Investors continue to exhibit growing interest in the Southeast, as capital and jobs are finding their way to the region and promoting higher yields than other regions of the United States. Top Southeast multifamily markets include Austin, Charlotte, Nashville, Raleigh, and Tampa.
Other highlights from the conference include:
Amenities Revolutionizing The Near Term
A panel examined the development of amenities in recent years as well as where they are headed, with the most prevailing trends including land choice, future proofing, and app technology.
- Southeast real estate experts find location and transit access to be of greater value than a highly amenitized property, with walkability and light-rail access to get to the urban core seen as especially important, as the new urban luxury is time.
- Future-proofing is also vital in multifamily development as technology is constantly changing.
- Multifamily experts also consider app integration necessary to enhance the tenant experience. App technology can provide synchronicity in living spaces, with the best full-solution providers offering sidewalk-to-sofa technology in a single place.
Coliving Ending Urban Lonelieness
The panelists described coliving as “keeping the good parts of living with roommates but getting rid of a lot of the annoyances.”
- Coliving began in gateway markets and has since expanded into the Southeast.
- With conventional studios now coming to market at $1,600 per month, coliving creates the opportunity to live in a highly amenitized building with shared living spaces and rental costs 30-35% below conventional apartments but with a competitive amenity package.
- Beyond amenities, a key differentiator with coliving is the sense of community, allowing new residents and digital nomads to break down the isolated feel of a new city.
From an investor and owner perspective, coliving is an attractive niche because it has very limited competition and is less susceptible to oversupply, while offering above-average returns.
Construction, Development, and Value-Add
A panel of developers emphasized the worsening effects of the construction shortage, materials and land prices, and time issues on overall development costs. Current trends in development over the last two years include smart technology, the “new suburb,” and right-sizing rental units.
- Panelists agreed that Class-A tenants want smart homes that incorporate usability and technology integration in flexible space.
- Multifamily developers are capitalizing by providing urban convenience in suburban markets to create the “new suburb.” With transit improvements and ride-share providers adding value and access to areas outside of the urban core, modern renters desire the lifestyle of an urban core anchored in neighborhoods with highly rated schools and low crime rates.
- Developers are reconsidering past notions on required rental unit sizes and amenity offerings, implementing strategies that accommodate different renter segments that may not see value in having a big screen TV, bathtubs, or ovens compared to historical preferences. Even Class-A developers now look at ways to cut costs by deprioritizing amenities that do not drive value in favor of lower rents, as rents cannot be pushed much further.
“Big A” Affordability & Workforce Housing
Panelists focused on affordability in Atlanta and the overall effectiveness of inclusionary zoning.
- With the percentage of cost-burdened renters growing and less affordable units in the pipeline, the City of Atlanta created the One Atlanta initiative that plans to invest $1 billion and create 20,000 units of affordable housing through 2026 by utilizing 45 action items to subsidize affordable housing, streamline permitting, and reduce land costs.
- Atlanta also enacted a mandatory inclusionary zoning ordinance in January 2018, requiring developers to designate 10% of all units as affordable at 60% AMI or 15% of all units as affordable at 80% AMI at any site within ½ mile of the Beltline corridor and in four neighborhoods in the Westside.
- Charlotte and Miami were named as two Southeast markets making strides in affordable housing, as they both have long-term plans in place to move the needle in the direction of addressing their affordable housing needs.
For more, check out our latest Monthly Market Report.
Bisnow’s Annual Multifamily Conference – Southeast was hosted by Westin Buckhead in the Buckhead neighborhood in Atlanta.