Finding the right blend of units to include in a new development has always been a tricky task for owners and developers. But in this rental environment, the decision takes on even more importance. Choosing the right mix of one-, two- and three-bedroom units can determine whether you’re building will be home to Baby Boomers or full of Millennials.
Cindy Clare and her team at McLean, Va.-based Kettler Management are accustomed to handling the delicate dance of pleasing both demographics. Clare’s team takes many things into consideration as it plans out the living spaces and balances the number of unit sizes in each building.
Clare, the president of Kettler Management, says location helps dictate which demographic will be more attracted to a community, while scoping out the competition in the area can provide a roadmap to success.
“In your more suburban areas, you’re going to expect more Baby Boomers,” she says. “But look at the product around you and who is living [in] that market. Do your market research and understand who is living there and what the demographics are and what the jobs are there. That’s going to help you in determining your unit base in that target market.”
Once an owner can figure out which group will be more privy to the location, that’s when the mix of units can be decided.
When making that decision, there are some key rules to keep in mind. For instance, Baby Boomers usually want more space.
“When you want to attract that group, you might start building maybe a few more two bedrooms, or larger two bedrooms, than you would in, say, a building that is more geared toward Millennials,” Clare says.
And when you have a universally attractive location, the dominant unit size will most likely drive the renter mix. “A 500- or 600-square-foot one-bedroom isn’t going to work for Boomers–they have too much stuff,” she says.
Kai Weber agrees and says buildings with heavy mixes of smaller units can still appeal to the elder generation. The building just needs to provide and highlight storage options, according to Weber, vice president of marketing at AMLI Residential.
“So, if we find we gets lots of people who are moving from a six-bedroom home to a two- or three-bedroom apartment, then we tell them ‘you don’t necessarily have to sell all your lifelong possessions’,” Weber says.
Chicago-based AMLI serves about 16,000 Gen Y renters and more than 12,000 Baby Boomers across its portfolio, Weber says. Her tip for casting the widest net to attract the most renters is to have the most options for them to choose from.
“It’s not that we are necessarily presenting different options to different people, but we want to make sure that we can customize what’s available so we can tailor our needs to who is going to live at that community,” Weber says.
James Thomas and his company, Cityscape Residential, are developing a new community on the North Side of Indianapolis. The apartment community, 82 Flats, is being developed by the Indianapolis-based company near many restaurants and a large, upscale shopping mall.
Thomas, founder and managing partner, says the accessibility to shopping, entertainment, and the expressway makes the new community a coveted location for all renters.
The highly upscale entertainment area is expected to catch the attention of Baby Boomers looking to move from houses to apartments.
“We’re still pushing around unit mixes a little,” he says. “We tend to have huge absorption on the two bedrooms by empty nesters.”
However, the prime location will surely pique the interests of Millennial renters looking to be near the large shopping mall, even if those renters have to find roommates to live in the luxury community.
“A lot of them are electing to go to the better location and the better community and doubling up in a two bedroom as a value proposition,” he says. “They’re adopting, kind of, a social living environment where they say, ‘I’m happy to continue a more social way of living via roommate if it will allow me to afford this better location at this better community’. We are seeing a greater mix across the two bedrooms whereas with the one bedroom units, you see younger, transitional households.”
Overall, location matters, Thomas says. “The more connected the place is, the more willing we are to do a little higher proportion of one bedrooms,” he says. “So, if you’re literally right on top of bars and entertainment and restaurants–the hotspots–as we are going to be in downtown Louisville and Kansas City, then we will dial the one-bedroom units up. If you’re a little more off the strip, then dial them down.”
To see the full article, visit Multifamily Executive.