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— Multifamily Properties Quarterly — May 2016
in microunits is Allante Properties.
The company’s first venture into the
shrinking unit size was Highland
Place, where the average unit size
is 640 sf and the smallest units mea-
sure 378 sf. The property includes five
microunits as well as studio, one- and
two-bedroom floor plans. The smaller
units leased up quicker than the
larger ones, many going sight unseen,
said Daren Schmidt, principal of
Allante Properties.
“If I were to tell you what we took
from Highland Place, it was to build
more micros and studios,” said
Schmidt. “Unequivocally, had we
taken this project and turned every
unit into a studio and or a micro, we
would have probably had a 50 percent
increase in velocity for renting. And
as it was, we leased this entire build-
ing – retail and residential – in a little
under six months.”
The developers are building Tenny-
son Place and are in the design phase
for another apartment in Uptown,
Emerson Place. Both properties will
be 85 percent studios and micros.
There will be no two-bedrooms, and
the only reason there will be any one-
bedrooms is because the space in a
few areas worked best in that format,
Schmidt said. The average unit size
at Tennyson Place will be a little over
500 sf, while Emerson Place’s average
will be 480 sf.
“We’re really running with a con-
cept, because we feel that people
don’t want to pay $2,000 for an apart-
ment,” said Jordan Meylan, director
of finance and partner of Allante. He
continues, “$1,400 is a lot more palat-
able if all you’re sacrificing is square
footage.”
At rents in the $900s to $1,100s,
these microunits can be touted as
value proposition and have been well
received by the market. In Highland
Place, the units originally were mar-
keted in the $900s, but after the first
few went quickly, the price rose to
$1,100.
A similar phenomenon was true at
Turntable Studios. The 339-sf micro
studios were advertised for $900
when the property opened in August.
They now range between $1,000
and $1,250, depending on the unit’s
views. The fully stabilized property
is 95 percent occupied and is 97 per-
cent leased out, said Nick Costanzo,
chief operating officer with Boutique
Apartments. The uniqueness of the
project helped during lease-up, he
said.
There is no official definition of
a microunit, and the size expecta-
tion varies by city. In Denver, sources
agreed that the unit should be under
400 sf. Denver has always had a size-
able number of studios in the 450- to
500-sf range, so micros need to be
smaller than that, said Bruteig.
The smallest units in Denver are
at Turntable Studios, which offers
167 microunits measuring 339 sf.
The property is predominately
microunits, but has four one-bed-
room, one-bath floor plans (664 sf)
and eight penthouse two-bedrooms,
two-baths floor plans (820 sf).
The distinction between a studio
and a micro is strictly the size, said
Schmidt. A micro needs to have all
the main studio facets, such as a
full bath, full kitchen, washer and
dryer, but in a smaller footprint. Typi-
cally sitting areas or dining areas are
removed. Some sort of outdoor area,
either a balcony or a slider door, is
important as is built-in storage and
parking.
For a successful micro project, the
property must be located in a popu-
lar neighborhood that offers many
amenities. The building itself must
be heavily amenitized as well, to give
the renters areas to socialize outside
of their unit, said Hunt.
Challenges
Cost is a big consideration. “I’ll
tell you flat out, it is definitely more
expensive to build these smaller
units because you have a lot more
Market Trends
Photo courtesy Allante Properties
Highland Place distinguishes between microunits and studios. Studios, above, offer a separate sitting area that micros do not.
