CREJ - Multifamily Properties Quarterly - April 2015
What? … You don't have a lazy river? There have been numerous talks about the “amenity wars” currently underway in Denver’s apartment world. Striking the right balance of amenities at a community should always begin with business basics. Striving to top the most recent property to come on line may leave your deal open to great financial risk. However, beginning the project with thorough due diligence will ensure long-term project success. These days, certain resident amenities are perceived as must haves, and many owners can feel compelled to check the box as their laundry list of amenities is generated. This approach often bypasses the need to take a hard look at the operating side of the multifamily development coin. Much of Denver’s recent apartment production has been in the A to A+ category, which has driven a bigger-is-better attitude toward development of resident amenities. For designers, this can feel a lot like the kid being left alone at the candy store, where the notion of everincreasing rents drives over-the-top solutions. While heavy amenities can serve to create buzz, drive quick absorption and put properties on the map, they are only valuable if they can be maintained with operational costs that work in the big picture. Additionally, it is imperative to have the ability to be flexible and to evolve as technology and lifestyles evolve. (Remember the days of re-tasking racquetball courts? Need I say more?) Whether or not your project has a sky-high budget for resident amenities, it may be helpful to look at how a few recent projects sought to strike that balance of being competitive in the marketplace while not falling into the mindset of bigger is better. At The Logan, Forum Real Estate Group kept its resident amenities on par with the small size of the project. Due west of the project, where the view should be, is instead a 12-story office building that blocks any mountain vistas. A second-level outdoor gathering place was created as a tranquil oasis with views toward downtown. There is also a great view of the state Capitol rising above the heavily tree-lined streets leading north from the property. On the hard corner of Sixth Avenue and Logan Street, a small community room that opens to streetscaping along Logan Street gets a lot of resident use – two different spaces for different people. A unique combination of a dog wash and bike wash area rounds out the inside amenities. Outside, the Governor’s Park location is the true amenity that keeps the property at full occupancy. When Spanos was rethinking its apartment community at Element 47, on the former site of Baby Doe’s overlooking Elitch Gardens and downtown, it became clear that leaving some density on the table was going to yield greater results. The views of downtown are so dramatic that all amenities are oriented in that direction, allowing the programming of the amenity spaces to be scaled back compared to competing properties with lesser views. The fitness room is nice, but appropriately sized. The gaming area is beautifully furnished and provides large, expansive views of the dramatic downtown vista but also is not oversized. The rooftop terrace is again modestly sized, but the views are spectacular. The point here is having the smarts to recognize that bigger isn’t always (and rarely is) better. At Prasanna in Lafayette, Milestone concentrates on fitness and finishes. With a suburban-style community of 240 units, the clubhouse of 5,000 square feet is not over the top in size. What stands out is the 25-yard lap pool with a full-length baja shelf, a well-equipped fitness room and a freestanding yoga studio. Additionally, Milestone elected to invest in high-end finishes in the community building in lieu of a long list of resident amenities. The finishes budget for the community building was well over $500,000 and includes Architectural Woodwork Institute premium casework, recycled glass countertops, and designer light fixtures imported from Italy. The combination of solid floor plans in modest buildings along with above-average finishes in the clubhouse has been a formula for Milestone’s success. With 200 units on 1.1 acres, The Pauls Corp.’s Via Project, currently under construction at Eighth Avenue and Broadway, qualifies as high density. There was an early decision not to develop a rooftop amenity. Instead, the focus was on the resident amenities on a second-floor linear outdoor space defined by the building’s massing. The exterior deck area features a series of pools, including a plunge pool, sunning pool and spa, a grassy play area for dogs, and numerous outdoor rooms that generate interest and take full advantage of the limited space available while providing for construction economies. Indoor amenities, such as the clubroom, yoga and spinning room, and exercise space, all appropriately sized, connect with and spill out to the exterior spaces. The result is a resident experience that ultimately lives large. There is one common thread in all of these examples – the notion of scaling the resident amenities appropriately and not falling into the trap that bigger is better. Thoughtful research about the target demographic may yield solutions that are less scattered and more focused than providing all things to all people. As the industry learns more about what millennials and empty nesters truly value, don’t be surprised if you see future apartment communities with a short, well-defined list of appropriate amenities and less opulent, flexible spaces easily repurposed. Remember the mantra – bigger isn’t better, better is better.