How Multifamily Investors are Urbanizing the Suburbs
Baby boomers and millennials have their sights set on dynamic, live, work, and play opportunities in the suburbs. In other words, the urbanization of the suburbs is here, and multifamily investors are responding in kind. In a sense, the suburban market is being turned on its head as investors create a practical transfer of urban-style features–including walkability, access to retail and restaurant amenities, and dense housing–beyond the city limits.
These factors outline how multifamily investors are urbanizing the suburbs.
Determine Your Target Tenants If Baby Boomers and Millennials are the largest cohort making the transition to the suburbs, it’s important to focus on demographic subgroups. “Maturing” Millennials, for example, are leaving urban communities to give the suburbs a dry run before raising a family. They expect class A market features but at lower rents. Then there are “gray-collar” renters whose household income and education levels and population-growth exceed national standards.
Investors understand that you can’t fit a square peg in a round hole by trying to replicate city-living in the suburbs. “As these sub-hubs multiply across the country, what’s clear is that no single prototype will work since suburbs vary from tiny communities with a single stoplight to large ones considered small cities,” According to Multifamily Executive. “Yet, the locations most likely to thrive share the common denominator of being hybrids that borrow some parts from their lively urban counterparts and retain their bucolic and other suburban advantages.”
Proximity to Jobs and Transportation
Employment opportunities close to residents can be a strong incentive for investors when selecting one suburban site versus another. There needs to be some form of mass transit or highway network to get residents to them. Chevy Chase Lake, for example, is a mixed-use, transit-oriented community in the Maryland suburb of Chevy Chase close to Washington, D.C. with access to the Metro’s Purple Line. Just to the north in Rockville an 1,100-unit multifamily neighborhood is being developed in a 90-acre industrial park along another Metro line.
However, development is proving to be more challenging in Tysons, Virginia, an “edge city” of DC. “The grid of streets planned for Tysons exposes the challenges of transforming suburbia,” according to Public Square: A CNU Journal. “The grid is mostly internal, with few connections to surrounding subdivisions. Three highways interrupt the network. The plan now underway is a huge improvement, yet ongoing retrofit is needed, perhaps decades from now, that connects the downtown to surrounding cul-de-sacs and loop roads.”
“Placemaking, if applied thoughtfully and well executed, provides the soul for our communities through the design of a contextual urban framework of pedestrian friendly neighborhoods, open spaces and a vibrant urban environment created by the layered realm of architecture, landscaping, signage and lighting.”
Gain Buy-In From the Community
Compared to large cities, elements of multifamily renovation can be more difficult in suburban areas, including zoning and acquiring variances. Building trust with the community is an important step in choosing a community location.
Multifamily Executive emphasizes this point, using the example of a multifamily property in Richmond, Virginia: “Richmond, Va., which experienced a boom in Millennials moving downtown after 2010, is now seeing a swing back to the suburbs. Good infrastructure was already in place in Richmond’s suburban counties like Henrico County. But to attract mixed-use, multifamily living, the suburban counties recognized that traditional policies and approaches to land planning needed to adjust. Rather than create big urban-like downtown cores in various suburbs, the goal was to fashion compact, pedestrian-focused projects along existing corridors to stimulate development and rejuvenation that takes advantage of existing infrastructure.”
Locate Near Office and Retail
Retail, office, and residents need each other. The success of a neighborhood relies on the well-planned intersection of commercial and multifamily renovation. Similar to the proximity of communities to transit, everything should be close by. Tenants want to live five minutes from
from coffee bars, grocery stores, and entertainment. Finding the right balance is key, according to Multifamily Executive: “The answer for both suburbs—as well as cities, even large ones—may lie in seeking retailers that have learned the importance of experiential features that consumers seem to find more relevant rather than stacks of merchandise. Entrepreneurial leaders like Apple are rolling out ideas such as workshops and classes.”
Amenities, Amenities, Amenities
Amenities are significant considerations for multifamily living. We’ve written previously about the importance of amenity upgrades to attracting new tenants. To avoid the risk of trying too hard and unrealistically to mimic vibrant cities, investors are taking advantage of neighborhood natural amenities in their backyards, like parks, lakes, and trails. We recently renovated multiple units and hallways, as well as the package room and pool-area restrooms of a multifamily, student-centered apartment building in Evanston, an edge city of Chicago. Students also have access to the Clark Street beach and trails along Lake Michigan.
There is a shift afoot in which investors are attracting renters from the big cities. We’ll give the last word to Jose Sanchez, retail and mixed-use design leader at DLR Group, who told GlobeSt.com, “Demographic shifts illustrated that we are becoming a society that values main streets more than backyards. Walkability, density, sense of community, mixed uses and a diverse population are bringing new life to the suburbs. Placemaking, if applied thoughtfully and well executed, provides the soul for our communities through the design of a contextual urban framework of pedestrian friendly neighborhoods, open spaces and a vibrant urban environment created by the layered realm of architecture, landscaping, signage and lighting. It is also vital to understand that these new town centers should be developed in a way to attract multiple demographics and economic classes through inclusive design and programming.”