By Bogdan Odagescu, Associate Editor
With an inventory of 19,000 units in the discretionary assets class and a pipeline of almost 4,000 units, the luxury multifamily sector is one of the most relevant indicators when it comes to Boston’s development market.
According to the most recent Yardi Matrix multifamily report on Boston, the metro saw a 23 percent rise in renter population between 2006 and 2013, with the supply increase barely reaching 15 percent. The city’s population increased by six percent between 2010 and 2014, twice the national average. Boston is strong and getting stronger.
However, with great demand comes great competition. Where is the lifestyle housing market heading and, more importantly, what does it take for a developer to keep up with this constant raising of the bar? To find out, Multi-Housing News spoke with Sean Sacks, Director of Development at Hines, Boston.
MHN: As a developer in the Boston area, has there been a sense of competition getting more intense during the last few quarters?
Sacks: The competition has definitely intensified during the last few quarters as deliveries have increased. This is especially the case in Boston’s Downtown core market and parts of Cambridge where there are thousands of units in lease-up at the same time. If you go a little further out to the “outer urban” and closer suburbs, the competition lessens because of fewer deliveries and smaller pipelines.
MHN: With the amount of luxury multifamily construction on the rise, is it getting harder to attract tenants and maintain high occupancy rates?
Sacks: Hines has been very fortunate with its first two multifamily developments here in Waltham and Cambridge. The 200-unit Currents on the Charles in Waltham stabilized within nine months and now stands over 96 percent occupied. The 244-unit Fuse Cambridge community opened in November 2015 and is already nearly 50 percent leased in March 2016. It is not just one thing that leads to success—it is ultimately a combination of great locations, thoughtful design, quality construction, best-in-class management, targeted marketing, premier amenities, and unique touches. More so than a couple of years back, developers and owners need to execute on all of these fronts.
MHN: Considering the current climate, how can developers and property managers step up their game and meet demands quality-wise?
Sacks: It is really about executing in all areas of development and management. That said, amenities and services are two areas that help a property stand out in a competitive market. All three of our properties in Massachusetts boast at least 10,000 square-feet of amenity spaces, inclusive of our pool courtyards. In addition to fitness and club rooms, our properties also feature multiple lounge/network rooms and expansive courtyards that provide great space to take a swim, BBQ with friends/neighbors, and/or relax and enjoy the views. Regarding services, with our terrific property manager the Bozzuto Group, we have developed solid relationships with local fitness instructors, the Baroo dog care service, Drizly beverage delivery, and many others. Today’s discerning renter expects owners and managers to help curate or pre-select the best of local services with the best possible deals.
MHN: “Fine touches,” “contemporary amenities,” and “special features” are words that go hand in hand with lifestyle accommodation. How does Hines understand these needs here and now?
Sacks: Hines is relatively new to multifamily apartment development in the U.S., having made a strategic commitment to the industry in 2011. Hines has brought the same level of attention to detail and quality with its multifamily projects as it has with commercial properties for the past 50 years. Hines maintains an open mind to new and better ways to develop and manage its communities. One key component to the success of our apartment communities, and our firm, lies in our dedication to listening and researching what prospective renters are seeking, and doing our best to incorporate these details at the properties. For example, while we did not have an automated package solution originally designed for Fuse Cambridge, we worked with Package Concierge to incorporate the service at the community for better renter convenience. At Meriel Marina Bay, we felt it was very important to create three elevated courtyards, each with a different identity, while still maximizing the spectacular views of the marina and the bay. As a unique amenity example, we also will have dedicated kayak racks for residents to make it as easy as possible to go for a paddle either in the bay or along the Neponset River. Going back to Fuse Cambridge, we are not only about the 120-acre Alewife Brook Reservation, but also have made a concerted effort to bring the outside indoors with our Living Green Wall and two-story glass lobby area featuring gorgeous views of two majestic willow trees that frame the walkway into the Reservation.
MHN: Are luxury tenants interested in sustainable development and sustainable living?
Sacks: Yes and no. Luxury residents appreciate the fact that a community is LEED (Leadership in Energy and Environmental Design) certified and that it provides features such as a Living Green Wall and green roofs, but at the end of the day, they are not going to pay a premium for these features if it does not positively affect their own unit and personal lifestyle. Overall, as developers and owners, we can do a better job of explaining the benefits of sustainable design features and specific programs. While a resident may not directly see/feel the benefits, they ultimately help contribute to a healthier, happy lifestyle.
MHN: In terms of multifamily housing, are there any emerging trends that we should keep a closer eye on in the next couple of years?
Sacks: Health and wellness is going to be a significant theme in the coming years. With today’s hectic, non-stop lifestyle, people are always looking for ways to eat better, exercise better, relax better, and even sleep better. Another area is technology—in particular automation within apartment units. This trend is going to trickle down more and more from high-end luxury homes, directly into the apartment to make certain services easier, faster, and more convenient for residents.
Images and renderings courtesy of Hines