Live-Work-Play Apartment Complexes Are Booming As Rents Hit Records
Posted On July 25, 2022
On a recent Saturday morning, people sprawled across a one-acre lawn in Northwest Washington, DC, watching a giant screen airing the Wimbledon women's final. The watch party was part of the unveiling of City Ridge, a $715 million luxury development with 690 apartments, 160,000 square feet of office space, and DC's first Wegmans. The complex introduced itself to the neighborhood by offering a free bouquet of flowers with a glass of rosé; lawn games; a live band and DJ; and, of course, tours of the complex. Apartments in the 10-acre development, formerly the headquarters of the mortgage giant Fannie Mae, start at $2,170 for a studio and top out at $10,744 for a three-bedroom — pricey for DC. Nevertheless, City Ridge is luring residents: About 60 leases have been signed in its first month, and at least one tenant has already moved in with construction still going on.
City Ridge is just one example of the many new luxury rental complexes across the country blurring the lines between "live, work, and play."In Washington, DC, in denser cities like New York, and in up-and-coming metros like Tampa, Florida, these complexes are especially enchanting right now because of what they offer: everything all under one roof. According to Yardi Matrix, a real-estate research company, the number of apartments in so-called live-work-play buildings in the US built each year jumped to 43,000 last year from 10,000 in 2012. Even as rents hit records, complexes like City Ridge and similarly structured communities in other cities are attracting residents. The builders of these mixed-use communities (in real-estate parlance) believe they're especially attractive at this stage of the pandemic, when return-to-office numbers remain sluggish. "Where else can you go to work, have your grocery store below you, and have your health club right across the street?" said Robert Wolcheski, who handles acquisitions and development at Roadside Development, the firm behind City Ridge. "You have access to open space, you have restaurants out the front door, and you don't have to deal with getting on the Metro or driving downtown to get to your office." The rise of 'live-work-play' communities The Tampa real-estate developer Bromley Companies bought an office building in 1996 without any grand plans. Twenty-nine parcels and many iterations later, its Midtown Tampa complex has a hotel, two office buildings totaling 210,000 square feet, and 400 apartments that started leasing in 2021. There's also a Whole Foods, an REI, a Sephora, a Shake Shack, a bubble-tea shop, and other restaurants and retailers. "We realized we had this urban campus in front of us," Nicholas Haines, the CEO of Bromley Companies, said. "That's where we really got excited both in terms of what was possible but also what Tampa needed and what we saw in other markets." A Residents pay anywhere from $2,028 for a studio to $5,575 for a three-bedroom and get a coworking space with Zoom rooms and a bar, a saltwater pool with cabanas, dry-cleaning services, and a yoga studio and spin room. At The Guild, a rental building in downtown Brooklyn that began leasing its 160 units — starting at about $3,500 a month — earlier this year, a library designed to welcome residents toting laptops turns into a speakeasy after business hours.
"Within buildings themselves, there's a greater demand for workspaces — for those people that may have a smaller home but intend on working from home," said Seth Rosner, the managing director of Nancy Packes, the marketing and leasing firm behind The Guild.
The New York development firm Rose Associates converted a 1932 art-deco tower in Manhattan's financial district into 644 rental apartments that started leasing in 2016. There's also a grocery store, a hotel, and Crown Shy, a rooftop restaurant with a Michelin star. Residents have access to a gym with daily classes and a turf track, a bowling alley, a golf simulator, and a screening room in the historic bank vault. While the median rent for a Manhattan apartment was $4,050 in June, available units at 70 Pine range from $3,809 for a studio to $14,873 for a two-bedroom penthouse on the 57th floor. "We believe that there is a premium associated with having a highly amenitized building," Marc Ehrlich, the CIO of Rose Associates, said. "The gym has to be a very good gym for people to want to pay a premium for it. Because then they're feeling that they're going to save on their outside gym membership."
Luxury-apartment rents have skyrocketed this year Though many buildings in cities like New York and Washington, DC, offered steep discounts during the pandemic, rents have increased sharply across the US this year. A July report from the Redfin subsidiary Rent.com said the average rent for a one-bedroom apartment was $1,701, up about 25% year over year. In some places, luxury-apartment rents have increased even more. Douglas Elliman's latest market report found that the median price for a luxury rental in Brooklyn increased to $7,150 from $5,960, or 20%, from June 2021 to June 2022. In Manhattan, the median price jumped by 42%, to $10,995 from $7,745, in the same eriod. Elliman defines a luxury apartment as a unit priced in the top 10% of the rental market. Washington, DC, has been following a similar trend. The commercial-real-estate research firm Delta Associates found that rents for DC's Class A apartments — defined as luxury or highquality units less than 15 years old — jumped by 18% from March 2021 to March 2022, to $2,687 from about $2,272.
The rental website Zumper suggests that in Tampa, one-bedroom apartments are renting for an average of $1,769 in July, a 37% increase year over year. So far, these increases have not stifled the leasing process. The Guild in Brooklyn has leased all but four of its 160 units since opening four months ago. City Ridge in DC, which is still under construction, started leasing only a month ago but has 60 out of 690 residential leases signed. Midtown Tampa has fully leased its residential units. "The results, frankly, even blew me away in terms of the lease-up rates," Haines said. "We had some months where we're leasing 70, 80 units a month." Developers are thrilled about the future of real estate in cities. And while a simple residential building may be the easier route, developers like Richard Lake, Roadside Development's founding principal, think the energy, lease, and excitement that mixed-use developments bring to communities is worth it. "It needed to be truly mixed-use," he said. "If it was just a residential execution, it would just lay there like a piece of lox. It would just be boring as all get out."SOURCE: Business Insider
About Rose Associates, Inc.
Based in New York, Rose Associates is a developer, owner and operator of premium residential properties. From planning a new development to managing day-to-day property operations, the Rose 360 Platform offers a full range of services designed to maximize the value of real estate. The firm oversees more than 26,000 units across New York, with approximately $2 billion in projects under development. Rose recently opened the historic skyscraper 70 Pine Street, which the firm is transforming into a luxury rental property with 644 residential units, 132 extend-stay apartments and a destination restaurant/lounge occupying the top four floors.