Trends in multifamily development and demand mirror both changing mentalities in a post-recession era and dynamic population shifts. There are an estimated 80 million echo boomers (Americans born between 1980 and 1995) that are beginning to move out of their family homes or college dorm rooms and into a very challenging job market. Most rent because they are either unable to buy or they consider owning a home low on the list of their financial goals at this stage in their lives. Even those older than the echo boomers have changed their ideology as it relates to homeownership after suffering through a collapsed housing market. The result of these shifts has kept the demand for multifamily housing high on both local and national levels.
Current apartment developments are also responding to the demand for affordable luxuries. They now offer green efficiencies that will reduce utility bills and access to transit nodes that cut down on gas costs. Amenities such as fitness centers, coffee shops and pools with outdoor areas that allow residents to socialize on-site have become commonplace.
In the Greenville market, the downtown apartment activity is bustling. Hughes Investments recently delivered the Riverwalk at Riverplace, a mixed-use development that consists of 44 units as a New Markets Tax Credit deal. Davis Property Group’s 100 East project consisting of 48 units will boast a rooftop pool. Both are reported to be fully pre-leased and are good indicators for what current apartment demand looks like in our rapidly changing market. Subsequently, there are two new proposed developments with no less than 300 units combined now pursuing the downtown area.
However, the primary focus for future development is the Woodruff Road/ICAR area. This is the major retail channel of Greenville and home of Clemson University’s International Center for Automotive Research (ICAR) campus. Several new properties have been proposed in this area, including Birmingham, Alabama-based Arlington Properties’ 241-unit Tapestry Park at Verdae; Greenville-based Easlan Investment Group’s 244-unit The Vinings at ICAR; Columbus, Georgia-based Flourney Development’s 346-unit Verandas at The Point off of Woodruff Road; and Menin Development’s 200-unit Magnolia Park on Woodruff Road. The addition of jobs at TD Bank’s new location and the growing success of the ICAR campus will continue to increase the need for housing in this area.
In addition, the new medical school on Grove Road, The University of South Carolina School of Medicine – Greenville, is expected to draw new demand for housing along that corridor as well.
With all of these new projects not expected to deliver for several years, population growth and job growth will continue to be the metrics to watch. According to the Manpower Employment Outlook Survey, the Greenville MSA’s job outlook was just forecasted as the best in the nation for the second quarter in a row. The survey reports that 26 percent of local companies plan to hire more employees from April to June. That is powerful news for our market. Multifamily vacancy rates are hovering at 7 percent, but are expected to continue declining as demand becomes pent up while new product is just breaking ground.
Even though the housing market is showing signs of a slow recovery, the rental market is expected to remain very strong and investors who once were only willing to invest in large core markets are now actively seeking a footprint in flourishing tertiary markets where demand is high and supply is scarce, just like Greenville.
— Kay Hill and Tony Bonitati are brokers in the multifamily division of Greenville-based NAI Earle Furman.