Large apartments have once again become fashionable across the United States. More and more people are looking for more space because they spend more time working from home.
In 36% of U.S. cities, apartments under construction are on average larger than those built in the previous five years, according to a report by RENTCafé, an apartment search engine across the U.S. Apartments in 33 of the 92 cities surveyed are 5 square meters larger on average, the report said.
The demand for larger apartments comes after several years in which apartments have shrunk, in part because smaller housing units are more profitable for property owners. In densely populated urban areas and around universities, many developers continue to build smaller apartments to offer more units and meet high demand targets for rental housing, according to Yardi Matrix, a property intelligence company that provides data to RENTCafé’s report.
But the rate of larger new apartments is the largest it has been in five years and reflects tenants’ preferences, says Doug Ressler, business intelligence director at Yardi Matrix. Older millennials have reached the age where apartments are purchased, but many are unable to find an affordable home. Instead, they are looking to rent larger apartments for themselves and their families, Ressler said.
The urge to increase apartments preceded the Corona plague, but there are property industry executives who say it will continue as long as the health crisis adds a premium to more built-up space. Entrepreneurs say they are building units that have more space to work and rest, as a way to meet the needs of residents leaving the crowded cities for the benefit of the suburbs across the country.
“We do little things like add built-in offices and areas where people can work from home in all kinds of niches,” said Michael van der Paul, a founding partner at Asia Capital Real Estate, a private equity firm that specializes in residential development.
“Even 5 square meters are an important addition to the space”
Jay David Heller, CEO of the NRP Group, a developer of multi-unit buildings, said the company would offer corner plans that could serve as a home office in both single-bedroom and two-bedroom apartments. NRP, an entrepreneur operating in St. Petersburg, Florida and San Francisco Antonio, has expanded some of its plans by an additional 3-5 square meters, Heller said.
Several family project developers in northern New Jersey are taking a similar approach, replacing one-room apartments with one-room apartments + work space, said Brian Gertkowski, president of Sparrow Asset Management. The extra space offered by American contractors is not large, but “in a 55-square-foot, 5-square-foot apartment is an important addition,” said Justin Brown, president and CEO of Skender, an entrepreneurial company from Chicago.
Single-bedroom, two-bedroom or three-bedroom apartments are growing by the number of meters in almost half of the cities analyzed by the RENTCaf & eacute report. In such housing units, construction contractors add an average of 2.5 square meters, 3.6 square meters and 10 square meters, respectively, according to the report.
Meaning: an increase in rent
The city of Everett in Washington is leading the trend. Developers there are building apartments that are 25 square meters larger on average than they have built in the past five years, according to the report. To the apartment.
The report did not address the question of whether the change in the addition of built-in meters would increase rental prices. Not all developers are convinced that the trend will last, citing rents as a challenge.
“We are not sure if in the long run the average size of the housing units will go up because that would ultimately mean higher rents,” said Omar Rihani, project manager for multi-unit building construction at Project Management Advisors.