July 25, 2017
By Dennis Kaiser
Connect Orange County is this Thursday (July 27th) at the Balboa Bay Club in Newport Beach. Follow this link to get more information and register for the biggest CRE event this summer.
Connect Media spoke with one of the panelists, William A. Shopoff, President and CEO of Irvine, CA-based Shopoff Realty Investments, to hear what he thinks is driving the multifamily market.
Q: What are the biggest considerations when developing a multifamily project today with two primary demographic groups in mind? Do you try to build a project that takes both into account, or is it better to focus on one?
A: The current prime renting demographic cohorts are the Millennials and the Baby Boomers. Millennials tend to rent apartments due to the high cost of for-sale housing and are typically “renters by necessity,” while the Baby Boomers are renting as a lifestyle choice, and are more typically “renters by choice.” The names of the cohorts have certainly become more prevalent, as everyone knows the terms, “Millennials” and “Baby Boomers,” but since the mid-1990s, we have seen the “renter by choice” really emerge as a large segment of apartment residents.
Since we are not developing baby boomer-specific or Millennial-specific housing, the apartments we develop really focus on both demographic cohorts, and accommodating what they both desire.
Q: What opportunities and challenges does each group present, and what solutions have you come up with to address them?
A: What we see in the unit mix is a limited number of three bedroom units, as these prime renting groups have a preference for either one bedroom or two bedrooms. For those Millennials and Baby Boomers choosing the two bedroom formats, the former chose this for roommate situations and the latter as they have more furniture and belongings, and also want to have space for guests and grandkids to visit. Neither typically have families, so larger units and three bedroom units have less demand.
Each demographic cohort has unique requirements when it comes to their preferred activities and amenities on-site, as well as proclivities toward the time of day for those activities. Millennials are often in the workforce, and thus have professional responsibilities that keep them from using on-site amenities during the day. Baby Boomers, on the other hand, might be retired or nearing retirement, and therefore seek on-site activities and amenities that they can utilize during daytime hours. Finding a balance to fit both groups’ needs can be a challenge, but also an opportunity when executed correctly, allowing a property to appeal to a larger renter group.
Q: What are some examples of projects that have been designed to accommodate multiple, and very different, age groups? Why are they working or why do you think they will?
A: In our under construction, 462-unit Uptown Newport apartment community (pictured above), our partners designed dual amenity decks on the north and south building podium. Each building has a pool and other amenity elements that are connected by an elevated pedestrian bridge over a publicly-accessed paseo. This allows users of varying ages and demographic cohorts to either participate on the more active side, which has the fitness center and the lap pool, or on the more leisure-focused side with a club room and lounge pool.
Additional amenities in each building include roof-level sky decks; podium-level landscape courtyards with both passive areas and active areas including seating and outdoor kitchen areas with grills; bike repair facilities and bike storage facilities; and dog spas for residents of all ages with four-legged companions. Only one of the two buildings includes a business center, which will be available and open to residents of both buildings. This variety of amenities allows the project to appeal to Millennials, Baby Boomers and all renters in between, providing something for everyone.
For comments, questions or concerns, please contact Dennis Kaiser