If you’re looking to attract more of the 18-35 crowd dominating demand for apartment rentals today, here is some advice.
Millennials are used to being able to do just about everything with the click of a button, and the correlation between an apartment community’s web presence and that community’s popularity with millennials is undeniable. Develop and maintain an attractive web page, make it possible to apply for an apartment and pay rent online, and manage social media accounts for your communities if you want to have a hope of recruiting and retaining more millennial residents.
Champion the Environment
Millennials care about sustainability. They want low-flow plumbing fixtures, compact fluorescent or LED lights, programmable thermostats, and energy-efficient appliances. Show prospective residents that you are a proud steward of environmental sustainability, and your apartment’s appeal to millennials will likely rise.
Focus on Community
Most millennials hardly remember a world without internet, and have carried a mobile phone in their pockets for at least half their lives. Millennials are used to and, in some ways, dependent on virtual communication. But they’re increasingly aware of this dependency, and value in-person community as a result. Pay attention to detail when designing community spaces. Give residents the opportunity to lead and attend yoga and pilates classes in your fitness centers. Host engaging community events. And use your website and social media channels to promote them.
Millennials have the capacity to mystify older generations, but leave no mystery as to what they want. Designer finishes, pet-friendly amenities, bicycle workspace and parking, fully wired communities, and charging outlets with USB ports are a few of the amenities millennials care about. Tailor your amenities to cater to millennials, and millennials will follow.
Younger adults have always constituted a large share of apartment demand, but millennials are even more drawn to apartments than their parents and grandparents were. To capitalize on this trend and make your apartment attractive to the millennial generation who can keep your occupancy rate high, work with a multifamily contractor who is committed to quality and will work to make your vision a reality.
Micro-units, self-contained apartments measuring between 150 and 500 square feet, are springing up in urban centers of cities like Dallas, New York, and Seattle. Here is some information to help you understand what classifies as a micro apartment, why micro apartments are growing in popularity, and whether a micro unit is for you.
What is a micro apartment unit?
Several definitions for the micro apartment can be found online. They vary slightly, but more or less all stipulate that a micro unit must:
What’s driving the micro unit movement?
For most millennials, the dream of homeownership has fallen to the wayside. Members of this much talked about generation are increasingly demonstrating that they value experiences over things. They would rather live close to the cultural opportunities a city provides than have space to collect and store belongings. Whereas a baby boomer might look at a 250 square foot space without a full kitchen or even a single bedroom as “no apartment,” a millennial might see it as a perfectly suitable space to call home for the next several years. With urban land selling and renting at high prices, micro apartment units present an affordable downtown living option.
Can a micro apartment be livable?
This, as illuminated in the example of the millennial and baby boomer above, is a matter of perspective. Micro units are small, but encourage residents to spend time in community spaces and outside of the apartment as well. Provided a resident does little more than decompress and sleep in his or her unit, concerns about adverse psychological effects seem unwarranted. A well-designed, well-laid out micro unit, viewed in the context of the community to which it belongs, can provide an urban dweller with everything he or she needs to live a vibrant home life.
Another point to consider when trying to answer this question is the extent to which micro units vary. In Dallas, where space is less of an issue than it is in New York City or San Francisco, micro apartment tend to be closer to 500 square feet than 150 square feet. While unable to satisfy some definitions of the micro unit, these apartments sometimes have a separate bedroom.
With urban space at a premium and demand for prime city living space high, micro apartments are a logical addition to the rental options apartment dwellers have. If you own, manage, or develop multifamily residential properties and are eyeing prime real estate that’s too small to construct many full-size apartments, consider the micro apartment model.
For the last several years, virtually all major real estate markets (and most submarkets) have experienced a healthy and sustained boom in multifamily development. History suggests this boom is due to draw to a close soon. Consumer and demographic trends suggest otherwise. Here, we explore some of the trends that may keep the multifamily boom going strong for a while yet.
In most parts of the country, apartment rents are still rising steadily. In the past, steadily declining rents have preceded the scaling back of multifamily development.
Low Vacancy Rates
Cities that have seen the most dramatic increases in multifamily construction rates, like Dallas, still have remarkably low vacancy rates. This suggests there is still considerable demand for new units.
Rock Bottom First-Time Home Sales
According to the National Association of Realtors, the annual share of first-time home buyers in 2015 was at a three-decade low. High home prices and mortgage rates deter would-be buyers, who choose to rent houses or apartments instead.
Another probable contributor to last year’s low first-time home buying rate is the millennial generation’s preference for apartment living. Millennials are aging, accumulating wealth, and voting in droves to live in urban apartments rather than suburban houses. As long as this trend is not bucked, demand for multifamily units should remain high. An increasing number of Baby Boomers are choosing to move from single-family homes to multifamily communities as well.
The current apartment boom cannot be sustained forever, but it may have a lot of life left. If you live in a city with low vacancy rates and rising apartment rents, capitalize on these market trends by developing that apartment community you’ve been thinking about. Just be sure to choose a multifamily contractor with the experience and knowhow needed to make it great!
Consumers want to live greener, healthier lifestyles. Contractors and developers are growing increasingly keen on championing environmental stewardship. Materials producers are investing more in the research and development of sustainable building materials. These three forces, working together, have resulted in the proliferation of both the availability and use of eco-friendly materials in building construction.
Carbon-Negative Cement Alternative
Cement is cheap, durable, and stylistically adaptable. It also leaves a seriously heavy carbon footprint. Ferrock, a green alternative found to be five times as strong as Portland cement, is eco-friendly from the time it is manufactured until it is applied on site.
More than 65 tons of scrap steel are recycled every year, the bulk of which comes from old automobiles. Recycling steel requires relatively little energy and saves landfill space. When used in place of wood beams, which are less-resistant to the powerful forces of Mother Nature, recycled steel also saves a lot of trees.
Recycled Composite Lumber
When using wood in construction projects, the most environmentally responsible way is to use composite lumber made from recycled wood and plastic. Available in a range of shades and designs that emulate real types of wood, recycled lumber is exceptionally strong and durable. It is also more resistant to mold and rot than treated wood.
Low-emissivity glass keeps heat from entering a building in the summer and escaping in the winter. Low-E glass costs only slightly more than traditional storm windows, and can reduce heat lost through glass by as much as 50%.
San Diego-based Malama Composites was one of the first movers to enter the plant-based polyurethane rigid foam game. Today, the company’s plant-based foam insulation acts as an effective insulator against moisture and heat, boasting a higher R-value than fiberglass or polystyrene. The plant-based insulation, made from bamboo, hemp, and kelp, is also excellent for the acoustics of a room.
Plastic is not exactly the darling of the environmentalist movement. But we’ve produced a lot of the stuff, and we might as well recycle it. EcoStar carries sustainable roofing tiles made from 80% recycled plastic and rubber. Plastic Lumber Yard, another roofing manufacturer, makes plastic roofing slates from recycled materials that are themselves recyclable.
Sustainable building materials will be at the heart of research and development in the construction industry for years to come. Some day, it may even be the norm for buildings to be constructed of virtually 100% recycled or repurposed materials. In the meantime, there are plenty of ways for you to demonstrate your commitment to environmental stewardship in the projects you take on.
Residents of the most modern and luxurious apartment communities live such comfortable and convenient lives that even mansion dwellers could be forgiven for envying them. As innovations in construction and technology are incorporated into newly constructed and renovated buildings, the bar on what apartment hunters can reasonably expect from the communities they consider rises. Here are a few rewarding amenities we’re seeing more and more in new apartment communities.
The field of home automation is bustling with innovation and development, and it’s not just homeowners who covet this technology. Dozens of smart gadgets, as well as home automation control systems, can be installed manually in your apartment. Smart thermostats are the first smart device to appear en masse in new apartment communities. We’re on the lookout for more smart technology, including washers and dryers.
Package Delivery Lockers
One popular apartment amenity that benefits both management staff and tenants is the electronic package delivery system. The solution to virtually all package-related woes, electronic delivery lockers eliminate the need for management staff to act as middlemen between delivery couriers and package recipients. They also enable residents to securely retrieve their packages 24/7. Parcel Pending, a total package management solution provider, offers pricing and revenue-sharing options that make investing in the equipment and technology affordable.
The growth of “resort-style living” communities for apartment dwellers and retirees has been one of the most popular multifamily residential trends over the past few years. One resort-style amenity that almost every apartment hunter in the North Texas area seeks is a lavish community swimming pool. Features such as a built-in sun shelf and poolside cabanas make a multifamily residential community stand out against one with a run-of-the-mill pool.
In order for your community’s fitness center to be a selling point to apartment hunters in the area, it better have long hours and a selection of the latest and greatest exercise equipment. Attachable TVs, yoga and pilates rooms, and 24/7 hours are some of the features that can make prospective residents view your fitness studio a viable alternative to a monthly gym membership.
What was once unthinkable for most apartment dwellers now seems almost mainstream. Pet-friendly apartments can be found across the country now, and many communities have amenities designed specifically with pets in mind. Dog parks, pet runs, and grooming facilities can have a magnetic pull on a loving pet owner.
100 years ago, half of the country’s population lived in rural areas. Today, more than 80% of Americans live in cities. We’re employed in different industrial sectors than we once were. And robots have rendered unnecessary tasks that once required human labor or knowledge. Let’s take a look at how these facts of American work life and other broad movements drive trends in commercial development.
Even More Urban Development
With four of every five Americans already living in urban areas, we don’t expect another dramatic farm-to-city migration. As two of the largest generations, baby boomers and millennials, seek access to city amenities at an ever-increasing rate, steady urban growth is expected to continue. This is a trend we’re also noticing in suburban areas, where mixed-use developments are growing in popularity, building up is cooler than building out, and public transportation links to city centers are in high demand.
Office, retail, multifamily, hotel, and special-purpose ventures all vie for centrally located urban land, driving up prices and the pressure to use space efficiently. Brick-and-mortar retail spaces hurt by the growth of e-commerce sales are experiencing a squeeze, while luxury communities and tech firms move into or build over recently vacated space. Another type of development gaining urban ground is live/work space.
Growing Role of Technology
Technology is changing the way general contractors build, as well as the layout of commercial spaces. Some startups are designing workspaces to revolve around the technology that drives their business. Others are favoring open floor plans that encourage productivity and increase accountability in the workplace.
Last, we’re continuing to see a shift in the materials used in new construction projects. Recycled and renewable materials, ranging from steel to straw, are more readily available and widely used than they were just a few years ago. The U.S. Green Building Council’s LEED certification program provides incentives for sustainable development. Already, 70,000 LEED-certified projects have been completed. The WELL Building Standard, a new measure designed to promote the health and well-being of building occupants, should spur even more eco-friendly renovations and constructions.
This is an interesting moment in the evolution of commercial construction. Keep your eyes peeled for these and other changes you notice!
2015 was a banner year for multifamily development in Dallas. At any given time, a dozen or more high-rise units were in the works somewhere in the metroplex. Many smaller apartment communities cropped up between Fort Worth and Plano during the calendar year.
Unprecedented in Scale
Exceeding even the real estate boom of the 1980s, the pace of development in the apartment market has increased by nearly 300% since 2005. As New Year 2016 rolled around, nearly 40,000 units were under construction.
Why the Boom?
From office and industrial construction to preowned home sales, the North Texas real estate market at large is booming. The biggest driver of this development is population growth. The area’s population has surged by around 130,000 annually for the past several years. The exceptional growth in the multifamily sector has benefited in particular from large numbers of young professionals not yet ready or less interested in the responsibility of home ownership. Empty nesters looking to downsize and move closer to an urban center also spur the boom.
Looking to the Future
Market analysts suspect that market growth in this cycle peaked in 2015, after five years of rapidly increasing growth. While it is likely that fewer big multifamily development contracts will be drawn up in 2016 than in 2015, steady population and jobs growth should keep demand for new multifamily units high.
It’s a great time to be involved in North Texas real estate. New apartments are increasingly amenable, and apartment hunters have more variety to choose from than ever. It will be interesting to see how much more the DFW cityscape changes as a result of development over the next few years.
The student housing sector has had great momentum over the last few years as it has seen record breaking construction and occupancy numbers. With another big year behind us and a new year ahead of us, we are looking into what made the 2015 student housing sector successful and what’s ahead for 2016.
A college education is becoming increasingly important, therefore enrollment is growing by the thousands adding a significant increase in housing demand. Larger universities are experiencing high enrollment numbers but not enough supply for incoming students. Furthermore, universities that require first year students to reside in on-campus housing have been averaging a 104% occupancy in 2015.
With the flood of student housing starts in 2015, developers really amped up the standard amenity package. Student housing communities are fulfilling students’ active and social lifestyles with enhanced fitness centers complete with pilates and spin rooms, game rooms equipped with gaming systems and big screen TVs, as well as study areas with high speed internet and brand new technology. Because developers delivered a product that didn’t previously exist, the new units were easily and quickly absorbed over 2015.
As 2015 ended on a high note for student housing, the new year brings big promises for a busy and successful 2016. Even more students are expected to enroll this year. Axiometrics is forecasting an increase of over 200,000 new students for Fall 2016. This will help balance the supply and demand and support the strong rent growth we have seen over the last year. An additional 38,000 new student housing beds are expected to hit the market Fall 2016 to house the flood of new students, and that number is likely to grow over the next 12 months.