Greystar Rolls Out Workforce Housing Brand With Capped Rent Growth Model
Greystar Real Estate Partners has launched a new brand of workforce housing, Ltd. By Greystar, which the company characterizes as “attainable [for] key populations affected by the lack of rental housing in the United States.”
Though there isn't a legal definition for the term, the term workforce housing is most commonly used for households with incomes between 80% and 120% of area median income, according to The Brookings Institution.
The Charleston, South Carolina-based developer, which also has interests in logistics and life sciences assets, says that rents at its Ltd. By Greystar developments won't increase annually more than the consumer price index or 3%, whichever is greater. As of April, the annualized increase in the CPI was 4.9%.
Greystar didn't release rent numbers for its Ltd. properties, but the available units at the company's property at 12806 Buffalo Speedway in Houston, called Med Center, which is marketed under the new brand, lease for between roughly $1K and $1.1K per month for a one-bedroom and $1.4K per month for two-bedroom units.
To facilitate these rent levels, Greystar recently opened a modular construction factory called Modern Living Solutions, which will focus on building off-site, prefabricated modular apartments for the Ltd. brand. The properties will include various common amenities, such as pools and gyms, and high-speed internet and smart locks for the units.
Besides Med Center, Greystar says it will develop four other Ltd. projects, with about 1,600 units planned to deliver in the next 18 months.
Other developers, seeing the demand for workforce housing, are ramping up their efforts in the sector as well.
Hillpointe, which develops workforce housing in the Sun Belt, has closed Hillpointe Workforce Housing Partnership IV at its hard cap of $510M. The fund is expected to facilitate the development of the next 25 to 30 workforce housing projects in Hillpointe’s pipeline, representing approximately $1.4B of total asset value and 8,000 workforce housing units.
“Over the past two years, our ability to control construction costs has differentiated us from our competitors,” Hillpointe Managing Partner Kelly Mahoney said in a statement. “We have a wealth of great sites in our pipeline, our construction process is streamlined, and our supply chain has been optimized ... we are well positioned to execute on our forward pipeline of 25 to 30 workforce housing projects.”