November 24, 2014

The Cyber Monday Package Problem

Forget Black Friday, it's Cyber Monday that really gets renters jazzed up. (It's also easier than getting trampled at the door of a Walmart.) Last year's e-commerce sales on the big day totaled $2.3B, but how do you get the goods to 37M renters?

Package volume at a typical apartment community nearly doubles during the holidays (and communities receiving 300-plus packages/week triples), National Multifamily Housing Council VP Rick Haughey tells us, citing a recent NMHC/Kingsley Associates survey. In fact, one community manager recently told Rick she's Facebook friends with her UPS driver because they see each other so much, and her management office becomes almost impassable with packages during the holidays. Of the buildings that have package lockers, half say capacity can't handle this increased volume, Rick says, while a quarter of survey respondents now employ package tracking software to efficiently notify residents.

Other big challenges: cost and time commitment (community managers have other things on their to-do lists), he tells us. Security is also a big concern, so about 90% of surveyed communities accept packages on behalf of residents. A 2013 survey even reported package holding areas as the second-most desired amenity next to fitness centers, Rick says. E-commerce today is only 6% of all retail sales (Americans will spend $300B online this year), meaning these shopping trends will only grow, forcing apartment owners to react before their management offices overflow. In the future, providing 24-hour self-service options with adequate capacity to handle packages may be apartments' biggest differentiator, Rick predicts.

What are your creative package strategies? Tell marissa.oberlander@bisnow.com

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DC: Thank Millennials for Shrinking Units

One of Millennials' biggest impacts is smaller residential units, since the younger population is more focused on amenities outside of their apartments and spending less time in their units, JBG principal Andy VanHorn (snapped at our Arlington County Summit) tells us. They'll pay less rent for that smaller space, forcing developers to think more like NY-style apartments. (That means you need to get Scorsese to direct your building tour videos.)

Penzance SVP Andrew McIntyre says Millennials aren't willing to pay high rents ($2,000) for studios and one bedrooms. But they are willing to walk everywhere, which is why Arlington has attracted so many. Residential and office buildings also need to offer those who bike easier ways to get their bikes in and out of buildings. (Ever tried getting one up 20 flights of stairs?) He says residential buildings require strong rooftop options where developers can create a hospitality type of experience.

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NYC: Five Unexpected Apartment
Building Amenities

Health clubs, screening rooms, communal party spaces...Ho hum! It takes more unique amenities to lure tenants into today's luxury NYC rental apartments. Here are five examples:

1) A Rock Climbing Wall like the two-story model at 10 Hanover Square in lower Manhattan's Financial District. Located in the building's state-of-the-art (of course) health club, the wall pictured here features several climbs of varying difficulty.

2) A Golf Simulator - For those who've mastered the putting green, it's time to focus on your drivers and irons. Among the rental buildings with simulated golf machines is 25 Broad Street at the Exchange.

3) Wine cellar - Lovers and collectors of the grape need not just store their stash in a home wine cellar. If you're stuck in the city, and your NYC rental unit is more a pied-a-terre, having a well-maintained, climate-controlled wine cellar, like the one at 34 Leonard, in TriBeCa, can make an enjoyable and tasty difference.

4) Food Shopping - Fresh Direct is great. But there are other people who will actually do your grocery shopping for you, and they're right under your own roof – if you live at places like The Biltmore, in Midtown West.

5) Catering Kitchen - When your party or dinner guests demand the best, and you have no time to prepare, a catering kitchen like the one at MiMa in Midtown Manhattan lets you relax and truly enjoy the fine art of entertaining.

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SAN ANTONIO: The Appeal of Center City

San Antonio's Broadway Corridor is showing statewide and national appeal: About 80% of residents are moving in from outside of the center city, and half are from out of town, according to Embrey Partners EVP Robert Hunt (snapped with KMD's Marshall Davidson). It's been one of San Antonio's most dominant multifamily submarkets in recent years, with demand outstripping supply and fantastic rents, according to panelists at Bisnow's San Antonio State of the Market event, and occupancy stats of Broadway multifamily properties are especially impressive when you consider pricing. San Antonio Commercial Advisors CEO Ed Cross says San Antonio has a disproportionately small amount of residents who can afford top-tier apartments. He believes there's unlimited demand for one-bedroom units at $1k, but most central city projects are over that.

Silver Ventures managing director Bill Shown and Robert (here with Zurich International Properties' Josef Seiterle) both stressed the importance of incentives to the development of center city multifamily. Bill says it's very different, complex and expensive to build residential Downtown. Embrey used one of the last available cash grants from the City to develop Breckenridge, and Robert agrees some components of central city development will only get done with City encouragement. Clearly Robert did something right at Breckenridge—Bill's daughter moved back to San Antonio a few weeks ago and signed a lease there instead of in his Pearl project (even though Dad was working hard to find her a spot).

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Tell Us

How is your company giving back this holiday season? Send stories and pics to marissa.oberlander@bisnow.com