Just when you thought the only trend in multifamily housing was massive luxury towers piercing the sky, along comes Transwestern with a different view on ways to distinguish itself. We talked with Transwestern Development managing director of multifamily development, Mark Culwell, about his firm's strategy nationwide.
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Transwestern is focusing heavily on building transportation-oriented communities, where major employment centers and amenities are accessible without a car. Mark tells us the company doesn’t take a formulaic approach to building apartments, but pays attention to the underlying trends in a submarket to inform its decision-making—and it's finding demographics in many different parts of the country that enjoy being able to walk to Whole Foods, or jump on the train to get to work instead of spending hours commuting in a car.
One of Transwestern's TODs, The Arnold, is being built on East 6th Street not far from Downtown Austin. It's under construction in a funky, mixed residential/business area. That project will be across the street from the Austin MetroRail’s Plaza Saltillo station. In addition to a residential component, there will also be office space and shared parking with ground-floor retail.
Near Atlanta, a JV between Transwestern and Integral Group is in the very early stages of a light rail redevelopment of the active MARTA-Brookhaven site. Plans call for a development with a park, apartments, retail, office space and condos. It's set to break ground in summer 2017. Additional phases could include senior housing, civic spaces and a hotel; the JV is working with community stakeholders to understand their interests.
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While the Austin and Atlanta developments are more likely to appeal to young professionals, the company's decision to build The Laurel was the really ambitious one. The Laurel features large two- and three-bedroom units, which haven't been in vogue since the 1980s. Snuggled next to Preston Hollow in Dallas, one of the most exclusive neighborhoods in the country, the property is likely to appeal to an affluent demographic looking to downsize and adopt a lock-and-leave lifestyle.
On the opposite end of the spectrum is Transwestern Development's Studio East development, which will feature studio units averaging 400 SF, with the largest unit only 550 SF. The micro-units will be furnished with Murphy beds, dining tables, couches and full-sized appliances.
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Mark wouldn’t say Transwestern Development is directly targeting Millennials with these units, but he points out that demand for them is driven by preference, affordability and convenience. He suspects micro-unit developments will do very well in legacy cities like S.F., NY and Boston, where the cost of housing takes a greater portion of income. But he doesn’t see demand only from young professionals. Potential exists for these units in most major markets where tenants could be right out of college, or retiring.
All the same, you can't talk apartments without talking Millennials; Mark says everyone in the business is trying to understand the group. He says Millennials want a sense of community, have a lesser desire to own stuff, and are happy with smaller properties. They do want a variety of gathering places though, like the ones that Transwestern Development has created at Studio East. Mark says even in designing for Millennials, you have to be sensitive to the underlying trends. A pool might be less important but wireless speakers in the units are crucial.
Going forward, the company plans to focus on a handful of the 34 markets where Transwestern already has a footprint. Mark tells us they want to be careful not to overbuild, and because jobs drive multifamily demand, they’re looking for places with steady, long-term job growth.
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