Covid changed housing amenities for the better
Thanks to the pandemic, business casual now means a coat and tie on top and sweats on bottom. And we’re no longer limited by the “office-only” view of our coworkers―we’ve now seen the inside of our CEO’s homes. Because Covid so drastically changed the state of business, it’s no surprise that it’s impacted the way we live too.
With clients who have spent so much time at home, real estate experts in Utah and the rest of the world has reacted to this change by betting big on multi-family rentals that come equipped with workspaces, gyms, pickleball courts, and other amenities to keep residents happy while spending so much time at home.
“The pandemic has accelerated this trend in a way I think no one could have expected,” says Brandon Fugal, chairman of Colliers. Fugal says housing was already moving in that direction because of an interesting generational shift in attitudes about homeownership. According to him, older generations saw homeownership as part of the American dream, but things have changed.
“Millennials and Gen-Zers have this desire for more flexibility and more experience-driven housing,” says Fugal. “They want to be in a place that has community.”
Multifamily housing is hot
Rawley Nielsen, president of investment sales at Colliers agrees and says that because of this, apartments are in high demand throughout Utah. “I think Covid, more than anything, has made apartments a really desirable product-type for investors,” and it’s all because of on-site amenities.
Nielsen notes that many apartments are capitalizing especially on conference rooms and work areas that tenants can reserve. This gives them the option to leave their apartment for a “work zone,” without ever having to commute. Recreational amenities, like gyms, too are prized when ordinary gym memberships may be seen as less safe.
“Gyms at apartment buildings have gotten used more than ever,” Nielsen says. “Tenants feel more comfortable walking down to a gym that may only have three people [using it, rather than] going to a 24-Hour Fitness that might have 100 people.” Naturally, he says, apartments have quickly learned to manage how many people can use amenities while maintaining social distancing and keeping residents safe.
Nielsen says the gold standard is the 4th West Luxury Apartments in Salt Lake City. The elaborate complex boasts a sun deck with private resort-style cabanas, rooftop fire pits, grilling stations, a gym, dog park, as well as a pet grooming station, billiards, and a putting green. “I’ve talked to a lot of out-of-state developers who say it’s one of the nicest amenities packages they’ve seen anywhere, not just Utah.”
Single-family communities are going to resurge, too
But not everyone can afford to live in luxury apartment complexes. Mark Jensen, EVP of investments at Colliers, says he sees trends like bigger units planned for future developments. “You’re going to see a lot more single-family rental communities built,” Jensen says. “It sounds crazy but you’re going to be able to go to the leasing office, get your keys, and drive down the street to a new two-bedroom, two-bath with a two-car garage for $1,650 a month with a yard and neighbors.”
This kind of big-unit trend, he says has already caught on in Phoenix, and several such communities are being planned out in Utah. “Space is going to be an amenity and community is going to be an amenity,” Jensen says.
Land space for these communities is always an issue, so Fugal is working on a project to transform existing apartments into more-modern locations with desirable amenities. Fugal thinks these redesigns could actually increase density in some complexes. By providing more on-site amenities like working spaces, more affluent renters might decide they don’t need to put a home office in a second bedroom when they can walk down the hall to a workspace. Some properties are even considering adding coworking lounges.
“I see it like an arms race between office real estate and multifamily housing competing to see who is going to capture an individual’s time,” says Fugal, who thinks it makes sense that people who once looked for office amenities might just want more amenities at their apartment complex instead.
Fugal says that the projects that pack the best variety of work and play options are going to win the race. If you can get your work done and live at a place with “pickleball and a golf simulator—then now you’ve found one of the coolest places to live and to work.”
Covid changed housing amenities for the better was originally published in the 2021 issue of The Advisor