Maximizing Multi-Family Properties in Hot Demand Markets
Burgeoning populations in Denver, Chicago, New York, San Francisco and other growing hotbeds are causing a resurgence in multi-family amenities as interested renters compare older properties with newly built options. To keep renters happy, property owners have to take a serious look at more than just room sizes and in-unit attributes, as today’s multi-family communities offer everything from wine cellars and fitness facilities to bike parking and children’s play centers.
In New York, nearly 650 building permits have been issued since 2014 for privately-owned residences of more than five units. Newly built units are competing head-to-head with established buildings who want to hold on to their tenants, and they’re busily adding offerings (or subtracting them) to keep up with the needs and wants of current market demand.
“Everyone is trying to keep up,” said Stan Olan, the president of the co-op board at Two East End Avenue, a century-old factory converted into apartments in 1979. “I drive around the city every day, and I’m constantly seeing new buildings coming up with great amenities.” Olan is giving serious thought to updating the two fitness rooms in the basement at Two East End — last refreshed in 2013 — and adding a rooftop deck in order to take full advantage of the building’s water views. ‘Residents will enjoy it,‘” Mr. Olan said. “But the other consideration is that we understand about amenities, and by spending some money, we’ll increase our value.”
According to ForRent.com and other property rental resources, tenants are willing to pay up to 5 percent or more in additional rent for desired amenities like a fitness facility. The trick is in knowing what to add and how to meet the majority of those particular needs.
In Colorado, more and more millennials are moving to the Denver area for the universities, job growth and attractive local lifestyle that is causing the rental market demand to intensify. Demand is increasing and units are still under construction, driving rental prices up and potentially deterring current and prospective renters who want to find a home with precisely the right set of amenities – and they want to find it right now.
According to Metro Denver Apartment Market Report, there was a deficit of more than 50,000 units in the past decade, with the lowest unit construction occurring between 2008 and 2009. Since then, the building permits and finished units have picked up the pace, but there’s still a ways to go to bridge the gap between available units and demand. With the on-demand nature of the demographic tide of renters, many don’t have the patience to wait for newly constructed units, but they do want the amenities promised with them. That brings up a challenge for older properties that are trying to stay competitive and keep renters long-term in their established units.
Enter into the equation companies like Advanced Exercise, a fitness equipment and design company that helps property owners upgrade their fitness room amenities to keep up with other neighboring multi-living complexes. With the growth of the millennial population and demand for apartment rentals, it takes more than offering competitive rent incentives to capture these markets. If you are operating an older facility, it’s just as important to update your common areas and amenities to attract and retain tenants.
This is where strategic business partnerships with companies like Advanced Exercise – who can work with existing spaces and leverage tight budgets to upgrade equipment – work in your favor. “We’ve helped hundreds of properties upgrade and re-design their fitness spaces and other common areas, or help them build them from scratch,” said Bruce Schlagel, VP of Sales with Advanced Exercise. “Maximizing the space available is both art and science, and we’re able to address some of the changing needs of the market to keep renters happier and staying longer with properties that meet their needs.”
Some property owners who are tight on space are looking to innovative outdoor solutions to help them expand amenities in new ways. Vantis Apartments in Aliso Viejo, CA decided to design an outdoor fitness space to help attract and retain the tenants that are drawn to both the fitness and outdoor lifestyle elements that are popular in many markets today. They called upon the experts at Advanced Exercise to help design and equip the space.
Advanced Exercise provides a direct connection to industry-leading commercial exercise equipment, including new and used weightlifting equipment. Facilities looking to upgrade don’t necessarily need to start from scratch, as used equipment options used in new combinations can provide a multi-functional solution.
According to Mark Williams of the Apartment Association of Metro Denver, “There will be more choices and incredible amenities offered with intense competition as all of these units [in construction] come on line. The other good news for renters is that the Denver apartment industry has been very aggressive about reinvesting into their properties. Really at all levels of apartment communities, the owners have put in a bunch of money to upgrade common areas and update units to remain competitive.”
Property owners that are looking ahead to plan, strategize and maximize their potential with renter’s amenities in common areas are the best positioned to grab new renters before new construction can catch up. If a fitness center or common area upgrade is possible for you, Advanced Exercise looks at equipment, space planning, activity flow, noise implications, and details including electrical use, flooring and much more.
There is no slowing down in sight for the multifamily market in high-demand markets like New York, California, Colorado, and others. Help your facility shine the best way possible with trusted partners on your side. Contact your local Advanced Exercise representative today!