8A — August 12 - 25, 2016 — Financial Digest — Multifamily Financing — M id A tlantic
Real Estate Journal
www.marejournal.com
M ultifamily F inancing
By Allison Kerwin, M&T Bank Multifamily performs well in Delaware due to smart dev. targeting millennials & retirees
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s multifamily devel- opment continues to perform well nation-
But it’s not with the same pre-bubble expectation of, “if you build it, they will come.” Rather, smart developers in Delaware have realized that the market exists only if they offer potential apartment dwellers the right amenities at the right location. For Millennials, that means an urban lifestyle that’s close to jobs and entertainment. And this demographic is quick- ly snatching up new develop- ment in and around Wilming- ton’s redeveloped Riverfront and well suburban areas such as Claymont, in projects com- prised of the right mix of
amenities. Those amenities include pools, rooftop outdoor spaces, cafes, restaurants, and on-trend, outdoor beer gardens where Millennials can enjoy their favorite craft brews. And don’t forget about their pets. Some of the most popular new multifamily projects in Delaware include not only dog parks, but also dog washing facilities, making apartment living a pet friendly option. Interestingly, new construc- tion isn’t only appealing to Millennials. Downsizing baby boomers are also discover- ing the carefree apartment life and they are leaving the
suburbs for the urban core. An employment hub home to more corporate headquarters than any other state, Dela- ware‘s aging corporate work- force is nearing retirement and embracing downsizing. New multifamily options al- low them to stay connected to family and friends, as well as nearby beaches and the I-95 corridor that makes Delaware so accessible to New York; Philadelphia; Baltimore; and Washington, DC. All of that is responsible for a number of recent local successes. The Buccini/Pollin Group, Inc. has led the way
with development of The Resi- dences at Justison Landing, a pet friendly, 204-unit luxury, Riverfront development that opened in 2008. It is also the force behind the develop- ment of The Residences at Harlan Flats, which opened in 2015 and sits on Wilming- ton’s Christiana River. Both properties deliver convenient access to waterfront dining, shopping, and entertainment, and capture the lifestyle Mil- lennials prize. The Capano or- ganization has also embraced the changing multi-family demands with the develop- ment of The Reserve at Darley Green located in the North Wilmington area of Claymont, DE. Proximity to major road arteries and public transpor- tation hubs, coupled with an amenity rich project, provides renters with those features they are actively seeking. That demand has made Delaware an increasingly competitive financing market. Local players who understand Delaware to be a sensible, proven, and somewhat under- served market have always contended for quality projects. But now, active interest is also coming from places such as New York, Northern New Jersey, and South Carolina. That interest stems from the strength of the market, but also from how well Delaware weathered the recession, now showing strong upward trends. These players are providing long-term placement, further encouraging local developers and lenders, as the number of takeout sources increases. Fannie Mae and Freddie Mac also continue to show active interest in taking those assets on the permanent side. Even with some of the tightening seen in the commercial mort- gage-backed security market, investor interest remains high. So much so, that some permanent, non-recourse play- ers are beginning to dabble in construction and bridge financing to help complete projects. That’s proving to be power- fully attractive to developers, who with a number of long- term placement options in a low-interest rate environment, do not have to wait another six to 10 months for project completion to lock in perma- nent rates that could be higher in the future. All these factors have made continued on page 12A
ally, with ex- pected origi- na t i ons t o top $260 bil- lion in 2016, D e l a w a r e is following suit, due pri- marily to de- mand from
Allison Kerwin
Millennials and retirees. With vacancy rates hovering near 5% in the state, the market continues to absorb new rent- als at a strong and encourag- ing rate.
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