CRG Launches $1B Development Strategy
The company will start by building a 242-unit workforce housing community in Fort Worth, Texas.
Broadway Chapter. Image courtesy of CRG
CRG has unveiled plans for a workforce housing community in Texas as its first project in a new $1 billion residential development strategy. The company, which is the real estate development and investment arm of Clayco, is planning to deliver the community in summer 2021.
The workforce housing project, Broadway Chapter, will be located at 401 Hemphill St. in Fort Worth. The 320,000-square-foot wood frame community will offer 242 units throughout five stories and offer a telecommuting-friendly design. CRG will be designing Broadway Chapter specifically for residents who work from home by providing pocket offices and common spaces.
J.J. Smith, managing partner at CRG, said in prepared remarks that the COVID-19 pandemic has highlighted the major need for workforce housing, which has recently been considered too expensive to build. However, CRG’s relationship with Clayco allows for cheaper construction costs, on top of the declining land prices due to the COVID-19 pandemic, Smith added in his prepared remarks.
In April, Middleburg Communities released a white paper concluded that workforce housing may be the best positioned multifamily asset to weather a major downturn.
BILLION DOLLAR STRATEGY
CRG’s Broadway Chapter project will be the first in the company’s $1 billion residential development strategy over the next two to three years. Smith explained in prepared remarks that the strategy was a result of investor demand and changing economic conditions. The resulting initiative will look to create Class B workforce housing projects for people earning between 80 to 120 percent of the U.S.’ average median income throughout the country’s Sun Belt regions.
“We’ve taken into account factors like net migration, job growth, GDP and wage growth, livability and relatively low cost of construction compared to many parts of the country, like the coastal gateway cities,” Smith told Multi-Housing News. “Our focus will be primarily on what we call the ‘smile’ of the United States from Charlotte, Raleigh-Durham, Atlanta, Nashville, Austin, Dallas, Denver and Phoenix to Salt Lake City.”
Smith told MHN that CRG is expecting to develop 12 to 15 properties in the Sunbelt submarkets totaling a range of roughly 3,000 to 4,000 units. Within those submarkets, CRG will be looking for development sites that are located in the first- and second-ring suburbs as the key demographic of young professionals and empty nesters is generally looking for more housing options outside of urban centers.
Smith explained in prepared remarks that the COVID-19 pandemic will have long-term effects on what middle-income earners want in a home, pivoting towards something away from the crowded areas, with good school districts, and within close proximity to job centers while not sacrificing quality of life.
“Urban apartments aren’t going away, but we see a great opportunity for the missing middle,” Smith told MHN. “That’s the feedback we’ve gotten from investors, so we’re prioritizing first- and second-ring suburbs with an eye also toward favorable urban opportunities.”
