CREJ - Multifamily Properties Quarterly - October 2015
A concierge, pet spas, bowling alleys, rooftop pools, barre studios and drop-in workstations: Although these may sound like the features of a luxury resort, this is actually the new reality for many recently built multifamily communities. Gone are the days when having a washer and dryer in your unit is considered a viable differentiator to market to potential tenants. However, in the increasingly competitive apartment market, one of the most desirable amenities is more efficient to deliver than developers may think. With the rise of rental demand over the last five years, the school of thought in many markets is centered on delivering a mega-product that creates a community within the complex laden with extravagant amenities. Although fun in theory, this requires larger infill sites and increased developer investment, and it swells already record-high rental rates. However, as we’ve experienced, there’s a second school of thought in which developers can be competitive in this landscape without joining the so-called amenities war. There is a sweet spot for the development of smaller apartment buildings that add to the surrounding neighborhood rather than create it. In the past five years, we’ve delivered six projects centered on this philosophy. Each building was developed on a smaller urban infill site, close to mass transit and under 100 units. The most important amenity for these tenants? Living in the heart of a flourishing downtown area. With the ongoing investment municipalities are making in creating thriving urban areas rich with eat, shop and play options, there is a lessening need for multifamily communities to deliver on all of these fronts. When you root a living experience in the midst of an established and vibrant community, you decrease the necessity to create that community. Rather than tying tenants to the offerings of their specific building, the tenants are given the opportunity to enjoy the surrounding amenities and culture of their city. In following this approach, developers can make better use of urban land supplies and existing infrastructure. This allows for strong infill redevelopment with less potential barriers on site size and parcel configuration and more focus on functional form. This philosophy supports the development of land that would otherwise be restrictive and, even more so, supports the businesses and culture of these urban areas. When we provide the “live” element, businesses then get the advantage of residents stimulating the eat, shop and play options they are providing. From 2011 to 2014, we worked closely with the city of Loveland and the Loveland Urban Renewal Authority to deliver The Gallery Flats, a 66,000-square-foot, 66-unit, 100-bed apartment in the center of downtown Loveland. This project was the first catalyst of a larger plan to enhance the vitality of the downtown culture while creating an urban living option for residents. With its completion, more citizens can live the downtown lifestyle and businesses received an automatic boost from the newfound customer base living at their doorstep. “The city of Loveland had a vision to revitalize our downtown through the creation of a project that supported a walkable and vibrant lifestyle,” said Cecil Gutierrez, the mayor of Loveland. “To achieve this, we were committed to finding a high-quality developer to serve as a partner to bring this vision to life. Through the efforts of the city, Urban Renewal Authority and Brinkman Partners, the end product did just that. The Gallery Flats has created a high-density redevelopment that enhances the downtown culture through an active urbanism that stimulates the existing dining, shopping and art economies.” In today’s rental market, there is room for both schools of thought; it’s up to developers to decide in which arena they can be most successful. There’s still a healthy market of residents seeking larger, amenity-driven complexes. On the flipside, there also is a strong pool of renters who want to take advantage of the amenities that they can see right outside their window.