Urban Core Continues to Drive Apartment Designs and Construction
State of the Industry for 2016
The Dallas-based firm has seen significant growth in recent years in the number of proposals sent for its e-Urban and High-Rise high-density products designed to meet the live-work-play downtowners. According to its recent state of the industry webinar, e-Urban proposals rose from 111 in 2014 to 131 last year, and High-Rise climbed from 94 to 124.
The increase marks movement away from the traditional four- and five-story wrap-style structures that have been popular for years. Aging Baby Boomers and mobile Millennials who desire living closer to the action of big cities are driving the changes, says Humphreys & Partners Architects, L.P., CEO Mark Humphreys.
Urban core living is now a cool thing
Humphreys noted that development and construction in the urban core is a game changer in apartment architecture. The number of proposals the company sent out in 2015 for high-rise projects were the company’s second most to e-Urban and increased 20-25 percent over 2014. High-rise proposals grew for the second straight year.
“Never in the history of the U.S. have we had the two largest populations very interested in the urban core. Never,” he said. “It wasn’t interesting (to live in urban core) ever. But now it’s a cool place.”
All of the 62 U.S. markets that Humphreys & Partners track are undergoing urban revitalization downtown. Humphreys pointed to a pair of high-rise projects that are exceptions to high-density urban areas.
One Light in Kansas City, Mo., is a 25-story residential tower with 311 units and 42,000 square feet of retail that just came on line. It’s the first high-rise to be built in downtown Kansas City is several years and was 85 percent pre-leased.
Also, 65 Bay Street, a 52-story tower with 446 units, is going up in Jersey City, N.J., in the shadows of Manhattan where the cost of living is less. Its size coupled with location away from New York City is an advantage, Humphreys says.
“It’s 10-15 minute train ride from Manhattan and rent is down significantly,” Humphreys said. “Plus, you have a better view than most people in Manhattan because you’re viewing all of Manhattan. It’s a very exciting property. We’re seeing this high-rise happening in multiple markets.”
With demand for high-density living come more calls for mixed-use residential and commercial projects.
“Two to three years ago people were saying they didn’t want to do any retail, it’s all dark,” Humphreys. “But it depends on where you are. So many of urban deals downtown are close to it. We’re seeing big growth on retail side.”
Urban designs creating modern, edgy looks in student housing
Even student housing construction appears to be taking a page out of the urban core movement to walkable living spaces and communities. Humphreys & Partners President Greg Faulkner says that 80 percent of the company’s student housing projects are following the urban model located in close proximity to campus.
University Park at 584 units and 762 beds is the first student housing project across the street from the University of Nevada, Las Vegas. Also, a 26-story high-rise, The Standard at Tempe, is being constructed across from Arizona State University.
Most projects are following the sleek, modern feel of urban multifamily housing with four- to six-stories.
“A lot of these are modern, contemporary and pretty edgy designs,” Faulkner said. “We’re seeing that trend on student housing for sure.”
Some projects are being built for mixed use and include retail and even a hotel. The mega Standard at Gainesville is a 10-story student housing high-rise and hotel in Gainesville, Fla., loaded with “amenities on steroids,” Faulkner said. The student housing portion is 1,200 beds; the hotel has 142 rooms. Also, projects to be built in San Marcos, Texas, and Columbia, S.C., have retail on the first floor.
Light steel faster solution in fighting delays in building
However, construction costs and delays continue to throw curves at the apartment and student housing industries and prompting some developers to seek alternative construction methods to keep pace.
Some projects are staying on schedule by using light-gauge steel instead of wood-frame construction, Humphreys said. Humphreys & Partners has fielded numerous inquiries about using steel, even though it’s about $20 per square foot more expensive in five to seven-story projects.
A benefit is that steel construction doesn’t require as much framing labor and is a better option in some parts of the country.
Humphreys and Partners has five-story projects under way in Newport, Ky, and Fayetteville, Ark., that are using a combination of light-gauge steel and wood. Also, a seven-story student housing project under way in Columbia, S.C., is using all steel.
“It costs a little bit more, but we’re able to deliver it and build it faster than a wood-frame in some markets,” says Humphreys & Partners President Greg Faulkner.
Humphreys said the price, however, may come down because of changes in the Chinese economy and drops in the mineral market. That could be welcome news for many apartment developers who are trying to stay on schedule and within budget as the construction industry struggles to rebuild its workforce.
Humphreys said delays, largely attributed to workforce shortages, have cost some contractors, who are now quoting longer build dates to ensure projects are delivered on time.
“The biggest problem we have now is construction costs and delays,” he said.
According to the Associated General Contractors of America, construction workforce shortages are declining but most contractors remain concerned that they won’t find enough workers. AGCA said that 70 percent of contractors report having a hard time finding workers, even though the industry’s unemployment rate declined to 7.5 percent from 8.3 percent from 2014-15.
The Association also says that most firms expand to expand headcount in 2016 to meet growing private and public sector demand, which may bode well for apartment builders. According to MPF Research, delivery delays kept industry-wide occupancy tight at 95.9 percent through 2015.
MPF Research noted in the webinar that eyes in 2016 will be on how many of the 312,000 units scheduled to deliver are unveiled. Last year, completions were targeted to climb by 20 percent but actually fell short of 2014 numbers by 8 percent.
Humphreys & Partners has several projects on the boards and expects more proposals to go out for developments in the urban core. Construction prices are staying within reason; prices per square foot surveyed by the firm have consistency and uniformity.
Now a category in Humphreys & Partners repertoire, urban core projects are adding a new dimension to multifamily housing design.
“It’s interesting to see movement away from the standard wrap project,” Humphreys said.
Source: propertymanagementinsider.com
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