Except for a few pockets of ultra-luxury condo action—New York, San Francisco, and parts of Florida, Hawaii, and metro Washington, D.C.—today’s multifamily story is all about rentals. “The apartment sector has been a darling for investors over the past two years,” notes the Urban Land Institute in its recent Real Estate Consensus Forecast. Vacancy rates are at an enticing 5.0%, and rental rates should be up 5.0% this year, although ULI does forecast some slippage next year, to 4.0%.
“Investors continue to view apartments as a preferred asset class in today’s environment,” says Dale Connor, Lend Lease’s Managing Director, Project Management & Construction, Americas. He sees developers playing catch-up to meet the growing demand for apartments, especially in the top five rental markets: New York City, Washington, D.C., Boston, Chicago, and Los Angeles.
SCROLL DOWN FOR GIANTS 300 MULTIFAMILY FIRM RANKINGS
Savvy market-rate developers are looking for locations around universities, innovation incubators, and teaching hospitals, says Ray Kimsey, AIA, LEED AP, President of Atlanta-based Niles Bolton Associates. Land that was once set aside for retail or office development is being looked at for multifamily, especially if served by urban transit.
“If you look at the hottest neighborhoods around Washington, D.C., Pittsburgh, or Baltimore, they all have an influx of Gen-Y people graduating and wanting to stay in that environment,” he says. Kimsey says there’s even a movement toward walk-up, garden-style apartments in some suburbs and second- and third-tier cities.
The use of urban infill sites is adding to the popularity of podium-style multifamily construction, says Mathew Dougherty, PE, Vice President with McShane Construction, Rosemont, Ill. “The podium ‘stacks’ uses vertically within the existing floor plate, thereby allowing a mixed format of ground-floor retail, parking floors, and residential floor plates,” he says.
According to John Lahey, AIA, Managing Principal at Chicago-based Solomon Cordwell Buenz Associates, the rental market is being shaped by two factors: service and community.
“Service” refers to the heightened demand for amenities: party rooms, surround-sound movie theaters, fully equipped fitness centers, mega-size video screens in common areas, computer golf games that let you play any course in the world, I-GO car rentals—even “restaurant days,” where a local restaurant comes in and sells takeout dinners one night a week.
There are even amenities for canine occupants. “People love their dogs,” says Lahey, so dog walks, dog parks, dog washing bays, and dog walking and grooming services are becoming de rigueur in many large (>400 units) complexes. “People want their lives to be easier,” he says. “They want to be taken care of.”
Tenants are demanding more green amenities, says Kimsey. “Expectations about energy conservation and sustainable features are now viewed as a basic right by many tenants,” he says. “If they lived in a LEED-certified residence hall in college they want a LEED apartment”—but not if it costs more than market rate.
“Community” refers to the renter’s need for connection, says Lahey. In past decades, apartment dwellers put a premium on privacy. Less so today. “A lot of people who move back into the city, they’re not confirmed urban dwellers, and they want to meet people,” he says. “The Starbucks in your building becomes the meeting place to get integrated into the larger community.” McShane’s Dougherty says wifi connectivity has become a given in new and renovated rental projects.
“The design must be hot,” says Kimsey. The units themselves may be “smaller, tighter,” but that means they must be more elegant and efficient, with open layouts and near-condo-like finishes. McShane’s Dougherty says granite countertops, stainless steel appliances, upgraded bathrooms, and high-quality flooring are expected, even in suburban garden apartments. Developers are increasingly concerned about sound attenuation, he says, so insulation choices, assembly details, and materials selection are crucial.
Looking ahead, SCB’s Lahey says that, unlike the condo market, apartment development needs to be left to the pros—firms like AMLI, Avalon Bay, Equity Residential, Forest City, The Habitat Company. “They have the track record, and they really do know what they’re doing,” he says.
“The money is out there,” says Kimsey, but it’s split between smaller projects being funded by S&Ls and smaller banks, and big projects attracting institutional and private-equity investors. Holding back the pent-up demand: anemic job creation, which limits new household formation.
Even with low mortgage rates, many potential buyers have become skittish about purchasing a home, says Lend Lease’s Connor. SCB’s Lahey cites mobility as another factor in rental’s favor, especially with the younger generation.
“People will like living closer in, and units will get bigger, something decent in size, and they’ll be willing to pay for it,” he says. “They’ll see a home as a place in which to live, not necessarily as an investment.” +
TOP 25 MULTIFAMILY SECTOR ARCHITECTURE FIRMS
Rank | Company | 2011 Multifamily Sector Revenue ($) |
1 | IBI Group | 38,489,114 |
2 | Niles Bolton Associates | 13,772,650 |
3 | Solomon Cordwell Buenz | 12,000,000 |
4 | RTKL Associates | 11,397,556 |
5 | WDG Architecture | 9,817,297 |
6 | Perkins Eastman | 9,100,000 |
7 | HOK | 8,715,422 |
8 | Perkins+Will | 7,193,120 |
9 | ZGF Architects | 6,225,112 |
10 | Cooper Carry | 5,708,482 |
11 | Kohn Pedersen Fox Associates | 5,280,000 |
12 | Ziegler Cooper Architects | 4,853,598 |
13 | Harley Ellis Devereaux | 4,800,000 |
14 | PGAL | 4,607,900 |
15 | OZ Architecture | 4,104,475 |
16 | GBBN Architects | 3,700,000 |
17 | Smallwood, Reynolds, Stewart, Stewart & Associates | 3,605,928 |
18 | VOA Associates | 3,367,000 |
19 | Carrier Johnson + CULTURE | 3,324,072 |
20 | Skidmore, Owings & Merrill | 3,074,000 |
21 | Gensler | 2,800,000 |
22 | Rule Joy Trammell + Rubio | 2,600,000 |
23 | FXFOWLE Architects | 2,399,900 |
24 | HKS | 2,398,926 |
25 | Mithun | 1,906,000 |
TOP 25 MULTIFAMILY SECTOR ENGINEERING FIRMS
Rank | Company | 2011 Multifamily Sector Revenue ($) |
1 | STV | 119,671,000 |
2 | AECOM Technology Corp. | 36,000,000 |
3 | Parsons Brinckerhoff | 32,800,000 |
4 | URS Corp. | 28,500,000 |
5 | Michael Baker Jr., Inc. | 23,620,000 |
6 | WSP USA | 17,200,000 |
7 | Jacobs | 16,000,000 |
8 | Atkins North America | 15,368,901 |
9 | Wiss, Janney, Elstner Associates | 14,372,000 |
10 | KPFF Consulting Engineers | 12,000,000 |
11 | Simpson Gumpertz & Heger | 9,740,000 |
12 | Thornton Tomasetti | 7,610,000 |
13 | Stantec | 6,345,000 |
14 | Clark Nexsen | 5,308,534 |
15 | Arup | 4,600,161 |
16 | Coffman Engineers | 4,000,000 |
17 | Magnusson Klemencic Associates | 3,556,559 |
18 | Rolf Jensen & Associates | 2,600,000 |
19 | Aon Fire Protection Engineering | 2,250,000 |
20 | Smith Seckman Reid | 2,227,000 |
21 | Paulus, Sokolowski and Sartor | 1,800,000 |
22 | Science Applications International Corp. | 1,530,000 |
23 | Lilker Associates Consulting Engineers | 1,500,000 |
24 | French & Parrello Associates | 1,396,720 |
25 | AKF Group | 1,300,000 |
TOP 25 MULTIFAMILY SECTOR CONSTRUCTION FIRMS
Rank | Company | 2011 Multifamily Sector Revenue ($) |
1 | Lend Lease | 734,160,150 |
2 | Clark Group | 612,803,196 |
3 | Balfour Beatty US | 441,602,518 |
4 | Walsh Group, The | 342,877,063 |
5 | Whiting-Turner Contracting Co., The | 283,477,065 |
6 | Turner Corp., The | 223,410,000 |
7 | Swinerton | 186,340,000 |
8 | Harkins Builders | 180,000,000 |
9 | McShane Co., The | 175,000,000 |
10 | Yates Co., The | 173,900,000 |
11 | PCL Construction Enterprises | 159,105,415 |
12 | Bernards | 144,000,000 |
13 | Paric Corp. | 138,000,000 |
14 | Hensel Phelps Construction Co. | 137,700,000 |
15 | Weis Builders | 131,960,000 |
16 | CORE Construction | 125,513,227 |
17 | Suffolk Construction | 111,885,268 |
18 | Power Construction | 106,000,000 |
19 | Weitz Company., The | 82,000,000 |
20 | Austin Industries | 77,074,905 |
21 | Brasfield & Gorrie | 67,682,938 |
22 | Absher Construction | 61,807,647 |
23 | James McHugh Construction | 54,624,665 |
24 | Bette Co., The | 54,000,000 |
25 | Choate Construction Co. | 51,875,781 |
Related Stories
Architects | Jul 19, 2022
Perkins Eastman Bolsters Its Dallas Studio with 5 Dynamic New Principals
Seasoned staff bring talent, experience, and enthusiasm to expand firm.
Energy-Efficient Design | Jul 19, 2022
All is not lost: 3 ways architects can respond to the Supreme Court’s EPA ruling
The U.S. Supreme Court’s ruling to limit the Environmental Protection Agency’s power to regulate greenhouse gas (GHG) emissions from power plants dealt a significant blow to our ability to fight the climate crisis with federal policy.
Office Buildings | Jul 19, 2022
Austin adaptive reuse project transforms warehouse site into indoor-outdoor creative office building
Fifth and Tillery, an adaptive reuse project, has revitalized a post-industrial site in East Austin, Texas.
Women in Design+Construction | Jul 18, 2022
Registration is open for BD+C's 2022 Women in Design+Construction Conference
Join your AEC industry peers in Chicago, September 26-28, 2022, for the 7th annual Women in Design+Construction Conference, hosted by the BD+C editorial team and the 35-person WIDC Advisory Board.
Airports | Jul 18, 2022
FAA will award nearly $1 billion for airport projects
The Federal Aviation Administration (FAA) will award nearly $1 billion to 85 airports of all sizes across the country to improve terminals.
Building Team | Jul 18, 2022
Understanding the growing design-build market
FMI’s new analysis of the design-build market forecast for the next fives years shows that this delivery method will continue to grow, despite challenges from the COVID-19 pandemic.
Mixed-Use | Jul 18, 2022
Mixed-use development outside Prague uses a material made from leftover bricks
Outside Prague, the Sugar Factory, a mixed-used residential development with public space, marks the largest project to use the sustainable material Rebetong.
Building Team | Jul 15, 2022
ABC: Construction materials prices increased in June, up 20% from a year ago
Construction input prices increased 1.9% in June compared to the previous month, according to an Associated Builders and Contractors analysis of U.S. Bureau of Labor Statistics’ Producer Price Index data released today.
Arenas | Jul 15, 2022
U. of Oregon renovation aims for ‘finest track and field facility in the world’
The renovation of the University of Oregon’s Hayward Field had the goal of creating the “finest track and field facility in the world.”
Building Team | Jul 14, 2022
ABC’s construction backlog inches lower in June; Contractor confidence falters
Associated Builders and Contractors reports today that its Construction Backlog Indicator fell 0.1 months in June and stands at 8.9 months, according to an ABC member survey conducted June 21 to July 5.