Bob Murphy on Why MRP Realty Doesn't Build Micro-Units
DC-based MRP Realty has more than $2.5B of projects in active development right now. And managing principal Bob Murphy has expanded in recent years—the firm now owns three apartment buildings in Philadelphia and an office condo in Manhattan, and he's hungry for more in those markets. He’ll discuss it all at Bisnow’s Annual Multifamily Conference on Dec. 3 at the Walter E. Washington Convention Center in DC.
DC has absorbed tens of thousands of new apartments each of the past two years (it’s on pace to do it again in 2015), and while Bob says there’s some reason to think overbuilding is happening in certain areas, there’s no cause for alarm.
“Leasing is going very well; we have seen rental growth flatten out, but we have good pace in all our projects,” Bob told Bisnow. “It’s very possible that we see some overbuilding in some submarkets. But people have been calling for that for years, and apartments are still leasing.”
One of MRP’s most recently delivered projects, Elevation at Washington Gateway in NoMa (below), leased up its 400 units in less than a year. But this pace can’t continue forever, despite its relentless push so far. “I’m not seeing the slowdown yet,” Bob says, “but eventually, it’ll happen. It’s just logical that certain submarkets will soften a bit.”
Long-term, however, MRP is very bullish with a robust pre-development pipeline including a 1,550-unit, seven building complex in Northeast DC, the biggest residential development in the city.
While MRP started 10 years ago and launched exclusively in DC, the expansion is on. Bob can now take a more macro look at the apartment landscape. “Across the country, everything we are seeing is that multifamily markets are pretty solid, especially urban,” Bob says.
But MRP isn’t jumping on the micro-unit bandwagon just yet. “We’re keeping our average of about 730 SF. We don’t plan on changing that up,” he says. “A small-unit play is always going to be a niche. We talk a lot about unit size and unit mix, and we want to end up with something that’s viable long-term.”
Bob will be on our Executive Outlook panel at Bisnow’s Annual Multifamily Conference this Thursday, Dec. 3, at the Walter E. Washington Convention Center in DC, along with the CEOs of Foulger-Pratt, TruAmerica and the RADCO Cos. Sign up here!