Multiplying the Value of Multifamily Housing September 1, 2017 Marc DeLuca It used to be single family homes were king. Having a house was the true measure of success and a symbol of familial happiness. While many still cherish the image of a larger home with a white picket fence, two key demographics—empty nesters and millennials—are thinking smaller, hipper and more convenient. Which means good-bye (or not now) 30-year mortgage and the burdens of owning a house and hello rental apartment—flush with high-end amenities and smack dab in the center of modern urban living. For some, today’s multifamily housing is the new American Dream, where you can have it all and be socially responsible at the same time. What’s the draw of these properties? A lot has to do with valuing location and lifestyle over square footage. For couples whose kids have grown and moved out, multifamily housing represents a chance for low-maintenance living and aging in place. For millennials, who compose nearly half of on-demand consumers, it’s about ready access to a high-tech, sustainable lifestyle and the goods and services they desire most. Trends like stylish and functional surroundings, built-in technology, green features, mobile offices and wellness tick off lots of boxes for 2017 renters. And walkable amenities—lots of them—may be the biggest attraction of all. Style with Purpose Great architectural design, smart floor plans and high-end finishes bring functional luxury to today’s apartments. Since people are cooking and entertaining less—thanks to the popularity of food delivery apps and online socializing—efficiency means open concepts and opportunities for green living. Kitchens featuring granite or quartz countertops, larger cabinets, and stainless steel appliances blur with living rooms, maximizing space and utility. High ceilings and tall windows, built-ins, walk-in showers and closets, and furniture placement drive unit design. “Living green” means building features that lower operating costs, while improving comfort and indoor environment quality—like solar panels that create renewable energy and smart thermostats and water-leak-detecting sensors that help prevent waste and mold. Before long, The Internet of Things (IoT) will allow for smart buildings and even better use of space. Autonomous vehicles, for one, will reduce the need for parking, which is often at a premium. Amenities for Work and Well-Being Besides stylish, purposeful design, common areas that invite people to enjoy nature, relax, exercise or work remotely are critical. Amenities like rooftop gardens and outdoor courtyards, TV lounges and spas, fitness rooms and yoga studios, and conference areas with speedy WiFi and awesome views let tenants work and achieve well-being—all from the comfort and convenience of home. Other features may include areas for pet grooming and bicycle storage and repair. Living Where It All Happens Then there’s the location factor. Today’s most attractive multifamily buildings are rising up in mixed-use developments in “hot” areas. That means ready access to freeways and public transportation and short walks to great shopping centers, entertainment venues, office buildings and restaurants. In other words, it’s the live, work, play model at its finest. Two KBS multifamily Class-A properties underway are Hardware Village in Salt Lake City, Utah and Park Central Apartments in Raleigh, North Carolina. Hardware Village will consist of two six-story buildings (466 units) that are located close to a major new retail center and the Utah Jazz’s Energy Solutions Arena. Park Central is a mixed-use development with 286 apartments above ground-floor retail space. The building is next to Midtown Park, described as the ultimate outdoor gathering place at North Hills. Given their numerous amenities and prime locations, it’s no wonder both developments are generating buzz. As one potential renter summed up Park Central, the “well-thought-out” apartments “will have everything. Must say it’s the premier residential property in North Hills.” For couples looking to downsize or millennials looking to right-size, it’s an exciting time in multifamily housing. After all, there’s no place like home. And when home has everything you want, it takes on a whole new value—even if you’re “only” renting. With premier properties like Hardware Village and Park Central Apartments, KBS is in the forefront of what the residential market wants now and is leading it into the future. Marc DeLuca is Regional President overseeing the Eastern U.S. As regional president for KBS, Mr. DeLuca is responsible for all acquisitions, dispositions and asset management activities in the Northeast, Mid-Atlantic, Southeast and Ohio. Mr. DeLuca is also chairman of the KBS Investment Committee that meets regularly to review and approve all new investments for the firm.