Three decades ago, large, sprawling, spacious apartment units were the norm. Renters were interested in enough room to hold sectional sofas, massive kitchens and bedrooms, and large-screen television sets — everything necessary for “cocooning” in comfortable surroundings.

In a fast-forward move to the 21st century, renters these days prefer wi-fi connections, walkability and socializing. This, in turn, is leading to the trend of micro housing, defined as studio units sized 280 to 450 square feet. Hunt Real Estate Capital’s Peter Clasquin discusses micros in great detail, focusing both on renter profile and lender preference.
On the tenant side, trends include marriage delays, a quest for affordability and a preference to eating out (or taking out) versus cooking in. This is spurring the micro popularity, as the units are compact and allow tenants of average means to live in urban areas. Furthermore, the locations of these micros help the renter save on transportation costs, while putting him/her in close proximity to dining and entertainment options.

Meanwhile, lenders can take comfort in the idea that micro units are more than a fad. However, “the arbitrary requirements of cities” leads Clasquin to suggest that partnering with a local lending expert is the best approach for financing the development of, and investment in, such apartment complexes.

For comments, questions or concerns, please contact Amy Sorter