A full 90% of new multifamily construction today is rentals according to one study. For the last several years, demand in multifamily has outpaced new construction, causing some places to see huge spikes in rent prices. Still demand has not slowed while prices have been growing by up to 8% year-over-year. Experts predict rent prices to normalize around 2%.
As prices begin to settle, renters will be ready to move to a new place, making the determining factor for apartment hunters the difference in the quality of amenities offered. Today’s tenants are looking for more than nice landscaping and spacious bedrooms. Tenants today want amenities and lots of them. We looked at some of the top trends in multifamily and found 7 amenities trending.
What Tenants Want
First, understanding today’s tenant is important to providing the right types of amenities. Millennials are attracted to the convenience of advanced technology. They expect that same kind of convenience in their living environments (grocery store within walking distance, public transportation just a few blocks from the apartment, office or work space accessible by light rail or bus). The more walkable the location, the more attractive it is to young renters.
That said, the young are not the only ones influencing multifamily. Boomers, retirees, and 55+ active adults are also trending toward more urban lifestyles where entertainment, work, and home are all located in the same vicinity. Renters are also coming from diverse backgrounds including HNWI (high net wealth individuals) pushing the types of luxury amenities higher than most renters have been accustomed to but are now demanding.
“There’s a lot of competition for the ever-growing need for more student housing and this has attracted more players who have come up with creative ways to improve the students’ experience. As a result, tenants expect much more in terms of lifestyle amenities than they did just a few years ago and landlords are constantly having to up their game to keep ahead of the field ,” says Eric Sackler, Director for Coldwell Banker Commercial NRT in Los Angeles. “Today’s properties are constantly elevating their amenity offerings to stay relevant and to attract the best tenants.”
7 Amenity Trends in Multifamily Attracting Tenants
These are just some of the amenities becoming standard in multifamily. Most developers are incorporating several of these amenities to set themselves apart and attract long term tenants.
#1: Activities Space and Luxurious Common Areas
Gyms are not the only community spaces tenants want. New developers will need to think about adding an on-site café, workspaces, and lounge areas. Some unique ideas include community gardens and wine tasting rooms, community theaters or apartment pubs or pool halls.
#2: Convenient On-Site Package Delivery Systems
More than a quarter of the workforce today does not work from an office. Mailing letters or shipping packages usually requires a trip to a FedEx or post office. One amenity attracting young professionals are on-site package delivery systems where packages are received and signed for in real-time through an alert sent to a tenant’s smartphone. Packages can also be sent out from the apartment with pickups scheduled from the apartment’s online platform.
#3: Multi-Modal Transportation Options for Residents
Parking lots are disappearing to make room for more pedestrian friendly options. Most millennials do not own cars. They bike, walk, or ride to work. Some high-end multifamily developers are including bike repair and storage “shops” in their buildings or providing ridesharing pickup and drop-off locations on-site.
#4: Advanced Tech Security and Monitoring Systems
If a security alarm goes off when no one is home, there is not much that can be done. Tenants expect apartment owners to provide advanced security using technology and remote monitoring that works with their smartphones.
#5: Customizable Smart Building Technology
Smart technology is not just convenient; it is standard now in new multifamily developments. The “smarter” a building is, the more attractive it is to tech savvy renters. Smart HVAC and universal high speed Wi-Fi is standard. What tenants want even more is to be able to customize the smart tech in their individual apartments according to their preferences including light, sound, and heat or air conditioning.
We recently shared some of the amazing things we learned about Smart Home technology from the CES show here.
#6: Energy Saving, Eco-Friendly Building Features
Real savings can be had when a building increases its energy efficiencies. Those savings can and are being shared with tenants as an incentive. Energy from solar powered charging stations on-site can be reused in the building and sold back to the grid for tax credits that can be shared with tenants that take advantage of eco-friendly building features.
#7: Health and Wellness Amenities Galore
Offices are using health and wellness to improve employee productivity. The same features can improve the quality of life for residents in multifamily buildings. From relaxation and massage rooms on-site to heated therapy pools, there are dozens of ways to cater to the health and wellness amenity trend. One amenity taking over luxury apartments are artificial lagoons for fishing, swimming, and playing. Expect this to move to middle income renters as well.
Coldwell Bankers Commercial, Agents are available to help you navigate commercial real estate within Billings, MT.