Marcus & Millichap Multifamily Forum in Chicago – Top 5 Development Trends Around The Loop
It seems the growing Chicago apartment market has captured the attention of investors nationwide.
I was fortunate to be a panel member at the inaugural Marcus & Millichap Multifamily Forum in Chicago. The topic of my panel’s discussion was “In the Loop: Multifamily Development in and Around Chicago.” It was the first general session of the day and attendees were all ears as my panel-mates and I discussed the current state of development.
I was in good company sharing the stage with Greg Mutz, CEO of AMLI Residential, Gerald Nudo, Principal Marc Realty, Darren Sloniger, CIO & Managing Director – Acquisitions, Marquette Companies, and Matt Edlen, Development & Acquisitions for Gerding Edlen.
Each of us were asked to comment on current trends in development ranging from demand drivers to building with green materials to amenity packages.
Everyone agreed that it’s a great time to be in multifamily – with 3,000 units delivered this year and up to 8,000 possible units coming online in the next two to three years – the demand is certainly there.
Here are some of my insights from the event:
1.) Everything being built right now is luxury. That includes the finishes in each apartment, the amenities and the level of service. And we’re not just talking in the core downtown neighborhoods. It’s every where from Hyde Park to Evanston.
2.) Amenities are bigger and better than ever. AMLI River North features a golf simulator and Vegas-style pool deck. 500 N Lake Shore Drive has a private Equinox gym for its residents. Properties across the city are starting to cater to dog owners with pet spas and massive dog runs. It’s all about convenience and service within a building’s confines.
3.) Each building has its own identity. Community within a building is becoming more important to ensure happy tenants and resident retention. Gerding Edlen out of Portland, Oregon is building their first Chicago properties with a strong emphasis on shared common space. The developer is looking beyond the amenity floor, opening up their lobby and other areas usually reserved for residents only to a broader audience.
4.) Developers are building with green materials and catering to an environmentally conscious crowd. All of the new luxury properties are LEED certified. While my clients don’t usually specifically ask to be in a “green” building, I often hear the request to live in a smoke-free property. Nearly all the new buildings are non-smoking.
5.) With vacant land scarce and at a premium in downtown Chicago, developers have been targeting adaptive reuse projects – turning old hospitals, factories and other landmark vacant property into apartment complexes. For example, I just finished an exclusive lease up at Vesta Lofts in the South Loop. The building was originally the Vesta Accumulator Company, but has been rehabbed as 59 luxury loft apartments.
It’s a very exciting time to be in multifamily development and I have a front row seat to the show!
You can watch a quick video about what I think are the demand drivers for multifamily development here!
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