Multifamily owners and developers, take note: the effects of the current pandemic on renter expectations, and on development costs, are likely to be long-term. Forbes’ Lisa Chamoff offers a breakdown of the most significant changes the multifamily sector will see, especially in major cities:
• Bigger is better. Although “micro-apartments” were supposed to be the wave of the future, city dwellers who have waited out the stay-at-home orders in one or two rooms will likely be looking to spread out.
“I think that the desire for larger apartments will come back into style, and many will be looking to size up — whether sizing up in square footage, light, outdoor space, view, or amenities,” Ian Slater, a residential broker with Compass in Manhattan, told Forbes.
• Smaller is better, too. Forbes reports that agents think that boutique buildings will win out over large developments, and townhouses will become more prized.
“I certainly think this is good for townhouse living because you don’t have the same issues you have in an apartment building, such as sharing an elevator, not having access to your gym, and you have private outdoor space,” Brown Harris Stevens’ Lisa Lippman told Forbes.
• Leave your apartment without leaving your apartment. While balconies, terraces and private roof decks are already prized amenities for any prospective condominium buyer, they’re likely to see even greater demand in the coming months.
“Being stuck inside, I think people may realize what is important to them in a home and in their space,” Lippman said. “People will consider what it would be like to reside in this space without being able to leave now. Outdoor space may become more important.”
Home office space will also become a more standard offering. Townhouse Partners’ David Stern noted that for multifamily projects now in the planning stages, developers are reconsidering layouts to accommodate tenants working from home.
• Building will take longer and cost more. Construction attorney Barry LePatner, founder of LePatner & Associates, predicts that when the moratorium on construction ends and builders get back to work, we can expect delays in the permitting process and increased costs as the supply chain slowly recovers and superintendents get up to speed on how to keep workers safe.
There will also be the challenge of new constraints on construction lending, and the slowdown of land acquisitions following a likely recession, according to Forbes.
• Expect changes in the materials supply chain. More than 30% of construction materials come from countries such as China, Italy, Brazil and India, all of which are facing their own challenges with COVID-19.
“Many of those suppliers are going to build it up in the U.S., but it’s going to take years,” LePatner told Forbes.
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