How Multifamily Developers Respond to Their Many Challenges

LOS ANGELES—Developers continue to be one of the most transformative areas of the multifamily landscape. From opportunities in redevelopment, mixed-use properties gaining traction, and the ever-popular BTR sector charging full steam ahead, the biggest challenge for developers is deciding just where to begin. A recent session at the GlobeSt. Multifamily Fall conference discussed just that, and dove deep into emerging trends, continued hurdles and looked into how the development community is responding to economic turmoil.

Moderator Scott Sullivan, principal of Relativity Architects, asked panelists to describe the state of multifamily in each panelist’s region area and the challenges in developing there. For panelist Michael Broder, CEO and co-founder of RCKRBX, there is a lot of concern about the economic conditions and how that is affecting development. “The other thing I would say is the shift of decision making criteria that renters use in how they approach their next live space and how their wants and needs are changing and it is important that owners and operators understand what kinds of things they are looking for,” said Broder. “It is key to build attractive and desirable product for those entering the market in the next 12-16 months.”

Panelist Adam Perry, Partner, SVP Development and Construction at Cityview, said that states are also making it more challenging than ever to develop multifamily housing. “That has sucked the life out of a number of transactions.”

In the Southeast, James Holloway, a principal of Home Communities, says that the challenges are just like everywhere else, but in Florida, specifically, insurance and construction cost is particularly difficult. “Labor issues are also real,” he added. “But the opportunities are robust… A lot of migration is heading to the southeast. They will pay a premium on product that is right for them. We are purpose built and are built in communities around certain drivers.”

Panelist Daniel Doyle, COO of the Beach Co., said that the one thing he is really seeing is the push back from communities, and many residents that are opposed to new development. “That is a huge challenge. How do we address affordability and increase the housing supply? We have seen such an increase in population in many of the markets that we are in and they don’t know how to solve it. The first reaction many have is to just oppose.”