Millennials are shaping multifamily developments in a way that few generations have before, and doing so in surprising ways, Transwestern’s multifamily managing director Mark Culwell tells us. Before Mark speaks at Bisnow’s all-day regional multifamily event on July 21, we chatted about what he's seeing in the market.
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With so much pressure on land and construction costs, developers are scrutinizing both the scale and type of amenities in new multifamily developments. In DFW, a pool might be important—but the size isn’t as important as it has been in previous years. Instead, the deck, gathering places, outdoor kitchens and shade structures are the things that sell, Mark tells us.
There is an overall de-emphasis on a central indoor gathering place, Mark tells us. Millennials want places for smaller intimate groups. They also need work-from-home spaces, and central office spaces instead of a musty old "business center." They want places where they can hold meetings and take calls, not just use the printer.
With so much pressure on land and construction costs, developers are scrutinizing both the scale and type of amenities in new multifamily developments. In DFW, a pool might be important—but the size isn’t as important as it has been in previous years. Instead, the deck, gathering places, outdoor kitchens and shade structures are the things that sell, Mark tells us.
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Other must-haves include adequate parking. Mark tells us it costs about $18k per space for structured parking, which drives up rent. So developers have to think about how many spaces are appropriate for the development, especially when considering the proliferating shared-economy services like Uber and Lyft.
Affordability has to be considered on both sides of the equation, Mark says. Higher land and entitlement costs require higher density and the apparent solution is to build taller. But that cost is higher and requires higher rents, but rents are growing much faster than personal incomes, Mark says.
Micro-units might not be the panacea some were hoping for. Mark explains micro-units drive the cost-per-unit higher as the kitchen and bathroom costs—including appliances and plumbing fixtures—are spread over a smaller area.
Hear more from Mark and other experts July 21 in Addison at Bisnow's Annual Multifamily Conference South—it's an all-day regional conference covering all aspects of the sector. Sign up now.
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