Baby boomers, young professionals demanding urban housing.

by admin

What area is your expertise?
The St. Louis Metropolitan Area

What trends do you see presently in multifamily development in your area?
Many of the St. Louis area developers are including residential components (both rentals and sales) in their developments. The desire to work, live and shop in the same area is desirable in the St. Louis region — from shopping, to office, to education, to entertainment.

Who are the active multifamily developers in your area?

Local office and retail developers are adding residential components to their developments.

Please name one or two significant multifamily developments in your area. What impact will these projects have on the market?
Clayton is seeing an increase in condominium construction as well as housing units becoming a part of retail and office developments. For example, Maryland Walk opened with 99 high-end condominiums and has added a retail component. The Crescent development includes 72 luxury condominiums and 26,000 square feet of retail. The $73 million, 390,000-square-foot project was developed by Mark S. Mehlman Realty.

Where is the majority of development taking place? Why is this area doing well?
Condo and apartment development and redevelopment are on the rise in the Central Business District as a result of revitalizing the downtown area. Over 4,500 new housing units (rentals and sales) have been added to the downtown area since 1999. Over 2,500 additional units are planned or proposed including both new construction and historic renovations.

What area do you expect to be the next big development market? Why?
The Clayton submarket will be the next big development market. With many mixed-use developments planned, we will see many of them having not only condo or apartment components included, but also hotel components.

What areas are doing well in terms of apartment leasing? Which areas are struggling with leasing?
The St. Louis urban areas (the City, Maplewood, Clayton, Richmond Heights) are very desirable to the young professionals and baby boomer retirees. The convenience of shopping, entertainment and jobs in a close proximity is desirable. With the rise of fuel, I see this trend continuing for some time. Surrounding suburban areas are not as attractive to young professionals as they once were.

Please give a measure of apartment vacancy rates.
The apartment vacancy rates in the St. Louis region ranges from 3 to 5 percent.

Please give a measure of condo sales activity in the area.
With the spillover of the subprime fallout, condo sales have slowed slightly. The St. Louis area has experienced less housing difficulties than other regions in the U.S.

What impact do current interest rates have on the apartment and condo markets? What predictions do you have for interest rates and their effect on the multifamily market in the next year?
Low interest rates typically induce sales in the residential market. With the current market conditions, residential sales have suffered pushing up occupancy rates in multifamily as well as it has spurred some developers to add rental units in condo developments.

What is the status of job growth/(un)employment rates and what bearing will it have on the multifamily market?

The unemployment in the St. Louis Metropolitan area was 5.3 percent in April. If unemployment rates increase, less people will be able to afford housing and/or quality for multifamily rentals.

Submitted by Louis Ojile, vice president with the St. Louis office of Solon Gershman, Inc./ONCOR International.

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