What Multifamily Developers Should Focus on in Post-Covid Era
As a development and purchasing partner in a wide range of multi-housing projects, we at MEGA constantly find ourselves on a lookout for ways to make our products more desirable to tenants to increase retention rates and satisfaction with quality of living, as well as to lower turnover and increase demand for our builder and real estate partners. As the post-Covid era approaches, we expect a significant shift in renters' priorities that will greatly influence and drive the market. This shift will affect both property owners/developers and their clients, and will be based on new information titrated out of the pandemic-related research of the past several months. The changes will relate to social distancing, preventive strategies and reduction of the potential of infection transmission, and the seemingly inevitable spike in the number of employees working from their living quarters rather than commuting to work like in the good old pre-covid times.
Here we'd like to present you with several analysis points we've been working on identifying in order to prepare the developers and their investors for the inevitable shift in multifamily market dynamics:
1. Detached Rental Communities
This once small niche is growing so rapidly that it cannot be ignored. Often referred to by its acronyms BFR or B2R, the “build-to-rent” model currently comprises only 5% of homes built, but it is growing rapidly and highlighting some important emerging trends.
These single-family communities typically offer one-, two- and, three-bedroom rentals detached from one another, and offering upscale finishes, high ceilings, and private yards for each unit. They offer tenants a heightened sense of health security and space with no traditional common areas, elevators or shared HVAC systems. Adding perimeter fencing around each unit provides even more security and privacy, creating a greater value for tenants.
Avilla Buffalo Run near Denver – opened April 2019 (a built-for-rent development by NexMetro)
2. Interior Adaptations
First ushered in by technological innovations, and transcended into the realm of necessity by the pandemic, the concept of working from home became the primary path to survival for many. Larger, more open floor plans are becoming the new standard for urban living in many localities that require their inhabitants to allocate office space in their homes, often while providing childcare and conducting food prep in the same apartment.
For example, if a floorplan offers a generous living area, a portion of that can be sectioned off via a wall to create an office space. Thanks to some of the latest innovations in aluminum extrusion technology, this can now be a sliding glass wall, or movable folding wall, that doesn’t permanently interrupt the space, and feels much less intrusive than an actual opaque partition. Developers can market such units as WFH-friendly floorplans, which will make them more attractive to renters seeking an in-home workspace.
3. Exterior Enhancements
Instead of providing a one large outdoor space aimed at communal gatherings, it might be the time to rethink that approach and offer more smaller secluded private spaces for individual families or groups of friends to gather without being in the way of their neighbors.. This is not to say that traditional shared amenities like barbecue grills, outdoor dining and recreational areas aren’t important – many tenants will still want that community building aspect, but property managers will need to train their staff to properly and often disinfect the surfaces. Another easy upgrade that will introduce added value to the property is availability and access to sanitizing equipment, such as disinfecting wipes and disposable gloves dispenses placed in strategic points throughout the common use areas. Introduction of air purifiers with HEPA filters, as well as UVC equipment in low traffic areas, such as laundry rooms, can be an effective tool in protecting health of the occupants, as well as a selling point.
4. Leveraging Technology
Over the coming months, an enhanced use of on-site technology will likely be implemented by landlords to create touchless points of entry into common areas for tenants, their guests and third-party vendors such as package-deliverers. From automated doors to touches elevators, the technologies have been around, and will now fully bloom into fruition.
It remains to be seen exactly how COVID-19 will affect and change the multifamily market, but one thing is for sure: tenants will be more selective about where they live based on how safe and comfortable they feel. As responsible owners who create spaces with their tenants’ needs and safety in mind, even small changes can make a big difference in the overall quality of life for your community’s residents.
Stay Safe