Investors, developers and builders across almost every metro area in the U.S are scrambling to keep pace with the growing demand for multifamily housing, especially apartment rentals. Market reports show that up to 90% of recent multifamily developments in major cities across the country have been rental apartments. What does this mean for the market?
Below, we look at some of the intriguing trends in today’s apartment rental market.
The Pursuit of the Urban Lifestyle
Rental apartments are attracting two different demographics: millennials who are attracted to the urban lifestyle and empty nesters who want to downsize after their kids have gone to school. According to Broadstone Ridge, the pursuit of the urban lifestyle is being driven by the desire for walkable and conveniently located apartment rentals that are professionally maintained and landscaped with all the essential amenities.
Much of the rental apartment trend is being fueled by young professionals who crave living in a place where everything they need and want is close by and doesn’t require them to go onto a highway. Multifamily developments are keeping pace with this trend by investing in the latest technologies and offering various luxury amenities to woo millennials and empty nesters.
More Renters are Aspiring to Luxury Living
Many apartment renters are aspiring to live in or close to downtown, but that kind of lifestyle isn’t cheap. Despite more developers and investors targeting deep-pocket customers, there is still an upsurge in demand for affordable luxury living among the middle-class. A larger number of new luxury apartment communities are targeting renters who aspire to luxury living.
To attract such renters, apartment rentals must offer a range of luxury amenities like:
● Multi-use common areas with luxury features
● Infinity pools
● Upgraded design features
● State-of-the-art gyms and yoga studios
● Wine rooms
These posh perks are becoming more of a feature in distinguishing luxury apartment rentals from other residential buildings. In markets where rental apartment affordability is particularly acute, developers are simply building smaller apartment units that are more attractive and efficient and becoming more popular among the middle-class.
Cutting-Edge Technology is Selling
Technology is quickly reshaping the apartment search and living experience and transforming the rental world. More renters are expecting their apartment complex to provide cutting-edge technology such as high-speed internet, customizable entertainment packages, smart security and other apartment technologies.
Luxury apartment developers are customizing and personalizing services to attract more renters. Offering cutting-edge technology as an introductory offer is becoming more of a trend. The biggest challenge is how building owners can keep up with the next wave of innovations. The bottom line is renters are getting more control over technology.
Signing Green Leases for a More Sustainable Lifestyle
More eco-friendly apartment complexes are being developed as renters opt for a more sustainable lifestyle. Expect to see more multifamily units offering energy-efficient buildings, composting and recycling, bicycle parking and other eco-friendly services. More developers who care about the environment are requiring tenants to sign a green lease.
By requiring tenants to live sustainable lifestyles, via green clauses in the apartment rental lease, developers are able to create an intentional community of renters who are committed to sustainability. Going green has benefits for both the renters and building owners.
Micro Apartments are Becoming Popular
As evidenced by recent real estate reports, micro apartment units of approximately 350 sq. ft. have been observed in the apartment rental market and are quickly becoming a trend in urban centers. This rise in the demand for micro apartments is attributed to the changing demographics of the buyer market.
These micro units tend to draw young singles that simply want to live in a prime location and don’t need to entertain at home. Cities like San Francisco, New York and Seattle have been early adopters of the micro-apartment trend, and it’s paying off by serving the new market.
Despite the growing demand for rental apartments across cities in the U.S, there is still growing concern about the rising cost of renting these units. Nevertheless, real estate experts continue to point at changing demographics, economic and cultural factors that they believe will continue to energize the demand for multifamily apartment rentals for several years.