Written by Phyllis Hartman, ASID, LEED AP
With increasing competition, apartment properties are competing for occupants with newer and more original amenities. Which work? Which are worth the investment, upkeep and floor space? We believe the winner of this race designs space that enhances well-being.
Amenities that promote well-being:
10 years ago, did any of us in the multi-family design and development world understand how renters’needs and desires would transform to what they are now? Who would have predicted that in 2017 some of the most important and critical amenities would revolve around on-line shopping and pets? As sociological trends shift, we find many flocking to urban environments, living small for the benefit of the city life, embracing pet ownership and the convenience of having every impulse buy and necessity delivered to their door step.
Recently while sitting in miles of bumper to bumper Washington traffic, I had a paradigm shift of my own. If we have a choice to spend the time in grid-lock versus walking our dog, having coffee at a neighborhood cafe, relaxing on a roof top deck with friends and working in a well appointed cyber lounge with free wireless internet, then why would today’s renter not choose to find more enjoyment in how they spend their time? This sounds like a stress reducer and a smart, healthy choice to me.
So how can we design properties with amenities that enhance well being?
Work and play everywhere:
Great design is a good start and is fundamental to every successful project. The art of architecture and design has throughout history had significant impact on well being. Yet it takes more than that. The game changer is to appeal to this societal transformation by reinventing communities and amenities that respond to the way people live in their local culture-inside and out. This includes designing multi-family buildings that converge all of the features that people need to work, play, socialize and re-charge in a healthy environment.
Even though millennials may be the driver of this trend, regardless of age, people want a high quality of life and less stress. Those in the workforce are spending more hours at work and many are constantly connected. Developers and designers of multi-family properties can make time more productive for residents and work more enjoyable by creating well designed co-working amenity spaces. Conference rooms, booth seating, work pods along with high tech audio visual features create a live/work environment that allows for individual work as well as team work. In a time when offices are being designed like homes, residential buildings that provide well appointed work spaces support the trend of the live/work blur. The owner, residents, and employers reap the benefit. Less time spent in traffic or on mass transit translates to a more relaxed, happier and more productive workforce and resident.
Package receipt and storage is an expected amenity and one that is growing more important. Our clients frequently ask us how large of a package room is required. As we look to the future, I am not sure we can predict the need, though we know that the demand is increasing. Currently we are recommending 2 SF per unit. In a 300 unit building, that means 600SF should be devoted to a large, secure room to store packages. Package lockers can supplement and, in our experience, have been very well received by residents and operations. They provide flexibility for residents and save much time for the leasing and concierge staff.
Consider turning the package locker area into a social experience for the residents. If there is space, consider a wrapping station for easy package return, shipping and gift wrapping as well as a communal table.
We love our pets and it is proven that pet ownership reduces stress! It is well known that interaction with a gentle pet has significant human benefits such as lowered blood pressure, endorphin release, pain reduction, and relaxation. Pets are also social magnets. What better way to get to know your neighbors than to get to know their pet? Multi-family developers can create a sense of community by engaging and promoting a pet friendly environment. For planning purposes we recommend that pet spaces move to the top of the programming list.
Much can be done to support your resident pet lovers without breaking the budget. Instead of a closet with a washing tub, create a pet experience space. Pet/human lounges that provide a place for pet owners to gather for conversation and pet play can be indoors or out. Pet runs with play space and well appointed spas are memorable and make a marketing statement about the pet friendliness of the property.
Re-charge through connection to nature:
Our need for a connection to nature is deep and fundamental. As we become a more urban society, designing spaces that bring the outdoors to our built environment is increasingly important to our health and well-being. Incorporating elements of nature, even through graphics and interior plantings, have stress reducing effects. Biophilic Design is the emerging science that advocates the human connection with nature in the built environment as a way of soothing and energizing the mind and body. Through thoughtful design, every common space can support our changing lifestyle and the tendency to blend work, play and relaxation. Buildings that are flexible and adaptable enough to accommodate our transformational and healthy lifestyle are the way of the future.
Written by Phyllis Hartman, ASID, LEED AP
POSTED ON AUGUST 22, 2017
In the previous issue, we discussed how to know when your multifamily property should be renovated and what level of renovation was appropriate. Once you have determined this, you will need to set a budget.
How much should you budget for your renovation?
Too often the renovation budget is set by an underfunded escrow account or is a result of mere guesswork. If the budget is set prior to a comprehensive understanding of the building’s existing conditions, the amount of space to be renovated, and the marketing challenges, the number will be inaccurate. Either method can set the owner up for disappointment.
Determining a budget is a task that should take place long before the renovation is to begin. The budget for repositioning a property is frequently determined in the year preceding the expected renovation. Depending on the level of the renovation planned, the budget may need to be determined farther out and the dollars allocated across multiple years. Collaborative discussions to prioritize the work will provide the best possibility for accurately setting the budget and obtaining future ROI. To assess the market, understand the conditions of the building, and develop a budget that is based upon real conditions, consider a team approach from the beginning. Involving your design professional, management/marketing consultant, building engineer and asset manager before the budget is set will help to alleviate unrealistic expectations.
Depending on many factors that cannot be controlled for your plans, construction pricing can vary from year to year. Even with the best planning, actual bids may come in higher than anticipated. It is best to have a phasing and VE plan in place in the event that this occurs.
Phasing of the construction can be a great way to manage a budget that needs to be spread over a few years. However, it is important to consider that there usually is a premium cost to phasing which will need to be considered in the budget.
Many owners frown at earmarking funding for renovation projects. They require management to meet the funding requirements from operational cash flow. This can be problematic for a variety of reasons. The cash flow requirements for renovation projects are frequently substantial, and the funds are, in most instances, required at the early stages. Professional and permitting fees, deposits, and advances need to be paid out before materials are procured and the contractor begins work. Additionally, during the renovation process, the property will not show at its best. This creates a tough selling situation for the marketing staff, which could mean a decline in revenue during construction. This will further limit the operational cash flow available for the renovation. To successfully meet your budgetary needs, you should consider setting aside funding specifically for the renovation. A well-thought-out budget that includes a construction timeline will help to manage funding and decrease strain on operational cash flow.
A cosmetic renovation may be considered an expense as it will serve to refresh and to maintain the look of the building for a period of time. A more comprehensive renovation will actually increase the life of the asset, so it would generally be considered a capital expenditure.
Keeping in mind that the core purpose of renovation is to improve revenue streams, it is important to consider that this will happen effectively only when the life of an asset is increased.
Owners and stakeholders will demand bang for their buck. Any renovation project is going to be tough to sell if there is uncertainty related to the return for the investment. Consequently, part of planning a renovation includes doing the math to obtain the estimated ROI.
So many variables impact rents – such as the age of the building, its location, the surrounding competition, and the tenant profile – that ROI will vary widely from market to market and from property to property within the same market. As a result, nationwide data is difficult to come by for multifamily housing renovations. However, skilled property owners say it’s reasonable to expect a 10 to 30% ROI on their renovation projects, with wood floors, kitchen upgrades, and improved interior lighting as some of the top ROI generators. For purely cosmetic renovations, a 25 to 30% return should be the target. It is important to analyze typical ROIs in your market before setting a budget and determining what upgrades to include in your renovation. The life span of your renovation will also have an impact on your ROI, so be sure to include this in your calculations.
By addressing these considerations, you can have a successful renovation that will increase the life and profitability of your property.
 Jason Van Steenwyk, Rental Property Renovations that Pay Off, (Sep. 2, 2015), http://www.allpropertymanagement.com/blog/2015/09/02/rental-property-renovations-and-improvements-that-pay-off/.
 John Caulfield, Rehab ROI: Which Upgrades Cause the Biggest Rent Bumps?, (May 28, 2014), Multifamily Executive, http://www.multifamilyexecutive.com/design-development/renovations/rehab-roi-which-upgrades-cause-the-biggest-rent-bumps_o.
 Harrison Willis, Repositioning a Multifamily Asset, (2016), Cornell Real Estate Review, 14(1), 62-69, http://scholarship.sha.cornell.edu/crer/vol14/iss1/12.
 Donald M. Davidoff, Rehab ROI: Do the Math, (Oct. 28, 2014), Multifamily Executive, http://www.multifamilyexecutive.com/business-finance/commentary/rehab-roi-do-the-math_o.
Check out the full renovation of Park Bethesda here: http://www.hartmandesigngroup.com/renovations/Residences-at-Capital-Crescent-Trail/
Written by Phyllis Hartman, ASID, LEED AP
POSTED ON MAY 6, 2017
We are delighted that The Bartlett has been recognized by the Washington Business Journal for the Best Real Estate Deal. This honor can only be accomplished through the continued dedication of our amazing design team and our loyal clients.
POSTED ON APRIL 25, 2017
We are honored to be recognized by Interior Design Magazine for raising to the 2017 Top 100 Giants! We are thankful for our wonderful team of designers and for our loyal clients who have made the journey possible
POSTED ON FEBRUARY 17, 2017
We are honored to be recognized by the Washington Business Journal’s 2016 Top Corporate Philanthropy List for the first time! This great achievement can only be accomplished through the continued dedication of our amazing team towards helping and giving back to the community.
POSTED ON DECEMBER 1, 2016