There’s an ‘arms race’ to lure renters, and it now involves pet spas and beer gardens
The list of amenities in some new Charlotte apartment buildings sounds more like what you’d expect in a high-end resort than a rental unit where you might live for a year or two. But with a record number of high-end apartments under construction, buildings are turning to their amenities to stand out and try to lure renters.
“It’s been an arms race, especially with the high level of supply and competition,” said Chad Hagler, a developer with Woodfield Investments, who’s opening the 455-unit Links Rea Farms apartments on Providence Road this year. “Everyone is trying to outdo one another.”
The amount of amenities considered necessary in a new, upscale building has increased vastly over the past two decades.
It’s no longer enough to have a pool and a gym with a few treadmills. Now, the bare minimum typically includes a saltwater pool with lounge chairs, a “pet spa” with grooming stations for dogs and cats, some kind of beer garden or community kitchen, high-end gym equipment like a yoga room and a concierge for packages and arranging services.
Some go even beyond that: Continuum 115 in Mooresville has a boat for residents to check out and cruise on Lake Norman.
All that added luxury can add up to increased rents. The average rent for an apartment in Charlotte is up about 6 percent from a year ago, at $1,142 a month. In 2013, the average was $842, meaning rent has jumped by more than a third in the past five years.
It’s tough to pin down how much swankier amenities add to the rent for individual apartments, since development costs can vary dramatically. But developers and property managers interviewed by the Observer said the effect isn’t insignificant.
Hagler said the first apartment building he developed in Charlotte, Elizabeth Square, had about 4,000 square feet of amenity space when it opened in 2007. His most recent, Links Rea Farms, has about 15,000 square feet.
“It’s an incredible amount of space, and those spaces are expensive to build,” said Hagler. But, he said, it’s worth it to draw new residents. “It’s your front door, it’s your marketing window.”
Not only are the added costs for building multimillion-dollar amenities packages rolled into the rent, but upscale amenities cost more to operate in the long term.
For example, a 24-hour concierge service requires hiring several shifts to work around the clock. Maintaining multiple courtyards, swimming pools and gyms full of high-end digital equipment necessitates more staff. And many apartments now contract with third-party vendors who organize social events for residents, such as beer tastings and food truck rallies.
“It’s more expensive from an operational standpoint,” said Marcie Williams, president of apartment management company Rivergate KW Residential, which manages high-end apartments in Charlotte. “The residents expect to be more entertained, and they want the amenities 24/7.”
Some changes have been driven by new technology.
For example, the dominance of Amazon Prime, which recently passed 100 million members, means apartments are now receiving hundreds or even thousands of packages a week. And meal delivery services like Blue Apron mean that apartments have to find a refrigerated space to store dozens of boxes with perishables.
“Every community we have now is doing 24-hour package rooms,” said David Ravin, CEO of developer Northwood Ravin. The company is building luxury apartments in two uptown towers and at Providence and Fairview roads. Its buildings also include private bars — staffed with bartenders — for residents, along with a sauna, steam room, massage room and golf simulator.
Amenities that once would have been considered over-the-top have become expected by many renters, said Phil Brosseau, vice chairman at real estate firm CBRE. Brosseau said the growing number of apartment dwellers includes more “renters by choice” who could probably afford to buy.
“They want the experience,” Brosseau said, and luxury amenities are an essential part.
With more than 50 new residents a day in Charlotte, many are young professionals moving from other cities who may be used to even more expensive urban markets like New York or San Francisco. That means luxury apartments in Charlotte might seem like a steal, said Lawrence Yun, chief economist and senior vice president at the National Association of Realtors.
“New residents (like these) are not hesitating to occupy a luxurious apartment in Charlotte,” Yun said. Charlotte’s vacancy rate bears that out, at less than 7 percent citywide.
Cost vs. Chic
Not all residents want the amenities, however.
“I prefer no amenities. My fiance and I toured probably every apartment complex in South End and South Park, and they upcharge for rent,” said Rob Brooks, a resident of Park Avenue Condos in South End. The couple decided to rent a unit at the condos to avoid the higher price tag of amenity-laden apartments.
While his condo has a swimming pool, Brooks said he doesn’t use it much. His membership at the Y makes a swanky fitness room unnecessary, and his lack of a pet eliminates the need for a dog park or pet spa.
“We didn’t want any of that extra stuff.” Brooks said. “It’s not important to us.”
Other residents consider extensive amenities to be a selling point of apartment life.
“I think that’s the only reason I’m still in an apartment complex,” said Alanea Kriete, of the amenities offered at her apartment in Post South End.
Still, when naming the amenities she uses the most, Kriete stuck to the standbys: the pool, the gym and the gated courtyards, where she likes to spend time with her dog outside. She admitted to rarely using what the apartment’s website describes as the “resident lounge” with an entertaining kitchen, an Xbox gaming station and a movie lounge.
Those looking for fewer frills may be priced out of the market as extensive amenity packages become the norm among city apartments, said Brosseau. But ultimately he believes the trend is a “testament to the durability” of Charlotte’s real estate market.
Yun pointed out that such durability is dependent on other factors.
“It is very aggressive building that is taking place in Charlotte,” Yun said.
As long as the influx of high-earning new Charlotteans continues, so will the aggressive construction of apartments that attempt to meet new residents’ ever-rising expectations, Yun said.
“We’ve just found our clientele expect the full package,” said Ravin, the developer. “They just want everything right there.”
Source: charlotteobserver.com
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