An Insider’s Perspective on DC Multifamily Development
In spite of rising costs and lingering procurement issues, construction projects across the Mid-Atlantic have moved forward. Kettler’s Pamela Tyrrell weighs in.
Pamela Tyrrell, Executive Vice President of Multifamily Development, Kettler. Image courtesy of Kettler
With roughly 30,000 units designed and built, and more than 2,000 others in the pipeline, Kettler is one of the most active multifamily developers in the Mid-Atlantic region. The company is currently working on several large-scale projects in high-demand suburban areas despite the labor and construction supply challenges disturbing development across the country.
“Kettler has had to adjust and adapt to these changes by modifying our materials selections based on availability and advancing timing for our material orders to accommodate longer lead times,” Pamela Tyrrell, the company’s executive vice president of multifamily development, told Multi-Housing News.
MHN talked to Tyrrell about why Kettler expects continued success in the Mid-Atlantic area.
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How would you describe the Mid-Atlantic multifamily development market over the past 12 months?
Tyrrell: The Mid-Atlantic multifamily development market has continued to be strong as a result of available capital and strong rent growth and absorption. Construction cost escalation and procurement timing issues remain a challenge, but we have been able to account for these in our underwriting and proceed with new projects.
Due to labor and material availability, we have seen some delays to our construction projects but have seen robust absorption post-delivery.
Though the past 12 months presented challenges and schedule delays, many investors looked at opportunities in adjacent growing markets along the Mid-Atlantic region, and this trend will continue to evolve through the migration to other cities throughout the Mid-Atlantic.
What areas of the Washington, D.C., metro have been the most attractive lately and why?
Union Heights, a 325-unit community in Washington DC
Tyrrell: Kettler focused on development opportunities in the urban core and closer suburban locations near transit for many years. We recently completed Union Heights in Washington, D.C. While we continue to evaluate opportunities close to downtown, our current development projects are located in more suburban locations with an urban context, including walkable amenities and retail.
Please tell us a few details about a significant project in the area. What makes it stand out? Are there any other noteworthy projects you recently worked on?
Tyrrell: Kettler’s most significant project in the metro region is The Mile in Tysons, Va. Sitting on 40 acres, the mixed-use neighborhood comprises 1,115 units through Highgate at The Mile with 395 units, Brentford at The Mile with 411 units, and Charlton at The Mile with 309 units.
Fairfax County’s long-planned transformation to Tysons to increase housing, green spaces, pedestrian-friendly communities, and easy access to retail in the area is coming to life through the development of The Mile. Located at the heart of Tysons Corner, a mile from the metro station, The Mile provides luxury apartments with innovative and smart features, a dedicated trail for pedestrians and bicyclists, and community amenities. Brentford is currently under construction and is designed to achieve LEED Silver certification.
Another critical project for Kettler that was recently completed is Vyne One Loudoun, in partnership with Kite Realty Group Trust. This mixed-use apartment community in Loudoun County includes 378 units and 21,000 square feet of retail and offers luxury rental apartments and townhomes designed to create a personal getaway for its residents.
In addition, Kettler is the construction manager on The Mather in Tysons, Va., an upscale high-rise community offering luxury living, amenities, onsite retail, continuing care, and concierge services to its residents.
Labor shortages and inflation have increased expenses for multifamily developers. How have you been tackling these issues?
Tyrrell: We have been building more time to account for these challenges through more conservative schedules and working with our general contractors to develop and follow detailed procurement schedules and advance select subcontracts earlier in the process than we used to.
To what extent has the pandemic-induced demographic migration impacted D.C.’s development market?
Tyrrell: With the increased ability to work from home and individuals moving to more economical housing markets, suburban areas have experienced higher demands. Development markets with pedestrian and bicycle access, proximity to retail and larger apartments with modern amenities have been in greater demand, helping boost the economic development of more suburban locations outside of the urban core.
Highgate at The Mile in Virginia
What are your plans for this year in the D.C. area?
Tyrrell: Kettler’s focus in 2022 will include advancing several projects through the entitlement process and completing the delivery of Brentford at The Mile. Kettler continuously looks for opportunities around the metro area.
What are your expectations for the D.C. multifamily development market?
Tyrrell: The D.C. multifamily development market in 2022 will continue to be strong in high-demand suburban locations. We expect construction costs and procurement issues to remain, but are hopeful that some of the volatility will moderate as the year progresses.
