Palm Springs, Calif.—At the recent NMHC Annual Conference, speakers at the session “Creating Communities: New Development and Redevelopment Opportunities” discussed new development trends for multifamily.
One of the key aspects for new developments is finding capital, however, this probably won’t be an issue if it is a desirable property. Development equity is available for good deals. For the right product, there’s plenty of equity available.
The most desirable places to build will continue to be urban areas. According to one speaker, “There is no problem finding equity if you stick to the major cities.”
However, according to the panelists, a strategy for new developments is to look to build in the urban market, which includes transit-oriented communities, and “suburban urban” areas, which might be located away from cities. “At the end of the day we want to have a strategy to create the most cash flow,” a speaker said.
In terms of what is currently desirable for the actual communities, the speakers said to look towards smaller units, especially outside of core areas, where they would be more cost efficient. However, if developers do build smaller units, they should be aware that turnover within these units is higher than in larger units.
For amenities, the panelists said that there is still a desire for stainless steel appliances and granite countertops. Additionally, dog washes and bike storage areas are gaining in popularity. According to the speakers, the multifamily industry is drawing from the hospitality industry for amenities. However, they warn that there can be too much of a good thing when it comes to amenities. “There is a bit of an arms race going on in amenity spaces,” one speaker said. “Try not to add more for the sake of adding more.”