Demographics are creating a surge of urbanization and increased interest in multifamily rehab developments. According to the Census Bureau, 2013 saw 2.3 million more people living in metro areas than in 2012, with 269.9 million people now living in cities and their surrounding areas. Shifts in different renter appeals are driving urbanization and thus, there is great desire for revitalization and rehab in urban areas.
The Demographic Demands
- Baby Boomers Make Their Move: Now finding themselves to be empty-nesters, many Baby Boomers are downsizing from their suburban homes and seeking apartments in a more urban setting. A report released by the Federal Reserve Bank of Kansas City revealed that Boomers will be responsible for 60% of renter increase by 2023. Like their millennial multifamily counterparts, Baby Boomers have a desire for community and easy access to coffee shops, community centers and restaurants and this is driving more multifamily development to accommodate their needs.
- Multifamily Millennial: The millennial generation has a growing interest in urban living and multifamily housing. This generation is graduating college, moving out of their parents' homes and are seeking living close to the jobs they want to pursue. They don't want to spend the weekends gardening and mowing their lawn - they are interested in events, food, nightlife and all that a city has to offer. As this Midwest Real Estate Journal article discusses, this generation doesn't find home ownership as attractive as past generations: "They've seen their parents struggle with a drop in home values, leaving many of them underwater on their mortgage loans. Many Millennial's, then, are opting to put off owning a home. They’re concentrating today on renting."
Interest Is Strong in the Rehab Market
Economic and demographic shifts are causing a greater demand for multifamily housing as different generations are starting to become more attracted to urban living. Because of this urbanization, lenders are increasingly seeking new construction and rehab deals in today's market and this kind of development is thriving. For example, I'm currently focusing on the Brookside Village development - located at the corner of East 68th Street and Troost Avenue ( in the Kansas City area), immediately north of the Rockhill Greens development that has already begun construction. The current 9-story medical office building, referred to in the past as Highlands Professional Tower, will be re-purposed into market rate senior housing. There will also be two new additional buildings built on the north and south sides of the current parking garage. This development is
going to offer people from the Armour Heights, Brookside and Waldo neighborhoods a maintenance provided place to live that will allow them to stay close to where they've spent much of their lives. It will be a gated community and will offer many amenities including: indoor pool, bowling alley, pool tables, movie theater, community garden, sport court, putting green, bocce ball and more. See the current Brookside Village rendering above.
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| Brookside Village |
Contributor:
Matt Ledom
Sales Associate - Multifamily
Block Real Estate Services
Block Real Estate Services
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