Why Modular's the Hottest New Trend in Multifamily Construction
When it comes to multifamily real estate construction, Oakland is hot, non-modular is not, but the price to build is sky high. Our panelists break it down.
1. Modular Is All The Rage
Suffolk Construction president and CEO, West Region Andy Ball is seeing a lot more requests, not just for prefab, but modular. We got the scoop from Andy and some of the top players in the space at Bisnow's Sixth Annual S.F. Multifamily event at Hotel Kabuki last week. The next big trend is Oakland, he says, which is exploding. In two months he's picked up four projects there—"all nice high-rise towers." One of Andy's latest projects is 1900 Broadway, right on the BART in downtown Oakland. Stay tuned this week for Andy's take on the drought.
2. Pumping Up Amenities
Solomon Cordwell Buenz managing principal Chris Pemberton thinks as rents go up, we are going to see more condos. In terms of design, units are smaller and amenities are more robust. Having a more open plan is the way to go, he adds. At 100 Van Ness, for example, units have "buried bedrooms" in which the living room is in the front and the bedroom is buried in the back.
3. Wood Wins
WoodWorks - Wood Products Council senior national director Scott Lockyear explains that his nonprofit helps the design community when using wood for commercial buildings. Over the past five years there's been a trend towards densification and innovation as it relates to wood frame construction; five-story wood frame has become commonplace whereas 10 years ago it wasn’t.
4. Cost Is King
Swinerton CEO Jeffrey Hoopes says one of the biggest trends in multifamily is towards prefabrication. While he counts seven or eight sites up for grabs in Oakland, he thinks the cost of construction is the biggest challenge the industry faces today.
5. Parking Is Shrinking
Panelists say it used to be hard to finance properties that didn't have much parking attached. Now it doesn't make that much sense to provide that much. Chris was chatting with an Uber exec who said cars are used under 5% of the time. The target market is 25 to 30-year-olds who don't even have a driver's license. It's his fantasy to see a huge change in the amount of parking he's providing.
Calvano Development principal Mark Calvano, who moderated, grew up in the Bay Area and says he is aggressively looking for new sites.