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| WaterCrest at Lenexa City Center (A Block Real Estate Services Multifamily Development and will be managed by Block Multifamily Group) |
Boomers Are Moving Towards Multifamily
This report issued by the Federal Reserve Bank of Kansas City reveals those renters age 65 and older will be responsible for almost 60% of the increase in apartment renters by 2023. Just more than half the increase came in the 45 to 54 and 55 to 64 age group, the report also tells. What does this mean? Though younger demographics will continue to fuel a demand for apartments, baby boomers must not be forgotten in multifamily development mix. The U.S. Census Bureau projects that the nation’s older population will double to 71.5 million by 2030 as Baby Boomers start to turn 65 in two years. If one percent of that population turns from home ownership to rental, that’s nearly 720,000 new renters coming into the market.
There is an Opportunity To Cater to Their Needs
With such a significant focus on multifamily development for millennials, there is a huge opportunity to cater properties and amenities to the needs of Baby Boomers and Gen X. These renters may often feel left out in a world that caters apartment amenities to a younger generation. By keeping in mind amenities that are unique to Gen X and pre-Baby Boomers, developers have a big opportunity to attract these higher-paying tenants:
- Remember the need for one-story buildings, elevators in place of stairs, etc. to allow pre-Baby Boomers to enjoy an active lifestyle with ease.
- Storage units could be an attractive amenity for Gen X as many of them are downsizing from bigger places to smaller apartment living.
- Wi-fi, proximity of businesses, green space, a sense of community are all amenities that are seen as attractive among boomers and younger generations alike.
They Are Willing to Pay For Amenities
As multifamily continues to be on the rise, a heightened emphasis on amenities has developed. A 2013 NMHC Survey showed that apartment residents want amenities and they're willing to pay for them. This is especially important for higher paying Gen X residents. In this same survey, more than 75 percent of respondents at Class A properties cited community amenities as a high priority, compared with 58.8 percent in Class B properties and 49.2 percent at Class C properties.
"Green" Living Is Also Important
The environment is also becoming increasingly important to all tenants. In this 2013 survey, 64% of tenant respondents said that they would be willing to pay more for energy-efficient features. Green certification and installing energy-efficient appliances can also be an appealing amenity feature to potential Gen X tenants who are enthusiastic about saving energy on behalf of the environment and their wallets.
In addition to making sure properties offer the most appealing amenities for desired tenant demographics, BMG looks to pursue developments in markets where there is an identified need and a clear investment story. BMG is also working this year to acquire additional management organizations that exhibit a stable portfolio and quality of income that could be enhanced by leveraging the platform BMG has created. As of year-end, BMG’s management portfolio exceeded 1,800 units. With two new acquisitions in early 2013, and with projects under development in New Mexico and Kansas, BMG will continue to push toward building a management portfolio exceeding 10,000 units by year-end 2016.To learn about all of Block Real Estate Service's offerings, visit our website here.
Contributor:
Justin Larson
Vice President
Block Multifamily Group
Cool post very informative. I just found your blog and read through a few posts although this is my first comment, i'll be including it in my favorites and visit again for sure.
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