 2013
Reconstruction Sector Architecture Firms [2013 Giants 300 Report]
Stantec, HOK, HDR top Building Design+Construction's 2013 ranking of the largest reconstruction architecture and architecture/engineering firms in the U.S.
| Jul 19, 2013
Renovation, adaptive reuse stay strong, providing fertile ground for growth [2013 Giants 300 Report]
Increasingly, owners recognize that existing buildings represent a considerable resource in embodied energy, which can often be leveraged for lower front-end costs and a faster turnaround than new construction.
| Jul 17, 2013
Top Multifamily Construction Firms [2013 Giants 300 Report]
Lend Lease, Clark Group, Balfour Beatty top Building Design+Construction's 2013 ranking of the largest multifamily contractors and construction management firms in the United States.
| Jul 17, 2013
Top Multifamily Engineering Firms [2013 Giants 300 Report]
STV, URS, AECOM top Building Design+Construction's 2013 ranking of the largest multifamily engineering and engineering/architecture firms in the United States.
| Jul 17, 2013
Top Multifamily Architecture Firms [2013 Giants 300 Report]
IBI Group, Niles Bolton, Perkins Eastman top Building Design+Construction's 2013 ranking of the largest multifamily architecture and architecture/engineering firms in the United States.
| Jul 17, 2013
CBRE recognizes nation's best green research projects
A rating system for comparative tenant energy use and a detailed evaluation of Energy Star energy management strategies are among the green research projects to be honored by commercial real estate giant CBRE Group.
| Jul 16, 2013
Amid single-family housing’s comeback, rental market not skipping a beat [2013 Giants 300 Report]
As the economy recovers and homeownership becomes a realistic option for more consumers, will it spell the end of the multifamily sector’s hot streak? The experts say no.
| Jul 15, 2013
Developer plans to convert historic Kansas City high-rise to mixed-use with 55 new apartments
An $18 million redevelopment proposal would convert a historic Kansas City high-rise into a commercial/residential property.
| Jul 15, 2013
Zaha Hadid unveils plan for boutique condo development in New York
Related Companies taps the London-based architect for the 11-story 520 West 28th Street residential development adjacent to the High Line in Chelsea.
| Jul 11, 2013
Lawsuit challenges modular apartment project in New York City
A plan to build pre-fab apartment buildings at Atlantic Yards in Brooklyn, N.Y., has been challenged by a lawsuit filed by the Plumbing Foundation in Manhattan Supreme Court.