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FeaturesMixed-UseRestaurantRetail

Food Halls Spice Up Mixed-Use Projects

by Jeff Shaw

Developers turn to unique eateries as ammunition in the ‘amenities arms race.’  By David Cohen In an effort to inoculate their mixed-use office and multifamily projects against the threat of e-commerce competitors, developers are increasingly incorporating food halls into their properties to attract tenants. “Food halls are the latest and greatest in the amenities arms race,” says Aaron Jodka, research director at Colliers International in Boston. “While most buildings are able to find ways to add bike storage, a gym, conference spaces or game rooms, not everyone can accommodate a food hall. It’s a unique differentiating factor in the marketplace, and we are starting to see that really expand.” There isn’t a single accepted definition of a food hall, but most agree that it is a collection of local artisan restaurants and other boutique food-oriented retailers under one roof. Some are large and include 30 or more vendors, others are smaller or specialize in only one type of cuisine. Some food halls are more bar-centric and include a variety of drink offerings, others focus more on the dining aspect.  Above all, a food hall can be differentiated from the traditional mall food court by the uniqueness of culinary offerings. A …

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FeaturesMultifamilyStudent Housing

Priced Out: Adding Affordable Units to Student Housing

by Jeff Shaw

Student loan figures indicate a growing affordability problem in higher education. The Federal Reserve reports that student loan debt in the United States is almost $1.6 trillion today, with 42 percent of people who attended college — which represents 30 percent of all adults — incurring at least some debt from their education.  With a focus on technology-based degree programs, the cost to attend college is rising. But it’s not just tuition that’s going up. According to College Board, the cost of housing exceeds the cost of tuition at four-year, public universities. For the 2017-2018 academic year, students paid an average of $9,970 for in-state tuition while room and board ran $10,800. “There’s a real need to get to the middle of the market and to build quality housing that students can afford,” says Joe Coyle, president of Michaels Student Living. Michaels Student Living is a specialized area of expertise within The Michaels Organization, a leading affordable housing developer in the United States. “Housing is a big part of what contributes to the high cost of attending college. We have to work together to find ways to mitigate this. It’s going to become more and more important.” While the student …

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FeaturesMultifamily

CBRE: U.S. Apartment Turnover Rate Reaches Lowest Level in 20 Years, Signaling More Lease Renewals

by Kristin Harlow

LOS ANGELES — Multifamily turnover, the percentage of total rented units not renewed each year, fell to 47.5 percent in 2018, its lowest level in at least two decades, according to CBRE. Five of the six major multifamily REITs recorded lower turnover in the first quarter of 2019 than the prior year. For AvalonBay, Camden, Equity Residential, MAA and UDR, the average annualized first-quarter rate fell by 200 basis points to 42 percent. Essex was the exception with a 100-basis-point rise to 41 percent. The REITs’ historical data also confirm that turnover has been falling for many years, argues CBRE. For example, Equity Residential’s first-quarter annualized rate of 39.2 percent was its lowest level since at least 2005. Benefits of lower turnover rates generally outweigh disadvantages. Turnover hurts a property due to loss of rent while the unit is vacant, possible rent concessions needed to release the unit and expenses to make it ready for a new renter. Turnover costs are at least $1,000 per unit and can easily rise to more than $3,000, according to the National Apartment Association. Yet, owners often achieve more rent growth when units turn. Higher turnover can be advantageous during periods where the market …

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FeaturesHeartland Feature Archive

Subcontractors Grow More Selective as Labor Market Continues to Tighten

by Kristin Harlow

Rising materials costs and the shortage of skilled workers continue to pose a challenge for general contractors. In turn, these conditions have enabled subcontractors to be highly selective about the projects they are willing to accept. “For the first time in many years, we have found ourselves encountering subcontractors who have passed up on project opportunities because the reality is that resources within qualified subcontracting firmsare finite as well,” says Anthony Johnson, executive vice president and industrial business unit leader with Chicago-based Clayco. Given this reality, contractors are relying on existing relationships with subcontractors and spending more time on pre-construction phases with developers in order to manage costs. “The most important thing we can do in this landscape is communicate with clients and manage expectations,” says Chuck Taylor, director of operations with Lemont, Illinois-based Englewood Construction. “For example, we make it clear how important timing is and that pricing could change from what we originally estimate if there’s a significant delay in a project due to design revisions or financing.” Englewood specializes in the construction of retail and restaurant properties. Most subcontractors that the firm works with are currently charging what Taylor describes as high rates and are operating at …

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FeaturesHeartland Feature ArchiveMultifamilyNortheast Feature ArchiveSoutheast Feature ArchiveStudent HousingTexas & Oklahoma Feature ArchiveWestern Feature Archive

Generation Z Renters Reshaping Student Housing Market

by Katie Sloan

With some of the oldest members of Generation Z coming onto the rental scene seeking out their first college and post-college apartments, developers and property owners must start paying closer attention to this new audience. While Gen Z and millennials have quite a bit in common, they also differ in some fundamental aspects and demand different standards of living in residential spaces. Just when owners and property managers are finding their footing with millennials, Gen Z will reshape the rules. Who is Gen Z? Gen Z is the population born in and after 1995. With the oldest members having just graduated college in the last few years, this is the beginning of their descent on the rental market. Since they came of age during the Great Recession and watched their parents struggle to make ends meet, Gen Z has a more conservative approach to spending compared to millennials. They are also less likely to uproot and relocate for a new job, as telecommuting and the freelance career path allows them to create their dream job right where they are. Gen Z is a generation that has grown up with standard two-day delivery, on-demand TV shows, movies downloaded within a minute …

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FeaturesHeartland Feature ArchiveMultifamilyNortheast Feature ArchiveSoutheast Feature ArchiveStudent HousingTexas & Oklahoma Feature ArchiveWestern Feature Archive

Priced Out: Adding Affordable Units to Student Housing

by Katie Sloan

Student loan figures indicate a growing affordability problem in higher education. The Federal Reserve reports that student loan debt in the United States is almost $1.6 trillion today, with 42 percent of people who attended college — which represents 30 percent of all adults — incurring at least some debt from their education.  With a focus on technology-based degree programs, the cost to attend college is rising. But it’s not just tuition that’s going up. According to College Board, the cost of housing exceeds the cost of tuition at four-year, public universities. For the 2017-2018 academic year, students paid an average of $9,970 for in-state tuition while room and board ran $10,800. “There’s a real need to get to the middle of the market and to build quality housing that students can afford,” says Joe Coyle, president of Michaels Student Living. Michaels Student Living is a specialized area of expertise within The Michaels Organization, a leading affordable housing developer in the United States. “Housing is a big part of what contributes to the high cost of attending college. We have to work together to find ways to mitigate this. It’s going to become more and more important.” While the student …

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The Pier at CCU is located near Coastal Carolina University.
FeaturesMultifamilyStudent Housing

Is Pedestrian-to-Campus Still the Future of Student Housing Development?

by Jeff Shaw

One of the most crucial questions in today’s student housing development market is the question of location. A number of prominent companies have made the ability to be walkable to campus a big issue when it comes to a property’s resale value. Other developers, meanwhile, eschew walkable locations in favor of value for tenants.  For a time, a big industry trend was amenity-laced properties located a few miles from campus, selling a lifestyle, and typically an oversized pool, in exchange for a slightly longer campus commute. More recently, a countertrend has emerged, with builders catering to students looking to walk across the street to class. “Beachfront property” is often the preferred term for developers of this mindset.  Is close proximity still the dominant trend? A group of student housing developers and architects debated the topic during a panel discussion at the 11th annual InterFace Student Housing conference, held in April in Austin, Texas. David Senden, principal of KTGY Group Architecture + Planning, served as moderator and opened with a simple question: What exactly is urban infill, and what is cottage product?  Todd Gaines, vice president of development at Austin-based Aspen Heights Partners, answered that his definition of urban infill is …

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FeaturesMultifamilySeniors Housing

Despite Headwinds, Demand Remains High for Seniors Housing, Says CBRE Survey

by Jeff Shaw

LOS ANGELES — Appetite for seniors housing remains strong despite higher operating costs, with nearly two-thirds of investors planning to increase their buying over the next 12 months, according to the CBRE U.S. Seniors Housing & Care Investor Survey. CBRE is a global real estate services firm based in Los Angeles. The survey polled more than 100 seniors housing investors, developers, lenders and brokers throughout the United States. The results reflect pricing and sentiment at the end of 2018. The majority of investors (62 percent) aim to expand the size of their portfolios over the next year. More than one third (34 percent) are expecting no change to their level of acquisitions. The percentage of investors who plan to increase (or maintain) their level of investment in seniors housing is essentially unchanged from last year’s survey. “Senior housing demand should remain at relatively healthy levels through 2019, given expected steady economic growth and lower mortgage rates,” says Jeanette Rice, Americas head of multifamily research at CBRE. “Demographic trends are positive for the asset class, with the baby boomers nearing the traditional age for seniors housing and nearly 9,000 turning 70 every day this year.” Investors remain focused on “lifestyle” seniors housing, …

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FeaturesLeasing ActivityOffice

Coworking Poised to Overtake Tech as Top Office Leasing Sector in 2019, Says JLL

by John Nelson

CHICAGO — The U.S. office market registered 34.8 million square feet of leasing activity larger than 20,000 square feet during the second quarter, according to JLL’s latest Office Outlook report. This continues the established absorption trend of 30 to 35 million square feet per quarter. Among office-using sectors, tech and coworking remain dominant, having both exceeded the 10 million-square-foot mark halfway through the year and representing 31.1 percent of all activity year-to-date. The year-to-date gap between tech and coworking narrowed even further in the second quarter as WeWork, Spaces and other coworking operators continued to rapidly expand. At the current rate of growth, coworking is likely to be 2019’s largest driver of office leasing. Consolidation and mergers-and-acquisitions, combined with a severe lack of skilled employees, have tempered expansion potential for tech companies, according to JLL. About 58 percent of transaction volumes in the tech sector represented growth or expansion. In comparison, expansion as a share of tech leasing activity routinely reached 75 to 80 percent in 2016, 2017 and early 2018. Densification and office space efficiency are still weighing on legal, consulting and other professional services firms, although active preleasing and relocation is boosting total activity from these users. JLL’s …

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FeaturesNorth CarolinaOfficeSoutheastSoutheast Feature ArchiveUncategorized

LED Lighting: An Amenity With Immediate Payback for Office Owners

by John Nelson

DURHAM, N.C — The term “environment” is typically thought of as being strictly outdoors, but for office owners, investors and tenants, the interior of office buildings is an environment unto itself. And like planet Earth, an office environment needs investment in order to protect its inhabitants. “We believe the workplace, where employees spend eight hours a day or longer, must provide a healthy and stimulating interior environment,” says Dan Goldstein, managing partner with Accesso Partners LLC of Hallandale Beach, Florida. Goldstein, whose 15-year-old company owns Class A office towers spanning 15 million square feet in major U.S. cities, contends “it makes good business sense to invest capital in an interior environment where employees are productive, efficient and above all, healthy, which cuts down on illnesses and absenteeism and contributes to job satisfaction.” Accesso Partners is doing more than just preaching. In Durham, the institutional commercial real estate fund recently installed a new lighting solution at its 10-building, 690,520-square-foot space within the Meridian Corporate Center, which is adjacent to the famed Research Triangle Park. The result has been brighter offices that are easier on the eyes and more conductive for close-up, meticulously detailed work. There is also a flipside to that …

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