Developers are always looking to maximize the price per square foot of each apartment unit to strengthen their multifamily investment. This is one of the reasons why micro units are so appealing to developers, as they command a very high price per square foot in many markets across the country. Larger, ultra-luxe units also command a similarly high price per square foot, yet are less frequently deployed in new developments. To know which is a better unit to build, we must first look at the renter profile of each apartment type.
As rents have increased in metropolitan areas, renters are making a conscious choice to live in smaller apartments to be in the most desirable neighborhoods. Being centrally located to work, restaurants and nightlife is important to luxury apartment renters. Typically ranging from 250-400 square feet, a micro unit lifestyle is not for every renter. This renter profile is often a business professional who is splitting their time between cities and who prefers not to stay in hotels, or someone looking to pare down and live clutter-free. Budget-conscious renters who value location above all else are also attracted to micro living.
Often, for the same rental price in an alternative location in a city, a micro-unit renter could live in an updated, larger apartment. However, the mindset of a micro-unit renter is quality over quantity, and community-building amenities are crucial to micro apartments. When units get smaller, the common space becomes more important. Micro renters are seeking spaces to work and socialize. The most successful micro-unit developments offer great community-building amenities like full-service gyms, on-site food and beverage and co-working spaces.
These apartment units range from 1,800 to 3,500-plus square feet and have a unique renter profile. The most common renter demographics for this unit type are empty-nesters coming from affluent suburbs, high-end professionals who want to retain anonymity by renting versus owning or families looking for larger space in an urban environment. Regardless, income levels are high, and this is a renter by choice.
To appeal to these renters, minimize the need to “upgrade” upon move-in. White-glove service is essential, along with custom-designed finishes, high-end chef’s quality kitchens and abundant living space. The empty-nester renters are typically coming from 5,000-plus-square-foot homes. Developers need to utilize the space to amplify the living room with dining area and include a master suite. The master suite must accommodate larger-scale furniture and provide impressive closet space and a “wow” factor master bath. Ideally, at least two bedrooms will comfortably accommodate a king-size bed.
This renter will pay for curated programming and service that allows them to have a hassle-free living experience. Building amenities are important, but the service provided by the management team, including concierge, resident service coordinator and highly professional door staff, is an attribute this renter demographic seeks.Read the Full Article
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