By Les Shaver
This is the first article in Chief Executive Outlook, our series predicting industry trends in 2018.
Offices are in and tennis courts are out as developers look to build places where residents can “want to be by themselves with others.”
Recently NAA spoke to a number of leading apartment industry executives about their expectations for the year. Despite still-strong economic indicators, executives harbor many worries, whether they stem from market factors, government overreach, disruptive technologies, scarce labor or frothy apartment valuations. The view of 2018 is not all negative: New technology, an ever-evolving offering of amenities and a new marriage of office and apartments, will showcase the industry’s potential in 2018.
Over the next seven weeks, NAA will share thoughts of executives from companies of different sizes and areas of the country. We look at seven critical issues that will define the apartment market for 2018.
The amenities war heated up in 2017. And with blow-dry bars in Dallas communities (TCR) and art and recording studios in California properties (Camden), there doesn’t appear to be a cease fire in sight.
Ken Valach, CEO of Trammell Crow Residential (TCR) says popular amenities cater to residents who “want to be by themselves with others.” Better defined, they are residents who want the privacy of a one-bedroom home, but the perk of having the flexibility to socialize within their community.
“We find that the number of renters wanting an ability to get out of their apartment and socialize more with their neighbors is increasing,” he says. “We are doing all we can to try to encourage that type of behavior. We see venues being designed to encourage residents to socialize.”
The demand for socialization can be greater among residents who work from home. To meet that need, Gables Residential is focusing on more cross-functional areas, such as a Denver development where it installed a combination bike room-coffee bar.
CEO Sue Ansel says Gables also is converting spaces, such as its movie rooms, into more flexible space that can be used for meetings, work areas and gaming areas.
If those areas are positioned outside, it’s even better. Alliance Residential recently installed an outdoor kitchen with a Neapolitan wood fire pizza oven in one of its Orange County, Calif., communities.
“This is a first-of-its-kind amenity in the area.” President and COO Jay Hiemenz says.
Beyond providing venues for relaxation, expect to see apartment operators continue to offer amenities that cater to residents’ hobbies and, of course, pets.
“The big focus is on dogs—dog washes and dog parks,” Valach says. “On a Houston community we had an extra acre of land so we turned it into fabulous dog park.”
AMLI Residential targets hobbyists (and commuters) with bike storage and repair areas in its urban locations. It is creating “maker” rooms, which are studios and workshops where residents can come together to create DIY projects.
“Where there is a preponderance of Millennial renters, the maker room is popular,” Chairman and CEO Greg Mutz says. “Golf simulators seem to be popular in certain markets, but not everywhere.”
Ansel says movie rooms and wine storage areas have lost their appeal.
“It may be because in high-end communities we are putting fridges in units so there is no reason to use the common area to store wine,” she says. “Tanning beds and tennis courts and token fitness centers also have become outdated.”
Outside of the Atlanta area, MAA CEO Eric Bolton says tennis courts are becoming obsolete.
“For the most part, you see that amenity going away, particularly for urban set ups,” he says. “We are trying to repurpose some of these areas into more special settings, such as coffee bars, for more people to come together.”
For more information about amenities, check out “Adding Value in the Age of Amenities Wars.”