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Everest has six trends that are shaping the multifamily scene in 2022.
If the multifamily market grew over the past decade, it absolutely EXPLODED in recent years! There’s no better time to discover the lucrative world of multifamily investment.
Quarter after quarter, the asset class continues to outperform. More and more commercial investors are discovering the enduring value of apartment buildings, duplexes and triplexes, townhouses, condominiums, and the like.
Over the past year or so, landlords have also commanded significant rent increases. New construction is popping up across America’s cities, then spilling out into suburbia. And multifamily popularity isn’t all one-sided! The influx of people looking to rent is equally impressive.
All in the multifamily
Simply put, multifamily housing is checking all the boxes these days.
“Multifamily buildings provide cost efficiencies for developers by creating additional units per square foot of land, enabling higher returns for investors,” reports CIVE, an upscale design-build firm. “They are easier to build, lease quicker, and often include sustainable living practices. Residents enjoy living in these types of apartments since they are close to shopping, entertainment, and restaurants.”
Sounds like a landlord-tenant win-win!
If you’re new to the game, it’s best to know the basics before exploring the more nuanced trends affecting this asset class. Let’s start with the different kinds of multifamily structures.
Multifamily Building Overview
Size matters (and more!)
Low-rise multifamilies are typically fewer than 4 stories tall, may include elevators, and feature 1 or more separate buildings spread across an area. Examples: townhouses, rowhomes, duplexes, garden-style complexes, subsidized housing.
Mid-rise multifamilies are slightly bigger with 5 to 9 stories, at least 1 elevator, and more amenities such as a gym, common area, or pool. Examples: condominium buildings, college dorms, senior housing, urban apartments.
High-rise multifamilies usually feature 10+ stories, have multiple elevators, and are situated in busy, dense metropolitan locations. Examples: luxury apartments, long-term hotels, college dorms (large universities), and city-funded rental housing.
Mixed-use multifamilies come in many sizes but always have residential units placed on top of retail stores and restaurants, which are at street level.
For a comprehensive guide, visit cive.com
Top takeaways for 2022
Like what you’re reading?
If you’re considering a dive into the multifamily realm, reach out to your trusted Everest team for further guidance. In the meantime, explore the top trends affecting these investments.
5 Multifamily Housing Trends You Need to Know
1. Demand is booming.
As more people are priced out of the single-family market, multifamily housing continues to grow in popularity. Experts say that over the next decade, the trend will continue as younger generations also want the freedom to move often (after the lease is up, of course!).
“Millennials value the flexibility of renting instead of buying,” writes Sarah Kim of ButterflyMX. “Their renting tendencies correlate with their decisions to get married and start a family later in life.”
2. People want virtual tours.
The pandemic may be over, but demand for remote convenience is not! Both renters and property managers benefit from new technology that enables self-guided virtual tours as well as 3D renderings that may be viewed online. Moving forward, this will be the norm.
Kim notes, “The National Multifamily Housing Council found that 17% of prospects said they’d prefer to tour an apartment unit without a leasing agent present.”
3. New technology is a must.
Back in the day, cutting-edge amenities were nice, but not a dealbreaker for prospective residents. Flash forward to today, and property technology is considered a must-have. The smartphone era has ushered in a ton of new conveniences that enhance your multifamily’s desirability—and we’re not just talking about reliable Wi-Fi!
Kim mentions app-based platforms for making rent payments and reserving amenities; video intercoms for screening and welcoming guests; and programs for monitoring and managing package deliveries.
4. Amenity #1? Community.
Renters in 2022 are interested in more than a roof over their heads. Sure, they like nice sparkly things, but they also crave a sense of community among neighbors. For multifamily operators, this means creating a sense of culture reflected in both your marketing and in real life.
“An NMHC/Kingsley apartment renter preference report showed that 60% of residents indicated their living space reflects their identity,” says Kim. “You can facilitate community bonding within your property by organizing meaningful resident events…which in turn boosts resident satisfaction and retention rates.”
5. Suburbia is on fire.
2020’s shift to online work ignited a mass exodus out of the cities and into the suburbs. The trend clearly found its way to the multifamily scene, as people are still seeking rental housing in less densely populated areas into 2022. Many families are also discovering the affordability of smaller towns, the joy of green space, and other suburban perks.
Per Kim, “In short, the suburbs might become cultural hubs and continue to attract more multifamily renters.”
Everest says: What’s better than a multifamily?