2015 was a boom year, especially in multifamily – with an exciting amount of new projects being announced, and cranes punctuating the city skyline showing off rapid progress. As always, we save the serious economic forecasting to the experts–but our staff, project managers, and principals have plenty of predictions and trends in view for the coming year.
Here, now, we offer our observations and outlook for 2016.
- Millennials looking to Class B residential buildings as prices skyrocket and the market becomes saturated with high-end luxury buildings. The Millennial cohort of renters are being priced into Class B offerings – which look a lot like the Class A of a few short years ago – and many still require roommates to make it work.
- Some developers actually starting to shy away from the Amenity War in favor of maximizing rentable floor area, lowering total cost of the building and with it, rents.
- In other buildings, amenity offerings are still the big differentiator. One highly-amenitized building coming on-line in 2016 is set to include a band room and recording studio, complete with recording equipment and acoustical treatments. Everyone’s a DJ these days, so why not give them a place to hone their skills and entertain friends?
- On the topic of amenities, social connections remain at the heart of amenity design. No matter the activity, all amenities are about creating space for people with similar likes to gather and participate in those activities. Most buildings have bike storage rooms, but now a few savvy developers are including fully-outfitted and furnished Bike Club rooms with repair stations, tools, vending machines full of parts, seating, and TVs streaming How-To videos and the Tour de France. For the right tenant, a specialized amenity offering is a showstopper.
- We’ve heard that package rooms are getting larger to accommodate a larger delivery volume – some statistics place it at 70% of residents receiving a package every day. But property managers are turning to third party providers to take the load off of front desk staff. Expect more installations of secure parcel dropboxes such as Parcel Pending, Luxor One, and Package Concierge. The U.S. Postal Service is even getting in on the action with their GoPost offering inside multifamily buildings and 24-hour retailers.
- Communal living desires/amenities seen in multifamily are working their way into hotel properties, bringing the “hostel” feel up-market. Hotel Lobbies still exist, but guests are spending more time in executive lounges and even programmed activities like wine tastings and kitchen demo dining experiences.
- Smart Technology has already arrived throughout the common areas and guest rooms, and apps that provide for check-in, payment, and ordering services means that traditional “desk staff” can focus more on providing a one-on-one VIP guest experience. Expect to see fewer check-in counters and more welcoming Concierge areas.
- As labor and construction costs continue to climb, many developers and owners are forgoing ground-up development, electing instead to adapt and reuse existing commercial buildings, particularly in urban areas where vacant land is in short supply.
- During a time of limited financing, adaptive reuse is not only more cost effective alternative to ground-up development, but often faster. Adapting and reusing an existing building with an already non-conforming status may also allow a larger building than current zoning permits, and often results in projects with more authenticity than new construction.
- As tech companies locate themselves in the heart the city and drive the next wave of growth in Office construction, developers of residential, retail, and entertainment also stand to benefit greatly.
- As opposed to the sprawling west coast headquarters these companies may have, their downtown offices will look to the rest of the neighborhood for some of the amenities that their employees desire.
- Workplace design is headed home, with employers offering more flexibility with hours and location of their workforce. Employees are opting to work off-site and have graduated beyond the corner cafe–now they’re finding space in their multifamily lobbies, lounges, and dedicated business centers that look less like a single workstation with a laser printer and more like a trendy coworking space.