Some Multifamily Cornerstones Transcend Generations And Submarkets
Creating a community within a multifamily project has intrinsic benefits for residents, and it helps the owner’s bottom line.
When Berkshire Communities enlisted the help of consulting firm Bain and Co. a few years ago, Berkshire learned residents who moved to one of their projects because of location or the community itself were willing to stay 36 months compared to 24 months, and were willing to pay 5% higher rent upon re-signing.
After that, the community parties Berkshire had considered cutting from its budget became more important as a tool to build community, Senior Vice President Emily Watson said at Bisnow’s Big Annual Multifamily event in Dallas Wednesday.
The case for creating a community can be made for any multifamily property, but community looks different for various generations, locations and income levels.
Drever Capital Management primarily deals in Class-B projects, except for its Downtown Dallas historic redevelopment at The Drever. Drever CEO Frank Marro said the company wants to create that resort-style feel, but residents of workforce housing are more sensitive to economics. Drever tries to strike a balance of providing quality amenities — like a killer pool — while remaining affordable.
That desire for resort-style living is not new to this generation or cycle, but today that translates into fine finishes, high-end clubhouses and a great pool, Watson said.
ON Collaborative powered by Coldwell Banker’s David Wolf said millennials and baby boomers value the same things. They want public places to connect with other residents, and they want to be able to make their space as private as possible as quickly as possible, Wolf said.
Those public spaces look different across generations. Greystar has ramped up its presence in the active adult space, and Executive Director Stacy Hunt said it is interesting to compare the demands of the residents in both traditional vs. active adult projects.
Clubhouses in Greystar’s active adult communities can be up to double the size of a clubhouse in traditional garden-style properties because residents want to congregate there, Hunt said. Those older residents are often looking for a smaller community, but larger unit size.
What creates a community is more based on the age of the residents than it is based on suburban or urban location, Marro said, but amenities that facilitate a sense of community translate differently in suburban and urban projects.
Nearby food and bike amenities are more important in urban projects, Watson said.
In the suburbs, Greystar likes sites at or near town centers with some amount of walkability and a mix of ages.
“Turnover is the bane of our existence,” Hunt said. Greystar looks for sites that have more than just highway access to make them appealing.
Wolf is closely watching millennials who are aging out of the urban core to start families. Those that want a big family are most drawn to suburban projects with a town center and a train that goes to the core and retains some feeling of urban life, Wolf said.
What happens as millennials age is still largely unanswered, as the youngest millennials were born in 2000. Hunt is watching the ones who love living in the urban core to see if they will choose luxury for-sale product in the core as they age, or choose to rent in the suburbs.
From a demand standpoint, Wolf thinks millennials believe in owning real estate more than any other generation. But for a multitude of reasons (lack of supply and affordability, to name a couple), the generation is still renting. Wolf is starting to experience more demand for for-sale product from consumers, developers and lenders.
In the meantime, rental product will try to fill the neighborhood void by creating a sense of community within it.