Stonebridge Builders was proud to participate in the 2017's Silent Auction and Charity Gala at Mile High Station in Downtown Denver. Our donation of a gift certificate to the Denver Performing Arts Center garnered a nice amount towards Family Homestead.
In this modern housing market, in order to become and remain competitive, multifamily communities, developers and property owners need to understand and implement the current housing trends that attract new renters and keep them happy enough to stay put. From construction and renovation trends to smart home technology, renters have made it clear what they want. Now it's time to deliver.
Floor plans in newly constructed multifamily communities are now following the same trends we've been seeing in the residential single-family housing for years. Open layouts with fewer dividing walls between the main living spaces like dining, kitchens and living areas look and feel bigger than their counterparts with the same square footage. Open floor plans are here to stay, so it makes sense to invest in already constructed properties and renovate to attract new renters. If you're considering renovating existing units to new layouts with open floor plans, call Stonebridge Builders, a Denver based commercial construction firm that specializes in apartment and multifamily renovations. Stonebridge offers expert consultations in design and renovation.
Granite Countertops used to be the "it" or "go to" kitchen upgrade. But now, builders and developers are answering the call for a more modern apartment concept that appeals to a new generation of renters. Poured concrete countertops combined with rustic looking lighting and metallic accents all create a more modern look and feel that satisfies the new renters' desire for a more urban and industrial look and feel. While traditional lighting works, replacing standard outdated lighting with a trendy new product is a low cost upgrade that will turn heads and deliver signed leases.
Smart Home Technology
The newest generation of renter is tech-savvy and they want home technology that aligns with their lifestyle. While it may seem like a poor investment for multifamily properties to adopt new in-home technology given that technology changes so rapidly, there are certain tech upgrades that are universally accepted and desired and come with minimal cost upfront, but may save money in the long run. LED lighting, web connected sensors for turning lights on and off and digital thermostats controlled with a mobile device save residents money, but also decrease the property's energy costs for common areas.
It used to be that a pool was all that was needed to create the feeling of luxury. But today's renters are looking for more. They want updated amenities that align with a more modern lifestyle. As more people are working remotely, renovating a common area to provide a business center or co-working space to accommodate residents that work from home can be a huge selling point to prospective residents. Additionally, fenced in dog runs, on-site dog washes and package delivery rooms attract residents.
If your community currently doesn't offer these amenities, Stonebridge Builders can design and build one at a low cost for a big return on investment.
Here is a blog post by our new marketing and sales coordinator, Amy Zamostny:
Yesterday, Lance and I went to the monthly PowerLunch hosted by the Apartment Association of Metro Denver. Normally (or so I’m told!) they have just average speakers that don’t really make an impact on you, but yesterday was definitely different. While it was geared towards sales and leasing consultants, Ryan Avery’s message resonated with everyone, because he gave small pieces of advice that are easy to change and better yourself.
The title of Ryan’s seminar was “Go from “A” to “THE”: Stop being a leader and start being THE Leader. Immediately my thoughts went to my alma mater, The Ohio State University. People will ask me where I went to school, and I always say “The Ohio State University.” I’m not trying to be snotty about it, but it’s the legal name. Back in 1878, they were on to something. With over 125 colleges and universities to choose from in Ohio alone, and with 2 other prominent nationally known OSUs, The Ohio State University knew that they were THE leader:
And Ryan’s program started out with examples similar to that. They showed a football team (my beloved and frustrating Cleveland Browns) and then they showed THE football team (your beloved Super Bowl Champions Denver Broncos). They showed a football player (I can’t even remember who it was) and then they showed THE Peyton Manning. They showed a basketball player (a Denver Nugget, maybe Carmelo?) then they showed THE Michael Jordan. You get the idea. You can be a builder, but you want to be THE builder, the one we want top of mind when anyone thinks of THE builder is Stonebridge Builders.
Here are a few of his thought processes to turn you from a leader to THE leader in whatever your job position is. Once we are all THE leaders of our field, then overall Stonebridge becomes THE leader of apartment renovations in Denver. Think about how each of these can apply in your daily life.
- When a leader talks, people pay attention. But when THE Leader talks, people take action.
- A leader gets ready, but THE leader stays ready
- A leader has confidence, but THE leader demonstrates confidence.
- You should always be prepared with the “4321” for your conversations.
- 4 stories to share at any time: 1 personal success story, 1 professional success story, 1 personal failure story, 1 professional failure story (but never tell a story that does not add value to your situation).
- 3 facts related to your industry
- 2 quotes related to your industry
- 1 question that you can always ask anyon
- Confidence creates competence
- People remember what they see first and feel last.
- 90% of first impressions don’t change
- Silence is the most powerful tool to use in sales
- How your body moves dictates how you speak: Every time you move backwards, it’s a sign of weakness. Step/project your body forward as you speak. (Try this in the mirror. The results are pretty amazing!)
- Eliminate 2 words from your vocabulary: Just and Only. Lose those words and your confidence will soar. i.e. It’s just me in the marketing department. I’m the only one in the marketing department. I am the marketing department.
- Words are free, but they cost you a lot
- “Do what you love because people are going to criticize you anyway.” -Eleanor Roosevelt
- Do not let one thing ruin everything
- Confidence is the by product of you being courageous. Where can you be more courageous?
A link to the preview of his speech: https://www.youtube.com/watch?v=RDKPPbt2PP4
What is The Next Generation Apartment? Read on for some interesting stats on what renters want based on results from the recent MFE survey.
Multifamily Executive Magazine recently engaged their Concept Community data partner, J Turner Research, to uncover the wants and needs of the next generation of renters in one of the largest research studies collecting over 84,000 responses nationwide. They dove deeply into the question of which unconventional amenities are renters willing to pay for.
The multifamily industry is consistently trying to come up with new ways to entice renters; upgraded interiors like hardwood flooring versus carpet, stylish lighting and trendy lifestyle amenities. But are those efforts attracting renters who are willing to pay extra for them? The clear answer from the research is No, especially given the consistently increasing rental rates over the past several years. But there are some exceptions, and if you’re looking to make some changes to your community, considering certain amenities over others may pay off in the end.
Nationwide, 84,924 residents living in 1,555 communities representing 26 apartment companies responded to the J Turner research survey. The majority of respondents were Millennials (18-34 years) at 59%, followed by Gen Xer’s (35-50) at 25% with Baby Boomers (51-70) and the Silent Generation (71 and older) combined at 15%.
The study was weighted to gain greater insights into certain topics like health and fitness amenities, electric car charging stations, bike storage and bike sharing opportunities, and Common Area and Smart Home upgrades. Here’s how they stacked up:
Smart Home Technology: Sure! If it saves money
Renters want technology options that will ultimately save them money: number one on the list is free, in-home Wi-Fi, followed by smart thermostats, and then Energy Star kitchen appliances. However, it’s not just about money, they also want technology options offer convenience like keyless electronic front entry, in-unit built-in USB charging ports, motion-detection cameras, and motion-sensing lighting. Unfortunately, the survey didn’t yield statistics on the additional monthly amount renters are willing to pay, but the desire for money-saving smart technology was consistent throughout all demographic groups and spanned all generations.
24/7 Package Lockers: They want it!
Over the past several years, the recent popularity of online shopping has substantially increased the volume of packages delivered. There is minimal impact to single family homes but has a dramatic affect in multi-family residences. When asked how many packages residents receive per month, excluding the holiday season, over 25% answered at least one, 20% said two while 17% said 5 to 10. Owners and managers are having trouble keeping up with the increased volume and often have to come up with new systems for making sure packages are delivered securely to renters. In some communities, because packages can go missing once delivered to a doorstep, residents authorize entry to their unit for package delivery in their absence. Despite creative approaches, over 27% of respondents said they have experienced problems or delays in receiving packages. When asked to rate the importance of 24/7 access Package Lockers, over 28% rated secure on site package storage as a top priority amenity and are willing to pay for it. 20% said they would pay additional rent of $5/month for this amenity.
Fitness Classes: Some do, most don’t.
The survey asked renters to express their interest in several fitness related amenities, among them were yoga rooms, spin studios, golf simulators and conventional fitness equipment with Bluetooth connectivity etc. Three unconventional fitness amenities stood out as having the greatest interest and potential revenue generating impact: fitness classes, steam rooms and walking trails. 46% of all renters are willing to pay at least $5 extra per month for fitness classes. Of the 46%, 14% said having fitness classes would be worth an additional $15 in additional rent per month. Steam rooms came in a close second with 43% of all renters willing to pay an extra $5/month. Of that 43%, 12% said a steam room would be worth $15/month extra.
Bike storage: Yes… if they have a bike or plan to get one.
Over a third (32.3%) of all renters currently own a bike and 11.8% more say they plan on getting one in the near future. With 44% of renters having a potential need for bike storage, does it make sense to create a designated bike storage space? The stats look good on this one, especially when you consider that 20% of all renters, whether they own a bike or not, are willing to pay $5/month for bike storage. 7.4% would kick in an additional $10/month and 4% would pay $15. In the end, 30% of all renters are willing to pay for bike storage, independent of bike ownership.
Bike sharing: Nah, not at this time.
The results show that while renters are enthused by the idea of a bike share program, few are willing to pay for it. Over 10% of all renters showed great enthusiasm for bike sharing. Another 22% ranked their interest at 5 on a 10 -point scale. However, when it came to putting money where their mouths are, only 26% are willing to shell out even $5/month for it. More renters are willing to pay for bike storage than bike sharing, so save the upfront and ongoing expense of a bike share and build a secure bike storage facility.
J Turner’s Survey results found that 15% of renters intend to purchase an electric vehicle within the next 5 years. Of this 15%, just over half would be willing to pay for on site charging stations. However, that still leaves 85% of renters with intention to buy and no need for EV charging stations on-site.
When considering adding new amenities that will benefit renters and bring the biggest bang for your buck, the research shows that offering bike storage, providing 24/7 Package Lockers and upgrading units with smart technology are the best bets. Stonebridge Builders specializes in common area upgrades and build outs for added amenities as well as in-unit renovations. Call to schedule a consultation today to generate more income tomorrow!
Look for full survey results of “the Next-Gen Apartment” study when they’re officially released at the 2016 Multifamily Executive Conference next month.
Last month in our newsletter we talked about how Denver is in the midst of a boom. U.S. News ranked Denver #2 in the 100 best places to live in the US. A report that analyzed employment trends in the nation's 100 largest cities, also ranked Denver second in the nation for job seekers. The local multifamily housing market hasn't hesitated to take advantage of Denver's reputation.
Over 80 new projects were completed in the last 5 years. 25,000 units are currently under construction and will be completed this year with 3,246 new apartments already delivered in the first quarter. In a typical market, that might push vacancies up and drive rents down, however Denver isn't a typical market and properties like Dakota Ridge, a Berkshire Community located in Littleton, CO. know this. Despite increases in inventory, rents are up. In March, metro Denver rental rates were 3.2 percent higher than last year. This exceeds the national average of 2.4 percent. Unincorporated Arapahoe County, Littleton and South Lakewood were among several other areas that saw increases at 5% and more. Given the market, existing projects need to look at ways to compete and hold their market share. And that's exactly what Dakota Ridge, a Berkshire Community located in Littleton CO, has done.
Stonebridge Builders has been fortunate to work with Berkshire Communities on several multifamily renovation and rehab projects. Their current project, the ongoing renovation of 480 units at Dakota Ridge, is a true partnership, with top to bottom oversight from Stonebridge and consistent timely feedback from Dakota Ridge. Property manager, Kelsey Carter explained that in order to justify rent increases, maintain their share of the market and compete with other complexes, they needed to update the look and feel of their units as well as improve function and efficiency. Based on market research, Dakota Ridge was anticipating adding an average rent premium of $65 - $225 based on the number of bedrooms in the unit. With the project a third of the way complete, a premium has been added to the rent for renovated apartments, however it exceeds their projections by as much as 37% in some cases.
Dakota Ridge deliberately chose specific upgrades based on industry and market trends as well as feedback from residents and prospects. Certain upgrades were selected more for aesthetic purpose. For example, outdated bar level counter tops were replaced with single level surfaces to align with more desirable current kitchen design features. Other upgrades were chosen for improved function, durability and reduced maintenance long term, in addition to appearance. Vinyl blinds were replaced with 2-inch wood blinds. According to Carter, resident misuse has a greater impact on vinyl blinds and from the outside looking in aged vinyl blinds give a dated, unpolished look and feel. Replacing them with wood reduces maintenance costs, extends the life of the product and provides a more cohesive appearance between the interior and exterior. In first floor units, plank hardwood flooring was installed to replace carpet and vinyl. According to a survey done by Multifamily Executive's Concept Community, the current renter wants hardwood flooring over carpet and they are willing to pay extra for it. Aware of this trend, Dakota Ridge believed they could achieve an additional rent premium of $15-40 for first floor units with plank hardwood over second and third floor units where it is not yet an option. Given market conditions, on average they were actually able to achieve premiums 40-75% higher than projected.
Choosing the right builder is one of the most critical components when undergoing a major renovation project. Berkshire Communities chose Stonebridge Builders for the Dakota Ridge rehabilitation project based on a long standing relationship and proven track record of success on previous projects. About Stonebridge, Carter says that the main thing that sets them apart from other builders is how they handle situations with unexpected outcomes. Even with a perfect plan, things can still go awry. She explains, "Stonebridge works to make things right rather than placing blame where things went wrong. They are solution focused versus situation focused. Stonebridge's attitude is, it doesn't matter how it happened or who's fault it is, it's about how are we going to make it right."
Stonebridge's President and CEO, Chris Tolar, says, "Our client relationships are equally as important as the quality of our work. Communication is paramount to the success of any project and we make that our number one priority from our first contact with the client, throughout construction and long after the completion of the project. That's how we do business."
As an industry expert and leader, Stonebridge is the natural choice for any multifamily community or apartment renovation and rehabilitation. Contact us for industry insights, planning and execution of your next project.
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When a local multifamily community was feeling the pressure of Denver's highly competitive rental market, they turned to Stonebridge Builders for help. They needed to consider upgrades not only to address deferred maintenance issues and outdated amenities, but also to justify rent increases to be consistent with local demand. In densely populated urban areas with many options for apartment living, property owners need to set themselves apart from the competition. For many, this means rehabilitation projects to bring value where others don't. By industry standards, a successful renovation project should generate rent increases between 10-30%from interior improvements, and renovations to kitchens and baths tend to generate the greatest ROI.
A great example of this strategy is Home Properties, headquartered in Rochester, NY. The company owns over 43,000 units in 121 properties primarily located in the Mid-Atlantic and Northeast. The company strategy is to acquire assets that most other developers would not be interested in. They're not looking for the newest, most attractive or luxury communities. The assets they acquire are in need of rehabilitation. The company knows that by rehabbing and renovating properties that are "a little beaten up and a little run-down" they can achieve substantial rent increases, which ultimately drives revenue. This strategy has yielded an 11.4 percent average annual total return over the past 10 years, and a 5- year compounded return of 11.7 percent.
Deferred maintenance is certainly an area of focus in multifamily renovation, however the most significant investments are made in upgrading kitchens and baths. In Denver, Stonebridge Builders helped the local company to exercise this strategy and achieve the same results. Kitchens were upgraded with updated cabinetry and counter tops, state of the art appliances and both pendant and recessed lighting to create a brighter look and feel. Baths were also remodeled with upgraded materials and lighting, which justified rent increases, encouraged retention and decreased vacancies.
If your multifamily property could use a little TLC, and you're considering a value-add project, look to Stonebridge Builders for a consultation and ultimately for a seamless and successful process.
Denver is in the midst of a boom in the multifamily market. Over 80 new projects were completed in the last 5 years, and with 25,000 units under construction this year and 3,246 new apartments delivered in the first quarter, existing projects need to step it up to compete.
Average rents for apartments built since 2010 are 60% higher than rents for apartments built in the 1970’s. Compare $1729 versus $1079 respectively and it’s clear that outdated multifamily properties need to renovate, remodel and add amenities in order to take advantage of rising rental rates.
Chris Tolar, President of Stonebridge Builders, a Denver-based commercial construction company specializing in apartment renovations says, “The bulk of our business is in multi-unit apartment rehabs. Regardless of location, property owners are feeling the pressure to upgrade and update individual units given the current market conditions. The increase in inventory of brand new units is creating a pressure to keep up and compete. “
Stonebridge Builders Business Development Director, Lance Miller, confirms that complete unit renovations and clubhouse remodels consist of the bulk of their contracts for properties with larger renovation budgets. However, for apartment communities with tighter budgets, upgrading existing common areas and clubhouses and adding amenities like BBQs, dog runs, dog washes and especially package rooms, allows them to compete with new construction.
Construction of a package room can be a big upgrade at a relatively low price point compared to other renovations. Package rooms provide a much desired, convenient service for residents. Safe, 24-7 access to package retrieval is an amenity most residents are willing to pay extra for, and can be a deciding factor when choosing a community.
Tolar says, “Since Amazon has come on the scene, with most people doing the bulk of their shopping online these days, it can be a major burden for the on-site staff to constantly have to pull packages for residents. As a solution, we convert space inside of a clubhouse or common area into a self-service package retrieval facility. For communities that just don’t have inside space to convert, outdoor/weatherproof lockers are also available. Also, we can, and have built additions to house a new package room when space is limited.”
Whether you’re considering a complete overhaul of your multifamily property, a new clubhouse or looking to add or upgrade specific amenities, call Stonebridge Builders, the industry expert in Rehabs and construction.
In older apartment buildings we almost expect to see the occasional bug or rodent. We might get startled but we’re not necessarily surprised when we come across one. We don’t like it, but we know it sort of comes with the territory. Over time, even properties without significant deferred maintenance can become safe havens for pests.
What about pests in multifamily new construction, or after renovations or remodels?
Not only do we have zero tolerance but it’s probably an indication of a much larger problem that started during the construction process. Stonebridge Builders, a local commercial builder specializing in multifamily renovation and apartment remodeling, takes special precautions during the demolition phase to ensure the environment is unappealing and uninhabitable for insects and rodents.
Chris Tolar, Stonebridge Owner and CEO, says, “During a renovation or remodel, rodents generally aren't an issue, even if they had been prior to the start of the demo. They don’t like to be around people. So, with so many people on site, they’re not attracted to the area and any places that were previously home to mice and rats are destroyed in that process.”
The demo process also gets rid of infestations of bugs like ants and roaches. Removing old materials generally kills anything living there and a thorough cleaning process prevents future infestations. Tolar says, “When we pull everything out and strip the unit down to the bones, we clean thoroughly before starting any new construction. The cleaning process prior to the rehab and more importantly the cleanliness of the job site, is critical to preventing future infestations. We’re very conscious to remove all debris and/or food that could attract ants and insects.”
Once construction gets underway, Tolar says Stonebridge has guidelines committed to design, planning and the best construction practices for pest prevention. Because bugs love water, in planning a multifamily rehab, Stonebridge suggests several simple design strategies:
Select materials that are highly resistant to moisture and decay like certain pressure treated lumber and plastic or composite materials when applicable. Simplify plumbing by making sure it’s easy to inspect, maintain and repair if needed. Insulate pipes to prevent condensation and eliminate damp spaces that attract bugs. Replace carpet that routinely gets wet and never install it in bathrooms, laundry rooms, entryways and kitchens.
Once construction is complete, moving forward property managers should routinely and thoroughly inspect individual units adopting the EPA’s strategy of Integrated Pest Management, while also consistently making sure that residents are up to speed and educated aboutpest prevention.
If you’re considering a remodel or renovation to an existing property, regardless of it’s condition, confirm that you’re using a contractor like Stonebridge Builders, one that is committed to the best practices and guidelines for pest prevention for the long term.
Across the US, builders, developers, and investors are rushing like maniacs to keep up with the huge demand for rental apartments and multifamily housing. Plenty of money is finding its way into the multifamily housing sector. Not only areinvestors and developers looking to boost home’s value, they also recognize the opportunity to earn a substantial ROI. Generally speaking, the multifamily housing market is booming because renters are looking for newer, better places to live as they bounce back from the housing market crash and they recover along with the improving economy. With that said, let’s take a look at four trends to track in the multifamily housing market.
1. Renters Seek Luxury and Affordability
Right now, renters in metro areas are looking to live as close to downtown as possible. Despite the desire for a certain lifestyle, affordability can be an issue. Unfortunately, a large portion of current renters still aren’t in the greatest shape financially, so their housing options are typically limited. Builders have taken it upon themselves to create micro apartments in an effort to fill this need. These apartments are roughly 250-350 ft.², they are quite luxurious with modern sinks and vessels, and typically lease for 75% of the monthly cost for a larger, similar style apartment in the city. As you can see, this option is still luxurious but much more affordable for lower income renters.
2. Green Leases Are a Hot New Trend
As the development of environmentally friendly apartments with energy efficient appliances, a cool roof, electric car charging stations, bike storage, and a focus on green initiatives takes shape, property managers are now asking tenants to sign a green lease. In Boston, in an effort for developers to get a green district designation, the city created the green lease. When a tenant signs this lease, he or she must agree to follow routines that lead to a sustainable lifestyle. This entails things like composting, recycling, and taking advantage of the available public transportation in the community. More and more metro areas are slowly catching on to this trend, and green leases are going to become a major phenomenon in the multifamily dwelling market sooner rather than later.
3. Tenants Now Have More Technological Control
We live in a massive period of innovation and technology is changing all the time as new advancements get released into the marketplace. In today’s modern multifamily dwelling, building owners are going to have to adapt with the changing times. As an example, many tenants are looking to take advantage of Internet TV. Yet many building owners are not ready to eliminate satellite and cable TV services. At this time, building teams have recognized the value of technological advances as far as improving a building’s sustainability is concerned. And they are beginning to embrace this new technology in an effort to provide a greener, more stable environment for their tenants and the world at large.
4. Living the Urban Lifestyle
As of now, multifamily dwelling owners hope to attract empty-nesters and millennials as their target renters. By focusing on these particular demographics, luxury property owners are making strides to develop building communities that provide the urban lifestyle. They are offering access to all of the latest technology, all of the hottest amenities like an outdoor fire pit, an indoor swimming pool, game/media room, laundry room, bike room etc. And everything a tenant could ever need is within 20 minutes of the apartment, whether they are walking or taking public transit. Again, this urban lifestyle trend is all about focusing on sustainable living.
At the end of the day, the current crop of renters is focused on living a sustainable lifestyle. As a building owner, you must utilize the four suggestions mentioned today to stay relevant in this ever-changing market.
About the author:
Wendy Dessler is a super-connector with OutreachMama and Towering SEO who helps people find their audiences online through outreach, partnerships, and networking. She frequently writes about the latest advancements in digital marketing and focuses her efforts on developing bigger customized blogger outreach plans depending on the industry and competition.
Regardless of the size of the property, whether it is luxury or affordable, urban or rural, property owners are concerned about the same things, property value and profitability. Maximizing rental income and keeping expenses low are the top priorities. When the Net Operating Income (NOI = Income minus Expenses) on a Multi-Family property increases, so does the overall property value.
Metro Denver has one of the most competitive rental markets in the country. Demand is high and supply is low. Last year inventory added by new construction was absorbed without increasing vacancy rates, in fact, vacancy rates decreased by over 1%. At the same time, apartment rents grew by 2.9%, which is slightly faster than the overall inflation rate.
To keep up with the competition and capitalize on current market opportunities, property owners need to justify rent bumps while keeping expenses and vacancy rates low. Individual unit renovations and rehabilitation of the property are the main factors in generating and justifying rent increases.
For most property owners, a complete rehab of the entire property is cost prohibitive and not feasible. However, opting for unit-by-unit renovations as apartments become vacant softens the financial burden of a complete overhaul while keeping occupancy and rental income stable.
Stonebridge Builders, a Colorado-owned and operated commercial construction company, has perfected unit-by-unit apartment rehabilitation and has made this a top priority in their business model. For all projects, the scope of work and timeframe for completion is determined by allocated budgets and projected lease turnover.
Stonebridge understands local market conditions and works diligently with property owners to ensure that unit availability and quick turnaround are maximized while costs and income loss remain low. Currently, on a larger scale, Stonebridge is renovating 600 units over a 2-year period for a large multifamily community in Superior, CO and completing 55 units over 12 months for a smaller Denver metro apartment complex. When Stonebridge recently completed turn key renovations for an apartment complex in Littleton, each unit was completed in 10 days or less, maximizing unit availability and minimizing rent loss.
Successful unit-by-unit apartment renovations and value-add projects require planning, preparation and careful oversight and management of the project. When tenant occupancy is high, exterior improvements like new siding, stamped concrete, designer patio finishes, parking lot re-paving and landscaping can supplement a lower volume of interior renovations of kitchens, baths, plumbing and lighting, new paint and flooring.
To create a strategic plan and partnership to renovate an Apartment Complex or Multi-Family Community, call us. 20 years of experience in the industry, a portfolio of successful outcomes and our commitment to providing the absolute best customer service will ensure an outstanding experience from start to finish.
In a competitive market, multifamily communities are consistently looking for ways to compete for market share. These days, combining housing and employment trends might just be the ticket for apartment communities.
43% of employed Americans work remotely at least part of the time. That figure is up 4% since 2012. The statistics get really interesting when you look deeper into the trends. During the same time period, from 2012-2016, the percent of those that reported working from home one day or less shrank by almost 10%, while those that reported working remotely 4-5 days per week grew by 7%. With rising numbers of people working from home, there is an increasing need for alternatives to the traditional office setting.
Many are choosing co-working spaces over a designated home office. People are seeking inspiring, brightly lit spaces filled with other like-minded people over solitude of their dining room table or an over-crowded coffee shop. Popular co-working spaces like Impact HUB in Boulder, WeWork in Denver and Thrive (pictured) offer amenities that attract and retain members that otherwise might maintain a home office. Super fast Internet, business-class printers, complimentary coffee and tea and private phone booths combine the comforts of working from home with the benefits of the company office.
In the Denver Metro area, people pay an average of $200-300/month for a membership or “spot” in a co-working space. A designated desk or office in one of these locations can range between $450-895/month.
Can apartment complexes and multifamily developments capitalize on this new trend? Chris Tolar, President of Stonebridge Builders in Denver, CO thinks so. Tolar says, “Communities are looking at their common areas differently these days. They’re no longer simply a shared space to have a networking event or birthday party, but they are potential opportunities to generate revenue. At Stonebridge, we are getting more requests to not only update the aesthetics, but also to design and build functional spaces that allow people to get work done.”
Given the ever-increasing numbers of people working remotely, multifamily communities can benefit greatly from the renovation or remodel of an existing common area into a functional co-working space. Building common areas that allow people to effectively work from home without dedicating any of their living space to a home office can justify increases in monthly lease rates of$150-300 at a minimum.
To design and renovate common areas for greater functionality and increased revenue, contact Stonebridge Builders for a consultation.
The new generation of renter is looking for amenities that extend beyond their own apartment and into shared and common spaces. What does this mean for the Multi-family industry? To keep units filled, multifamily properties need to respond to this new demand and keep “community” in mind when renovating existing spaces and designing new ones.
To meet these new demands, common use amenities like lobbies, laundry rooms and recreational areas should be designed for multi-use and to encourage community connectivity. For example, a space that serves as a leasing office by day that can be converted to a shared common room after hours. This space should have lightweight and easy to move furniture that residents can arrange for small gatherings or large events for many people. In designing these multi-use spaces, materials should be chosen with durability as a priority. Fabrics and floor coverings need to hold up to greater wear and tear without looking worn or used.
Real estate start up Common, has taken the concept of providing amenities intended to build a greater sense of community in multifamily living to an entirely new level by creating Coliving “homes, ” a shared-living concept similar to boarding houses popular in cities during the Industrial Revolution and the early 20th century. Co-living offers residents reduced rents in desirable, typically high cost, urban areas for a substantially reduced monthly rate. The monthly rent gets residents a bedroom, not an individual apartment. For many residents, common living rooms and kitchens and shared baths are the trade-offs for otherwise unaffordable rent. However, for others, this isn’t a trade-off, it’s a choice for a unique lifestyle and culture and the reduced rent is an additional bonus.
The biggest challenge with creating Coliving spaces is convincing developers to design buildings for this concept and purpose. The floor plans aren’t consistent with traditional multifamily properties. Sterling Jawitz, the head of real estate strategic partnerships at Common says “When we design our projects and work with developers from the beginning, whether it’s a ground-up development or rehab or adaptive reuse, we try to be very cognizant and respectful of the fact that we’re asking them to build something that is maybe not as typical as you would see in the market with studio and one- or two-bedroom units.”
Given Denver’s housing shortage and extremely tight rental market, maybe it’s time for developers to take a risk and consider creating spaces that offer renters seeking a different housing culture a place to create this new type of community?
At the very least, multifamily properties should consider using a local company like Denver’s Stonebridge Builders, to design, remodel and/or renovate existing common areas for greater flexibility, multiple-uses and to appeal to the new renter looking for amenities that extend beyond the 4 walls of their own individual unit.
A quick Google search for construction industry trends for 2017 yields a dozen articles about what we can expect in the coming year. From labor shortages to rising costs to increased use in technology, and uncertainty with the new administration, the number one trend could shape how we do business indefinitely.
Construction projects are notorious for getting derailed at numerous different stages in the process whether it’s new construction, a remodel, rehab or renovation. Construction companies are always looking for ways to streamline processes for smoother, better outcomes. Collaborative project delivery methods are taking hold as companies are recognizing the potential for lowering costs, increasing the flow of information between all stakeholders at every stage of the process and decreasing the stress and resources wasted as a result of miscommunication and lack of alignment.
Design-Build and Integrated Project Delivery are replacing the more traditional Design-Bid-Build method as it has become clear that a more collaborative effort from start to finish saves time and money and increases accountability and engagement between everyone involved.
Design-Build and IPD create collaborative, highly functioning teams from the start of a project and encourage alignment of all stakeholders, owners, architects, contractors and subs. These methods provide smarter use of resources and tend to reduce re-work that results from miscommunication and misinterpretation of plans and strategy that can result from the standard Design-Bid-Build process. For example, considering the Contractor a collaborative partner in the design phase can ensure the appropriate materials are chosen, timelines are accurate and budgets are met.
Stonebridge Builders is your collaborative partner from day one on your multi-family construction project, apartment remodel or apartment renovation. To learn more about how we bring value to each and every project we undertake, call us at 303-425-9999.
Regardless of the industry, the same principles apply to ensure successful sales and a winning client experience.
We’ve all had a nightmare sales experience in one form or another. How about the one when the sales rep starts talking, and doesn’t stop? They give every detail about the product and service without taking a breath. It’s even worse when what they’re explaining in every last detail has no relevance to your wants or needs. We know when we’re simply being “pitched” and it doesn’t feel good.
On the flip side, every one of us that has ever held a sales position has inadvertently done the very same thing that feels so bad to be on the receiving end of. And unfortunately, it’s the very thing that most likely prevented us from getting the sale. We know the product so well that we overload our prospect by explaining every detail, but we don’t take the time or make the effort to get connected to their needs. We talk too much, don’t ask enough questions and we don’t listen.
If we’re savvy enough, we might actually catch ourselves talking too much and then shift to ask a question or two. But so often, even if we do manage to catch ourselves, we just continue our pitch where we left off.
We talk too much because we know our products and services inside and out and we don’t want to leave anything out that could end up being important to the prospect. We don’t have to share every detail. Instead, we should tune in to what’s important to our client and speak directly to that.
So, how do we know what to share and what to leave out? Ask questions that get your client talking. Shift into genuine inquiry and discovery mode to uncover what their true needs are and which pain points you can address and solve.
Start with the question that will align you with their most critical issues. For example, “If I were able to meet your most pressing needs, what would they be?”
Once you have identified your prospects needs, you can tailor the conversation to speak directly to solving them. However, when you think you’re clear and ready to move on with your presentation, before you start talking again, pause and ask clarifying questions. It’s your responsibility to make sure that you have not only listened, but have also truly heard, understood and integrated what they said. Ask, “I understand your most pressing issues are X and X. Did I get that right?”
If they answer yes, then you know which direction to go in and the specific information you need to share with them. If their answer is “no” or “not exactly,” then seize the opportunity to get clear by asking more questions.
A successful sale starts with listening, listening with a great desire to learn. It takes awareness, attention, intention and tremendous effort, but the pay off is well worth it in the end. If you truly listen to your clients, they will be clients for life!
In 2015, Denver ranked 6th in the country for Top 10 cities adding jobs. This trend has continued into 2016 with growth rates of 3 to 4 percent per year. With more jobs available, Denver became one of the fastest growing cities in the nation. Last year, Denver’s population grew by 102,000, however according to the U.S. Census Bureau, the state added only 25,143 new homes, condos and apartments to accommodate those newcomers, adding 15,000 units to a shortfall that has been mounting since 2012. Colorado is currently at 55,000 homes short of where it needs to be to support the recent population growth.
With increased demand for housing, and a decrease in supply, rent growth is the natural consequence. In 2014, rent increase averaged 5.9% nationwide, this year it has been as high as 9% in markets like Denver, San Francisco and Portland. Despite higher rents, vacancy rates are low.
The conditions are perfect for investing in multi family housing. With the increased need for multi family housing also comes a greater need for Denver apartment renovations and Denver apartment remodeling for current property owners. Local commercial construction company, Stonebridge Builders, has been in business of Multifamily remodeling and Multifamily renovations and new construction for over 15 years. When considering a new purchase of a multi-family property or renovating an existing one, or a build from the ground up, contact Stonebridge Builders, the number one Denver commercial construction company, the top expert Multifamily renovations and Apartment remodeling.
The latest trends in apartment living are proving that it’s all about generation and location. As a result, many multi-family developers are focusing on urban projects to attract millennials, the largest population of renters, who want to spend less time commuting and more time pursuing activities and creating a balanced lifestyle.
Jeff Kayce, in a recent webinar for the National Association of Home Builders (NAHB), discussed emerging trends in interior and exterior spaces and how generational differences impact apartment design. He said, “It’s all about the lifestyle for today’s renters. They want the urban experience of less commute time and immediate access to various activities.” They are willing to sacrifice space for location and quality of life.
With the cost per square foot higher than in outlying neighborhoods, urban living means smaller living spaces. To offset the higher cost of urban development, multi-family property owners are consistently looking for ways to maximize rental income. With 44% of non-homeowner millennials not looking to purchase a home, but instead choosing smaller living spaces in favor of more appealing locations, storage space isn’t just a want but has become a necessity, and they are willing to pay a premium for it.
This year, Multifamily Executive’s Concept Community conducted a nationwide survey of over 84,000 renters. The findings highlighted that in-unit storage and oversized closet space are highly desired amenities that can increase rent by upwards of $75 per month. Almost half of renters surveyed (49%) said they would pay $75 extra per month for a larger closet (10’ by 6’) versus the standard sized closet (4’ by 6’.)
J Turner Research surveyed Millennials, Gen X’ers, Baby Boomers and members of the Silent Generation. The two younger generations made up 80% of those surveyed. With other hot topics, in general, the older the renter the more cost conscious they tend to be. That is not so in this case. There isn’t a significant demographic difference in willingness to pay for additional closet and storage space. Across the board, when renters were asked if they would consider paying an additional $25 per month, or $100 total for more in-unit storage, surprisingly there wasn’t a significant change in willingness to pay extra. 45% of renters were still willing to pay more rent for more storage.
Given the results of the survey, when it comes time to remodel or renovate current units or break ground on a new project, it is clear that building over-sized closets is a design feature that will pay off in the end, given that six feet of additional closet space can yield up to $100 more rent per unit per month. To generate increased revenue and appeal to all renters, call Stonebridge Builders to create the design and complete the renovations to your multi-family communities.
As a property owner and/or management company, minimizing risk and maximizing tenant safety are paramount to almost every other issue faced in multi-family housing. Committing to these 4 simple things could mean the difference between safety and liability:
Make sure your units are easy to find.
Confirm unit numbers are big enough to be seen from the street in the event of an emergency. Police and fire should be able to locate every unit without having to search. If necessary, trim branches and prune bushes and remove any and all obstacles obstructing the unit numbers.
Regularly maintain carbon monoxide detectors and smoke and fire alarms.
Every unit should be equipped with both fire alarms and carbon monoxide detectors. It’s not enough to simply have them, but critical to create a regular maintenance schedule to replace batteries and test that they are in good working order.
Service Furnace, AC, and Ventilation Systems frequently.
According to the Electrical Safety Foundation International (ESFI), over 50,000 home fires are caused by electrical issues annually. Have systems checked and serviced by certified electricians as well as educate tenants about fire prevention and safety.
For the ongoing safety of your tenants and to protect the investment in your property, consider a Turn-Key maintenance service contract with Stonebridge Builders. Stonebridge will create a schedule for all routine maintenance and be your go-to contact for any and everything service related. Call to schedule a consultation today.
Disclaimer: Do not rely on all links and citations for building accuracy. Owners should verify all current codes with their local building department and consult with a reputable General Contractor and/or Certified Professional prior to entering into a service contract or beginning construction.
Research shows that renters are often willing to pay a little bit more for extra amenities and upgrades. Multi-Family Executive’s Concept Community surveyed more than 84,000 renters nationwide to determine their wants and needs and what they were willing to pay extra for. One big question was Carpet or Hardwood? Another was parking? Will renters pay extra for a designated parking space?
As it turns out, there are some pretty clear trends, and age is the greatest predictor of what renters value and will pay for. When asked if they would pay extra for hardwood over carpet throughout all of their living spaces, the overwhelming result is that the younger the renter, the more inclined they are to say “Yes!” Roughly 50% of Millennials and Gen Xer’s would pay $75-100 more every month for hardwood, whereas only 40% of Baby Boomers and 26% of the Silent Generation are willing to do so.
OK, so they want it and are willing to pay a little extra for it, but does it make sense? It may when you consider the average Millennial rents for 6 years prior to purchasing their first home, and despite the fact that mortgage rates are at an all time low, property values and home prices have increased at a rate that exceeds affordability for most.
It’s the age-old question of cost versus value. In virtually every case, the initial cost of installing hardwood over carpet is higher. However, over time it generally proves to have greater value given how long it lasts with proper maintenance.
If initial cost is the only issue considered, carpet is the clear choice over hardwood. However, when factoring in increased rental income, the choice is not quite as clear. Adding $75-100/month of additional rental income can make up the difference in as few as one to two years.
What about parking? 67% of renters own one car. 21% own two. And 9% don’t own a car at all. Concept Community posed the question of whether or not they would be willing to pay additional rent for a designated parking spot or a dedicated spot in a carport with roof cover? Of the 84,000 renters polled, 60% said they would pay for a designated parking spot. But who would pay, for what and how much?
A specific amount was set for different types of spots. $25 for a dedicated parking space and $75 for a dedicated spot in a carport. As it turns out, there is a generational trend to paying for parking in a multi-family and apartment communities. Despite the fact that rental rates are continuing to increase, every generation was willing to pay $25 for a dedicated space over a free one. However, the older the driver, the more willing they are to pay for a space to call their own rather than search for parking daily.
To no surprise, there was far less enthusiasm for paying $75 for a space in a carport. Gen X-ers were most willing to do so, followed closely by Baby Boomers and Millennials. The Silent Generation weren’t so much. These results make sense whenconsidering 28% of Gen X-ers and 26% of Baby Boomers said they owned two cars, versus 17% of Millennials and only 15% of members of the Silent Generation.
So, does it make sense to consider charging additional rent for designated parking in your community? It probably doesn’t make sense to make it mandatory. However, if there are some renters who clearly want it and are willing to pay for it, perhaps offer it as an optional amenity at an additional cost to the standard rental rate?
If you’re interested in the full results of the Concept Community survey, The Next-Gen Apartment: What Renters Want, it will be presented at the Multifamily Executive Conference in September.
It’s news to no one that the Denver Real Estate market is at an all time high. It’s on fire right now and doesn’t show signs of slowing down any time soon. Or does it?
According to the Denver Metro Association of Realtors market trends report, in June, for the entire residential market of single-family homes and condos, there was an 8% increase, $25,600, in the median home price over last year. In the last month alone, median sold home prices increased 1.39% from the previous month. Inventory is up with active listings 24.4% higher than last month and 9.67% over last year at the same time, with sellers trying to capitalize on rising prices and low interest rates. We’ve seen annual appreciation gains in the double digits for 3 years in a row, with single-family home and condo prices up an average of 10.74% and 12.38% respectively for average sold prices. Across the board, total sales volume is $10.17 billion year to date (up 7.21% compared to 2015).
However, some analysts are claiming that we will soon begin to see signs of a much needed market correction and are predicting a plateau in the near future, even as early as 2017. Mark Boud, chief economist at Real Estate Economics based in Orange County, Ca., predicts the 3 year run in double digit appreciation in metro-Denver home prices will begin to fall off in the second half of this year. He predicts meager price increases and then small decreases by the middle to end of 2016; 5.4% appreciation in metro-Denver median home prices this year and 2.8% in 2017 and 1.8% in 2018. He doesn’t predict a similar crash in the market to what we saw 2007-2009 when job losses drove a depressed market and a rise in foreclosures and distressed sales. Boud suggests that a leveling off or plateau will require a shift in our thinking that has grown accustomed to sharp increases in home prices and property values. Anthony Rael, the Chairman of the Denver Real Estate Market Trends Committee at the Denver Metro Association of Realtors, says, “if we get anything under 5 percent in appreciation, sellers will lose their mind and think the market is collapsing.”
So, why are experts predicting a shift? Why would home prices begin to level off and possibly even decline given recent trends and no clear indication or signs of slowing down? According to Real Estate Economics, the Denver market is shifting from one that has been under-valued and under-supplied to one that is over-valued but still undersupplied. Home prices have finally reached the limits that metro-Denver income levels can support and new building and development will most likely not correct lack of supply.
This means that when interest rates increase from where they are currently in the mid-3’s, the lowest level in three years as the Federal Reserve reacts to Brexit (Source: Freddie Mac), to the mid-5’s, where they are predicted to reach in 2020, it will become more difficult to finance a home. Trends towards increased conservatism in mortgage lending and underwriting guidelines combined with the fact that builders have the strong memory of being badly burnt during the most recent housing crisis as well as being faced with more challenging obstacles to overcome with City and County development standards, indicates that the market may be even more vulnerable to a decrease in continued growth. Given these predictions, it seems wise to take the advice of Mark Boud and Anthony Rael. We collectively need to shift our thinking and expectation around continued sharp increases in metro-Denver home prices and prepare for a plateau on the horizon.
Imagine this scenario; you’ve determined the scope of a large renovation project, chosen a contractor and are about to get started. Your number one goal is a smooth, stress-free process. But is that possible on large-scale apartment rehabilitation or new ground up construction projects? It’s not only possible, but guaranteed if the right steps are taken before you begin or break ground.
The essential key to making your renovation a huge success is the quality of communication with the contractor from start to finish. The way that information is shared with your contractor and with your residents is critical to a successful process and outcome.
According to Chris Tolar, President and CEO at Stonebridge Builders, there are a few critical communication requirements for a smooth rehab project, most importantly that the project is viewed by all stakeholders as a collaborative endeavor, not an US versus Them mentality. Additionally, before any construction begins, the client first needs to communicate the full scope of work to the contractor. There is a shared responsibility to confirm that the clients’ expectations are clearly understood by the contractor, and that agreements are set in place to create a system for accountability.
Tolar also emphasizes trust as a crucial component to a solid client/contractor relationship. The contractor should be hired and trusted to manage all pieces of the project – materials, construction, scheduling, permitting, etc.
For the most efficient exchange of information and decision-making regarding the project, the client should have one designated point of contact to deal with any and all rehab questions.
Diana Pittro, executive vice president of Chicago’s RMK Management Corp, leverages technology and communication tools early in the rehab process, and then employs them at every point along the way. She starts every project with an extensive spreadsheet she calls her “Bible.” This includes everything from scope of work, detailed lists of all necessary materials, projected install dates to marketing and resident communications plans, on-site storage and rotation scenarios, costs, and analysis tabs. This spreadsheet is created and updated long before residents get notice of the upcoming renovations. Residents are informed of what’s going to happen and when at 90, 60, and 30 days and then one week before any construction begins.
“If you do it right, your residents are the last to know, but they still find out well before you start any work,” Pittro says.
On inferior renovation projects and rehabs, communication is sub-standard and work often commences before very clear agreements are set in place regarding the specific course of action at every stage of the project. When the client and contractor aren’t on the exact same page from the start, the project tends to extend beyond projected deadlines and budget, resources are poorly managed and residents are inconvenienced and frustrated, which ultimately affects lease renewal rates.
When considering improving your property with a rehab, renovation or remodel, partner with a contractor like Stonebridge Builders. Their commitment to the highest quality craftsmanship, exceptional service and consistent and thorough communication at every step of the way will ensure your project is a huge success