What Stands Out in Chicago’s Luxury Multifamily Market?
- Dec 04, 2018
Despite the fact that Chicago’s population is shrinking, demand for housing has continued to rise throughout 2018, especially in core submarkets. The corporate downtown migration phenomenon, started in 2016 by giants such as Google, Motorola and McDonald’s, has determined young professionals to look for a modern apartment closer to their job, which impacted the real estate landscape in and around Chicago’s central business district.
As of November, Yardi Matrix listed 18 high-rises under construction across urban Chicago, with the 800-unit NEMA Chicago tower as the largest one. Since apartment inventory is becoming increasingly diverse, developers are more mindful to residents’ needs than ever before, according to Optima Inc. President Tara Hovey. In an interview with Multi-Housing News, Hovey emphasizes that distinctive design, wellness-oriented amenities and proximity to work and entertainment are the main factors that can make a project stand out in Chicago’s luxury market.
The company’s most recent delivery, the 490-unit Optima Signature, is one of the largest communities completed in the Midwest during the past eight quarters. According to more recent data, the property now occupies the third place in the same ranking.
Chicago seems to be approaching a new cycle peak in multifamily deliveries. Are fears of overbuilding in the luxury segment justified?
Hovey: There’s a healthy level of optimism among Chicago developers. As more firms are relocating to downtown, we’re seeing steady demand for quality high-end luxury rentals with the market absorbing the recent supply of units.
While gaps are emerging in the delivery pipeline, downtown Chicago’s population growth is continuing as high-paying jobs buoy the market. Young professionals and Baby Boomers want luxury living options with access to work, restaurants, nightlife, cultural opportunities and Chicago’s lakefront.
How can a project stand out among the flood of new developments?
Hovey: It’s all about the resident experience. Projects must have a distinctive design to appeal to renters in a competitive market. For this, developers need to tap into placemaking and the built environment to create a shared sense of community as the spaces where people live and work have an enormous effect on their overall wellness. One’s home should have a restorative power, and this can only be achieved through the thoughtful design of amenities and experiences.
Tell us a bit about what makes Optima communities popular.
Hovey: Making sure our residents can easily access public spaces that promote health, happiness and well-being is at the foundation of our communities. We program all of our amenities with this in mind, and we incorporate art throughout our communities. The design of our interior spaces, both the homes themselves and the common areas, aim to create a sense of spaciousness and are flooded with natural light.
Finally, we continue to surpass the expectations of our residents with services and retail amenities that make their lives easier. For example, Optima Signature features a personal chef for the community, a Montessori school for the children of young families in the building, boutique fitness concepts and food concepts that connect the residents in our communities. It is important to be incredibly thoughtful about who will be living in the building and ways to enhance their lives and their experience in their home and the community. Our goal is always to exceed their expectations.
Tell us a bit about the process of building Optima Signature. What makes this project a success?
Hovey: There are many things that have made Optima Signature a success, from its striking design to the overall satisfaction of our residents. As part of our commitment to placemaking, we included a plaza and public art in the front of the building to contribute to the neighborhood.
We were originally scheduled to open for first move-ins in the first quarter of 2018. However, due to the natural efficiencies of our business model—we manage in-house all aspects of the architecture, design, construction and development of our rental communities—we were several months ahead of schedule. We analyzed this further and decided as a team that we wanted to expedite the schedule so Optima Signature would be ready for first move-ins during the peak leasing season. We hit this goal, and our first resident moved in June 2017.
We also kept the community-at-large in mind in signing retail tenants that would fill a void for the neighborhood and Optima’s residents, such as a Montessori early childhood center, full-service veterinarian, nail salon and fitness studio.
What role does sustainability play in your projects?
Hovey: To create overall wellness in our communities, Optima is committed to promoting advances in sustainable building design and construction. For example, Optima Signature is LEED certified to the Silver level. Our projects integrate innovative selections, finishes and solutions into master planning and creative development, including LEED, BIM (Building Information Modeling) and Virtual Building Technologies.
Tell us a bit about your company’s development strategy in Chicago so far. What other projects are you working on in Windy City?
Hovey: We continue to pursue development opportunities in Chicago and its suburbs for both rental and for-sale projects. Optima’s continually assessing the needs in the marketplace. We want the communities that we create to fill a niche for people and our strategy moving forward will continue to deeply study different demographic groups so we can best fulfill their needs and exceed their expectations in reimagining what the experience of a home can be for them.
How do you see rent activity and prices in Chicago’s luxury multifamily market going forward?
Hovey: We expect no material shift in rental activity in Chicago’s luxury market going forward. On the strength of continued strong demand, pricing will adjust based on supply in individual submarkets, but we expect an overall positive trend.
Images courtesy of Optima Inc.