Real Estate Journal — ODM — POA Expo 2018 — March 30 - April 12, 2018 — 17B
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POA E xpo 2018
By Dan Doyle, The Beach Company 5 Multifamily Development trends shaping 2018
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work in Greenville, so we’ve made a concerted effort to know Greenville’s leaders and residents by participating in industry meetings and sup- porting community events. This year, we’ve served on economic development panels in the area and donated scholarship funds to support the region’s technical college students studying real estate, project management and construction. Advocating for responsible development and understanding the needs of local residents will likely result in a more desirable end product
his time last year, mul- tifamily developers were all asking them-
new developments by incentiv- izing developers and residents to promote alternative modes of transportation. In 2018, we’ll see more municipalities putting programs in place to assist with affordable housing development, with some creat- ing mandates that require a certain amount of affordable housing. To really make a proj- ect attractive to developers and local governments, I predict that we’ll see more incentives for developers to make a project affordable in the form of subsi- dies through tax abatements or the creation of tax increment financing districts.
Today’s renter still wants to live downtown but is be- ing priced out. Construction costs remain high, so devel- opers must look to solutions like adaptive reuse of existing buildings to help solve some of the cost issues in the urban core. In these markets, retrofit- ting an existing building may be more attractive, as the struc- ture costs are already in place, so multifamily developers can deliver a product just as nice as a new community with a lower cost basis, which should result in a lower rent for the resident. Adaptive reuse solutions will continued on page 27B
3. Community Engagement While working in markets outside of your company’s head- quarters, developers should actively engage city officials and industry experts through strategic programs that align with your mutual goals. While The Beach Company is head- quartered in Charleston, we’ve recently developed two multi- family communities in Green- ville and have another in the pipeline. The two cities are only three hours apart, but they cater to two different audiences and have different views on development. What works in Charleston doesn’t
s e l v e s t h e same ques- tion: When w i l l t h e apartment- building fren- zy taper off? While certain markets have experienced
Dan Doyle
slower absorption rates with labor shortages and high con- struction costs hindering the production of new units, the demand for multifamily devel- opment in certain sectors is still strong. Here are five multifam- ily development trends shaping 2018: 1. Increased Segmentation The key to a successful lease- up is to differentiate your prod- uct to appeal to the demands of your market’s unique resident base. For the past few years, the industry has been heavily weighted at the top end of the market, but in 2018 I predict that we’ll see an increased demand to serve the middle market. We’ve focused heav- ily on catering our product to a discerning and selective resident wanting luxury apart- ments with first-class ameni- ties. While demand for this product is still alive and well, leasing velocity may begin to slow, as those renters have a lot more options now. In 2018, we’ll see a spike in the demand for affordable rental options. In fact, we’re seeing demand for affordable housing in every market that we’re ac- tive in right now. To maintain a competitive edge in 2018, multifamily developers must adopt targeted solutions that appeal to the unique resident base of a city, which includes paying more attention to the middle market. 2. Municipality-Driven Incentives Today more than ever, it’s important for developers to form partnerships with lo- cal municipalities in active markets to better understand the needs of the city and its residents. While we’re seeing a push for affordable solutions from renters, most cities have offered few incentives for de- velopers to build an affordable multifamily product in the past. In 2017, we witnessed some cities doing away with or sig- nificantly reducing the number of required parking spaces in
and faster timeline. 4. Adaptive Reuse
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