who work in the nearby biomedical industry. During the design
process, cultural lifestyle considerations were kept in mind, says
For example, her team selected non-permeable textiles and
materials for a chef’s kitchen in the amenity lounge in order to
stand up to different international cooking styles that use oils in
high heat. And, for residents with children, there are conference
rooms configured to double as homework areas or study suites for
Kumon learning, a common cultural method of studying, she adds.
A FOCUS ON AFFORDABLE HOUSING
Another development that has been gaining traction is the realiza-tion that affordable housing can diversity a portfolio. According to
a recent 2019 Mid-Year Powerhouse Poll by Berkadia, which surveyed Berkadia’s investment sales brokers and mortgage bankers
across 60 offices, 84% agree that affordable housing will have a
major impact on the industry in the next year—especially as regulations around Opportunity Zones solidify.
“The buzz around a growing need for affordable housing has
been building for years but escalated this spring when the US
Department of the Treasury announced the second set of
Opportunity Zone regulations,” says Ernie Katai, EVP and head of
Production at Berkadia.
“As individuals and families in metros and suburbs across the
country continue to struggle with rising rent costs, investors are
no longer focused solely on class A housing,” he continued.
“Many are diversifying their portfolios by adding affordable prop-
erties to the mix.”
And a huge demand is showing for workforce housing, which is
generally defined as housing targeted at individuals earning
between 60% and 120% of a region’s average median income,
explains Elie Rieder, CEO and founder of Castle Lanterra
Properties. Rieder says that consumer demand for apartments at
these properties is extremely high.
“Millennials are renting their homes, as opposed to owning
them, at the highest rate of any recent generation, while a growing
number of Baby Boomers are downsizing from single-family homes
to apartments as they approach their retirement years,” she says.
“At the same time, while there’s been a good deal of new multifam-
ily development this cycle, the bulk of it has been either luxury
apartments or government-subsidized affordable housing; there
has been minimal construction of market-rate workforce housing.”
According to Rieder, with nearly half of renter households cur-
rently rent-burdened—where more than 30% of their paycheck
goes toward housing costs—the explosion of luxury development
will do little to meet the growing consumer demand for apartments.
“In the workforce housing space, the supply/demand imbalance
has led to shrinking vacancies and growing rents in recent years. As
the cycle progresses and some investors anticipate the market sour-
ing, the stability of workforce housing is extremely appealing.”
An additional element that makes workforce housing an attrac-
tive investment option, Rieder says, is the fact that much of the
country’s housing stock is aging, which opens up the opportunity
to create value through capital improvements.
Castle Lanterra’s approach is not just to acquire workforce housing properties, but to enhance them with modern amenities and
other capital improvements, which Rieder says elevates living standards for residents while generating strong returns for its investors.
“Because people generally look for homes that provide access to
job opportunities, employment growth and population growth are
closely linked. In light of this, it’s not surprising that the markets
with significant investor interest in multifamily properties are generally the ones with the most favorable outlooks.”
Castle Laterra also considers the dynamics of municipal governments. “Local governments that invest in highways, mass transit
and other infrastructure support business growth, and thereby
increase the potential of local apartment communities. A municipal or state government’s approach to taxes, education and economic development can have a profound impact on the area’s
attractiveness to residents and businesses, both of which will impact
the multifamily market,” Rieder says.
Regions that check most of these boxes include the metropolitan areas surrounding Seattle, Orlando, Boston, Denver, the NY/
NJ/Connecticut Tri-State area, Atlanta, Boston and Austin. The
mid-Atlantic region is also worthy of note. The company acquired
a property in suburban Virginia recently and is actively looking to
expand its holdings in Washington DC, suburban Maryland and
suburban Virginia. ◆
This advertising index is provided as an additional service. While every attempt has been made to this as complete as possible, listing accuracy
cannot be guaranteed.
3 Marcus & Millichap
5 Yardi Systems Inc
7 CIBC World Markets
9 CREW Network
19 PGIM Real Estate
21 Bascom Group LLC, The
21 Conservation Easement Advisors
23 Sine Qua Non (SQN)
25 Hutensky Capital Partners
27 Bellwether Enterprise
29 Franklin Street
29 MAS Development Group
31 LEE & Associates
39 Sharpline Commercial Partners
39 Meyers Group
41 GRUBB Properties
43 District Of Columbia Housing Finance Agency
45 Kislak Company, The
C4 Capital One Services, LLC
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