This Season's Hottest Multifamily Stories
We all survived this brutal winter by sticking together, and spring shouldn't be any different (minus the extra layers). Take a look at where and how multifamily bulbs are blooming across the country. It's a time of new neighborhoods, developments, faces, and rents. (But that doesn't mean there won't be April showers.)
NYC: Greenpoint is the new black
Hip without hipsters—like a banana split without the stomachache—is truly the dream. Greenpoint in Brooklyn has become just that, attracting in-the-know families as rents, condo prices, and land prices start to spike. MNS’s Dave Behin tells us Greenpoint is in good shape to absorb the influx of residents, with plenty of grocery stores and neighborhood retail. Rare three-bedroom units are selling like hotcakes (also available at said grocery stores) and land has gone up from $150/buildable SF to $250 in the past 12 months.
PHOENIX: Shot heard ‘round the market
It may take just one project to spur a condo boom, and Deco Communities’ Envy development in Scottsdale could be it. Deco’s Rob Lyles says the $37M, 90-unit project at 4422 N 75th St (above) will target young professionals. (Deco has $14M in equity for the project.) While many Millennials seem to prefer renting, there is a growing desire to own again as well, particularly in popular areas like the well-off Entertainment District. “There are very limited choices in Scottsdale,” he tells us. Deco may be closing on a second condo site within the next month, he adds.
MIAMI: Bienvenido, Latin America
You can thank Lebron. Or the weather. Or reruns of Surfside Six. Miami has evolved into a global city that's attracting buyers from all over the world, especially Latin America, Strategic Properties Group prez Henry Pino tells us. (He’s on the left, above, with Alta Developers CEO Patricio Ureta and principal Raimundo Onetto at the recent groundbreaking of 12-story condo building Le Parc at Brickell.) Despite the condo building boom and rising prices, Miami condos are still considered a value when compared to prices in Latin America or some major US cities (that means you, New York). Most of Le Parc’s buyers hail from Venezuela, Argentina, and Brazil.
CHICAGO: Stop kicking the can
The city and state’s massive debt and pension holes could spell trouble down the road, but the glass is still half full in many ways. The Habitat Co president and CEO Mark Segal (above right, with Mayer Brown partner Ivan Kane and AMLI CEO Greg Mutz) says current rent-to-income ratios give developers more room to increase rents, plus there’s a built-in affordability not being considered. With the latest amenity packages and well-located developments, residents can cut expenses like joining a gym or buying a car and reallocate those dollars to housing. Chicago’s image as a global tech-forward city with strong leadership should do great things for jobs and absorption, Greg adds.
SAN ANTONIO: Never a better time to be a hammer
Multifamily development is seriously impacted by the labor market, we learned at Bisnow’s recent San Antonio Multifamily Summit. Embrey EVP of development John Kirk (above right, with Regions Bank’s Kyle Shaw and Buddy Billings) says labor pricing has been increasing 0.5% per month, and it’s up 48% in the last three years. On top of that, major subs are busy in Houston and Dallas (every market knows that sad second-fiddle feeling), and you have to pay a premium to get them down to San Antonio, John says.
VANCOUVER: Stay tuned for more action
If it wasn’t for a $51M portfolio sale involving the Norgal apartment portfolio in the second half of 2013 (and a $41.5M deal including former Olympic housing, medals included), there would've been very few multifamily deals above $5M in Vancouver. But Avison Young’s Rob Greer sees potential for new investment growth in British Columbia. He blames high land costs for the slog (only condos would work), but that should change with the city’s move to create a rental construction incentive program. It would increase density and remove certain municipal fees tied with new rental construction, Rob says.
ATLANTA: Holy Grail of multifamily rents
We’ve all heard bedtime stories about the mythical $2/SF rent (along with the Gordian Knot and the 12 Labours of Hercules), and TerwilingerPappas could achieve it at its new Solis Downwood development. The firm has underwritten $1.85/SF rents at the $50M, 280-unit luxury apartment complex in an affluent enclave just north of Atlanta, Alan Dean tells us, but $2/SF would be reasonable given its location. Municipality planners didn’t love new multifamily in the area pre-recession, but attitudes and fundamentals have shifted in rentals’ favor. (If you don’t like prevailing opinions, just wait a few minutes.)