I recently had the pleasure to be on a panel for Minnesota Commercial Real Estate Women’s annual Crewcast. With multifamily projects dominating a lot of the news and the commercial real estate industry in the Twin Cities, it presented a great opportunity to speak about the past, present and future of the sector. You can read my thoughts on past trends here.
Present: Super Graphics Meet Super Amenities and Sustainability
We are currently seeing the incorporation of more and more super graphics into projects. These large-scale pieces provide wonderful, artistic statements in a space without breaking the budget. Technology today provides the ability to print on any type of substrate. Customizable super graphics provide individualized expression. Venue at Dinkytown features super graphics that carry the theme of light and activity throughout the property. The Station on Washington used a transit theme that was carried out with super graphics, including a word wall that incorporated the names of some of the first tenants to sign a lease.
Amenities are important; in today’s developments luxury amenities are king! As new product continues to be built throughout the Twin Cities, building amenities continue to be the deciding factor for renters when choosing where to rent. Properties today feature a resort-style living experience, including state-of-the-art 24/7 fitness centers; 24-hour concierge services, community club rooms; dog parks and wash stations; bike shops and storage; outdoor pool decks, spas, fire pits and grilling stations; community gardens and other gathering spaces, helping to create a sense of community within buildings.
Many developers are designing their developments with sustainability and transit in mind. At The Nic on Fifth® luxurious living is synonymous with sustainable living. The transit-oriented building features a bicycle friendly environment, enclosed parking with a green roof, reserved parking spaces for alternative fuel vehicles, optimized daylight and views, use of natural landscaping and indigenous plants, reduced water consumption, efficient heating and cooling systems, recycled and recyclable construction materials and more.
Demand for multifamily units was much greater than the supply that existed from 2009 to 2013. Supply is just beginning to outpace demand in 2014 across the U.S. Concern of oversaturation is beginning; however, investors continue to favor multi-housing in Minneapolis. Many developers are anticipating we are close to the high point of the market and are wondering if we will reach a plateau or see a decline in demand. Downtown Minneapolis continues to see strong demand and increased rents year after year.
With unemployment in Minnesota remaining below the U.S. average, vacancy rates remaining low and the Twin Cities metro attracting job seekers, we’ll continue to see demand for multifamily. New developments continue to exceed owner expectations, both in achieving higher rents and leasing faster than expected. This demonstrates the demand for well-designed and well-located projects.
Interested in future trends, read the final installment in our mulitfamily trends series.