2020 Trends in Multifamily Development
While the multifamily sector has fared better than many other industries amid the coronavirus pandemic, 2020 was undoubtedly an unprecedented year for the real estate market.
While the multifamily sector has fared better than many other industries amid the coronavirus pandemic, 2020 was undoubtedly an unprecedented year for the real estate market. Buyers are reevaluating their lifestyle preferences, with many prioritizing more square footage and sought-after amenities in suburban areas over micro-units in larger cities. As multifamily housing becomes a longer-term option for people of all ages and incomes, developers are tasked with finding new ways to satisfy the changing market’s needs.
Prioritizing Luxury Amenities
With a new dependence on working remotely and limited social gatherings, residents are spending more time at home and seeking high-quality amenities that complement their preferred lifestyles. Luxury amenities, encompassing categories such as convenience, health and wellness, and entertainment, are driving the demand for modernization in multifamily housing. Whether residents are seeking the convenience of built-in retail and office space, active lifestyles through boutique fitness studios equipped with sanitation measures, or modified outdoor spaces for safe, social gatherings, multifamily developments should offer an artful blend of residential, office and retail spaces to accommodate a variety of preferences.
For example, The Jasper, The Beach Company’s luxury mixed-use building in Charleston, South Carolina, will offer luxury residential amenities such as cafes and restaurants, state-of-the-art health and wellness studios and an abundance of parking —all set in a prime downtown location. Residents also have access to a one-acre amenity deck with a premiere rooftop pool and lounge, demonstration kitchen, lounge area for sports and movie watching as well as private wine lockers, a pet park, electric car charging stations and more. On top of that, The Jasper’s office tenants will have access to the property’s rooftop pool and garden, corporate wine cellar and club room equipped with a private lounge and demonstration kitchen.
Retail As An Amenity
Multifamily property owners are still seeking appropriate retail uses to best serve their mixed-use communities. Amenities paired with the retail experience offer an advantage over apartments and condos built only for residential purposes, because mixed-use projects create a sense of community for tenants to identify with. Retail owners typically find great success with mixed-use communities due to the onsite tenant population and heavy foot traffic. In recent months, with new safety protocols and less in-person interactions, retailers have enacted innovative adjustments to their typical space layouts and operations. In addition, some multifamily owners are being flexible with short-term deals for retail tenants to ensure they can cover debt services and partner distributions during the COVID-19 pandemic.
As part of The Beach Co.’s Canvas development in Greenville, S.C., more than 21,000 square feet of ground-floor commercial space will serve the residents of Canvas Lofts, the North Main Street business district and the surrounding Hampton Pinckney neighborhood. Set in the heart of downtown Greenville, the retail space serves as an ideal location for restaurateurs, creative office users and neighborhood-serving retailers.
Expanding Portfolio Projects
Amid the COVID-19 pandemic, developers are seeing a spike in the demand for attainable rental options in all active markets. Whereas in the past few years, the multifamily sector has been heavily weighted at the top end of the market, in 2021, the industry is projected to experience an expansion of scope in order to serve a more diverse resident base, especially in the middle market.
At The Beach Company, we have focused heavily on catering our product to a discerning and selective resident wanting luxury apartments. While demand for this product is still alive and well, we are looking to develop a more balanced portfolio of communities across a variety of price points.
Through increased market segmentation, developers are realizing that affordable housing options cannot be a one-size-fits-all approach. While some developers in the most competitive markets — where space is at a premium — offer attainable housing in the way of micro-units, this approach is less popular in today’s climate. The tiny apartment trend can no longer satisfy the growing middle-market demand. In the U.S. Southeast, where The Beach Co. has a long history of development, suburban areas present an opportunity to offer larger floor plans, which is essential as many renters are adapting to a work-from-home lifestyle. To maintain a competitive edge in 2021, multifamily developers must adopt targeted solutions that appeal to each potential market, which includes paying more attention to attainable housing solutions.