How to Fast-Track Multifamily Development

Multifamily is the most popular property for development in Los Angeles, and for good reason. There is incredible demand and opportunity. However, the market is rapidly changing, from the construction and development to the design to consumer needs. We sat down with Dale Yonkin, EVP and multifamily studio director at Nadel Architects to talk about the newest trends in multifamily development and find out how developers can curb some of the biggest challenges.

GlobeSt.com: What are some strategies for maximizing speed to market/leasing path? 

Dale Yonkin: The biggest potential development delay in Los Angeles is the city entitlement process, which confirms the size, density and design of the project prior to beginning construction drawings. This can take up to 1-and-a-half to 2 years if an Environmental Impact Report or a zone change is required. Much of this delay can be avoided by choosing development sites, which are currently zoned for residential development at a scale that works financially for the developer.

Another way to shorten the development process is to fast track the construction of the building. This can be done by obtaining sequential partial building permits (e.g. foundation-only, and the remainder of the structural, etc.) and by beginning the construction of the building prior to the construction drawings being 100-percent complete.

GlobeSt.com: What are the new standards in multifamily amenity packages and how can owners and operators remain competitive in the Southern California market?

Yonkin: Amenities are key to successful apartment projects, and one of the advantages that larger developments have over their smaller competitors is that the larger project can financially support more extensive amenities and services. The possibility of chance social interaction in amenity spaces is very appealing to the type of renter who is already attracted to the idea of a living in a Metro environment.

Along with the usual social rooms, swimming pools and sky-decks, amenities we are currently providing in projects include gyms, aerobic rooms, theaters, JAM rooms (music practice spaces), party rooms with demonstration kitchens and dog runs with pet bathing facilities. Bicycle storage lockers and repair spaces have become standard along with multiplying charging stations for electric vehicles. Package delivery lockers (with automatic cell phone notification of arrivals) are expanding to accommodate the explosion in online shopping.

GlobeSt.com: How can developers and designers capture the spending power of millennials and soon-to-be Gen-Z renters without isolating other portions of the population who are increasingly choosing to rent rather than buy?

Yonkin: Unfortunately, the ever-increasing cost of construction means that rental rates in new projects match or exceed the cost of mortgage payments. Recent planning ordinances however, mandate that expanded numbers of affordable housing units be included, thereby creating more diverse levels of incomes amongst the tenants. Additionally, the projects we are currently designing have ever-smaller apartment units in order to control the price point for monthly payments. Spot Development (smaller site infill projects) also create a mix of tenant incomes in neighborhoods as these projects can be more “bare-bones” since they are less loaded with costly amenities and services.

GlobeSt.com: What are the benefits of adopting the hospitality model by creating a national brand for apartment developers?

Yonkin: The increase of national branding by apartment developers creates the same marketing opportunities for them enjoyed by chain retailers and restaurants. Renters are beginning to expect and rely on branded developer quality and services that can translate across neighborhoods and from city to city. The expertise of national developers based on feedback from their existing projects allows them to hit the “sweet spot” of the most cost-effective marketing programs, amenities and services.