Just the PeaksThis newsletter at a glance
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Here’s how to bring the best of urban living to suburbia and beyond
As millions of U.S. jobs remain vacant, experts predict the multifamily housing market to run strong through 2022. Not only are investors earning high return on investment, but people are also seeking rentals for their all-around convenience.
Some individuals have found themselves changing jobs or moving their families due to the pandemic. Others simply want a good location and walkability. And for people who lost income over the past year, downsizing is the first step to financial recovery.
No matter their motivation, owners are loving the outlook: rent prices are up, vacancies are down. The only problem? America’s primary cities are running out of inventory. New multifamily projects are now spilling into the suburbs.
Real estate: really full
“In just about any metro area in the U.S., investors, developers, and builders are scrambling to keep pace with the surging demand for multifamily housing,” says John Caulfield of Building Design + Construction. “Especially rental apartments.”
Although years in the making, this upward trend has only been strengthened by the aftermath of the coronavirus pandemic.
“Throughout 2020, many renters were able to benefit from price reductions or even months of free rent as landlords struggled to fill empty units,” writes Alicia Adamczyk for CNBC’s Make It newsletter. “But those concessions are more or less gone, and landlords are hiking up prices as Covid-19 restrictions end and housing demand spikes.”
Staying on target
Research shows that rentals attract virtually every demographic. Still, the latest multifamily products are drawing interest from two types of households: millennials (mostly in their 30s) and empty nesters (ages 55 to 65). Called ‘renters by choice,’ these groups are the main target of the country’s top multifamily developers.
So, what connects these eager tenants?
“The desire for a low-maintenance, urban—or at least walkable—experience, enhanced by amenities and technology that create a communal live-work-play nirvana,” says Caulfield. We typically see such properties in places like New York, Boston, and San Francisco, but they’re also cropping up in quieter locations outside the city. Apartments and condominiums are landing occupants before construction has even finished.
To capitalize on the current situation, suburban investors should take a few cues from their fast-paced counterparts. Even if your building is far outside the city’s limits, incorporate a few ‘urban’ features for surefire rental success.
1. Aim for walkability
Urban designs don’t always work in the suburbs due to the problem of space. Yes—too much space is a burden when would-be renters want the convenience of mass transit. If you’re not centrally located or close to a train station, think outside the box.
You can give renters the feeling of proximity by accommodating their transportation preferences. Use paved walkways to connect adjacent buildings. Make sure the perimeter of the property has plenty of usable sidewalk. Trim hedges and trees that block existing paths. And don’t forget to offer storage for bicycles, scooters, and other vehicles beyond the parking lot.
2. Push a theme
When cultivating a community in suburbia, it’s good to consider what features will appeal to certain residents. For example, some people prefer living near public transit; others enjoy the hustle and bustle of downtown life.
Whatever their preference, craft an environment that will feel like home, then create a marketing campaign that unifies potential tenants around their ideal lifestyle.
3. Create an artificial buzz
City appeal really boils down to a certain ‘bustle’ you can’t possibly replicate in farmland, USA. But even if your property is out in the boondocks, you can give the impression of activity and excitement through careful design.
To avoid that ‘ghost town’ feel, hire someone to always greet tenants in the lobby. If your complex has a clubhouse, organize weekly parties and get-togethers. You can also transform an unused entrance or vestibule into a coffee bar where renters may run into each other each morning.
4. Splurge on tech
People perceive the city as a place of innovation. Even the crummiest apartments offer the promise of cutting-edge tech (although it may be found in the Apple store down the block). To compete, suburban owners should concentrate on tech upgrades.
Incorporate USB power and install outlets on the wall so tenants can hang flatscreens. In your lobby or shared spaces, project your building’s name, logo, weather, and announcements on digital displays. Provide Wi-Fi as a paid service. Finally, don’t forget the latest smart integrations if they’re in the budget.
5. Make entertaining easy
When people move from the city to the suburbs, they mourn many things. Now that everything revolves around ‘home,’ they find it more difficult to make friends. A desirable apartment building is one that enables entertaining while assuring renters there are things to do and people to meet.
During renovations or development of your multifamily, put special emphasis on the kitchen. Dedicate extra square footage for incorporating an island and generous dining space in each unit. You can also take advantage of rooftops, terraces, and outdoor gardens for community use.
Everest says: take the city with you