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Multi-Family | AREA Real Estate Advisors

Trend Alert: Apartment Living Isn’t Just for Millennials. Their Parents are Moving In.

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By Grant Kollman – Vice President, Director of Multi-Family

If one thing has become increasingly clear to me in recent months, it’s that millennials and baby boomers have quite a few things in common.

Both generational sets are renting apartments in higher numbers and for longer duration than ever before. Whether starting a career or empty nesting, both are seeking a lifestyle that offers convenience, and community in Kansas City and across the country.

In fact, a recent cnbc.com article supports this saying that from 2009 to 2015, the number of renters 55 and up increased by 28 percent, while those 34 or younger only increased 3 percent. The same report said that more than 5 million baby boomers across the nation are expected to rent their next home by 2020.

So while renting was previously considered to be a stepping stone to home-ownership; in terms of investment, commercial property owners should be prepared to answer the needs of America’s two largest generations. What are those needs? Amenities, including cost savings, flexibility, location, and maintenance-free living.

For Millennials in the process of building their careers, the ability to relocate is a significant factor. We are seeing that if they are in a financial position to purchase a home, they may rent to have more flexibility to take advantage of new job opportunities or transplant themselves to experience a different city.

Likewise, empty nesters are ready to give up home maintenance tasks, including yard work and repair, so renting can be an appealing solution. If something goes wrong, all they have to do is pick up the phone, and the property manager will take care of it. Young professionals who don’t have the time or desire to address these issues are also looking to have a landlord to handle their leaky pipes or broken fridge.

Shared amenities are also high on the list of things both millennials, and boomers are looking for. From movie theaters to gyms, it seems both groups are enticed by more than the square footage of their potential apartments.

In Kansas City and beyond, this trend shows no sign of slowing down. These two broad groups will continue to value the wants and needs that that will allow them the mobility and flexibility to keep moving.

Multi-Family is Still Strong

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The commercial real estate market, and specifically the multi-family sector is booming. According to the latest research from RENTCafe, the demand for apartment units remains strong, in turn causing rental prices to increase.

As rents continue to increase across the country, more and more investors are looking for new markets to expand into.  This growth has led to historically high pricing and a surplus of buyers looking for multifamily product.  Many of the groups have set their sights on secondary and tertiary markets in the Midwest to invest their capital.

Rents are not the only driving forces behind the multi-family market strength. Other factors that are contributing to this growth include:

  • 12 consecutive years of rental demand growth, pushing total rental households to 43.3 million
  • 1 Million new renters per year from 2012-2016
  • Rental demand is at its highest level in past 50 years with 37% of U.S. households renting
  • Vacancies remain near historic lows at 5.9% nationally
  • Despite growth, the market has added less new housing over the past decade than in any 10-year period dating back to at least the 1970s
  • The U.S. will need to add over 4.6 million new rental units by 2030 to meet projected demand, or 350,000 units per year; far above the last 4-year average deliveries of 244,000 units

At AREA, we believe that today’s multi-family market is not just about buying and selling, but rather understanding the driving forces at play in the market.  We work to help our clients decide the best ways to make the most of their properties, and in turn, increase the value of them.  To learn more about the multi-family services we provide, click here or contact Grant Kollman and Charlie LaBarr to discuss your multi-family real estate needs.

AREA Adds Multi-Family Department

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Why are we launching a Multi-Family Division?

Meet Grant Kollman.

It’s a new year and we’re excited to announce that we’re entering the multi-family market. The reason? You.

In response to a growing number of clients who have diversified property investments, including multi-family, we’ve been looking for the right leader to open this new market.

Enter Grant Kollman.

Like any other practice area, multi-family has a complex set of variables that drive value in the investment. With deep experience in this market, Grant joins us to help our clients decide the best way to make the most of their properties. Is it time to sell? Buy? Upgrade? Re-invest?

Grant believes that today’s multi-family market is not just about buying and selling at the right time, rather understanding the broader forces at play in the market and advising clients on how to invest in properties, how to invest in their properties, and how to steward their investments for maximum benefit.

“One of the reasons I’m excited to be at AREA is out partnership with Platform Ventures,” says Kollman.  “AREA and Platform have made a big commitment to developing technologies that can analyze hundreds of data points in real time to get a much more accurate view of what’s happening in the market. The speed at which we can crunch data and appraise opportunities is ridiculous. These advances are the leading edge of what every brokerage firm will look like in 10 years.”

Our clients are looking for adaptive reuses for properties or are looking stacking or adding uses to existing projects. Our clients need experience across all product types, including multi-family in order to find the optimal path forward. With teams with diverse experience we are uniquely able to advise our developer clients in the pre-planning phase of development.

Join us in welcoming Grant to the team and feel free to contact him.

To view the Kansas City Business Journal article, please click here.

$400M Paragon Star Development in Lee’s Summit

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Developers broker ground late last year on the Paragon Star project in Lee’s Summit, MO.  Paragon Star is a $400 million mixed-use development lead by developers Flip Short, the visionary behind the project, and Bill Brown, president of Spectrum Strategies and Paragon’s coordinator.  Paragon Star will include soccer fields, apartments, a full service hotel, as well as office and retail space. It is a project that has not only been many years in the making, but one that has led the way for other future projects in the area.  It is estimated that the Interstate 470 corridor could see approximately $1 billion in new development over the next ten years.

“Developing the number one complex in the country doesn’t just happen overnight. We have a very intricate private/public relationship and we plan on this being the model for future developments for years to come. By incorporating as many pieces to the puzzle as we can, we have created a site that will truly have a one-stop shop for everyone: whether it be living, shopping, working, eating, playing or biking across the state to St. Louis, we will have it all,” said Ben Short of AREA Real Estate Advisors.

Ben Short has been an integral part in the planning of Paragon Star and will be leading the charge of all real estate transactions that occur at the development.  Ben has been with AREA  since 2013 as an associate retail broker, specializing in tenant and landlord representation.  For more information, click here.