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Our Thoughts On Amenities In Multifamily Developments

build-to-rent podcast market research Jan 21, 2022

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"Amenity quality should also be considered because build-to-rent communities with high-quality amenities will perform well. Often topping the market in terms of actual rents achieved."

What do you think about that?

Chase Leavitt: I honestly don't think we have super high-quality amenities. I think we have good amenities with FIG. We have the pool the clubhouse. Maybe to some tenants, they think that's high quality.

Sherida Zenger: Dog park.

Steve Olson: Those pickleball courts in American Fork, Utah. Yeah, those are 24/7 And that's a cheap amenity. But people love it.

Chase Leavitt: Yeah. So we have good quality amenities. Oh, no high quality like the big fancy movie theater in the clubhouse. I don't think we've ever done that right.

Steve Olson: No, no, where you got these media rooms and a dog groomer. I mean, you can do all that. That's all great. I just wonder how often tenants I don't think anybody is serving the moderate amenity demographic because when you put those amenities in, you want $2,500 a month in rent. I mean, do you that's what it takes in order to be able to do a project that kind of size. I just wonder how many people can afford that.

Chase Leavitt: I don't disagree with what he's saying. But I don't know if it's the high quality I think it's good amenities that really meet that area the tenant what they're looking for. Some amenities, right. The pool, especially down in Arizona, Texas, where it's hotter up here is nice as well.

The clubhouse. Not a huge clubhouse, but maybe where people can meet and gather have a birthday party, which is really nice or family, whatever the case is, I don't know if you're gonna see the value for that the big fancy movie theater or we have a smaller gym, sometimes in clubhouses but not I've seen some clubhouses or are built to rent a class. Their gym is awesome. Better than a Golds or Vasa right.

Sherida Zenger: Maybe they have a higher HOA, right? That helps offset some of that too.

Steve Olson: You charge for these they become income streams, right for many of these property managers and property owners. We've got this build-to-rent project under contract in Texas right now. And John, our team lead down there, and I have talked about so a couple of projects in Texas one thing is clear, we hate these pools.

They look good. People say they want them.

The debate is open, how often are they actually using this pool? Because the maintenance is out there constantly. It's a pain in the butt. We've read some reviews of other complexes that don't have them. People seem to be minorly irritated. But mostly they're placing the value on how responsive is the property manager... Where can I put my trash... Is there a place? Where can I park and a few other things? So we're toying with not doing a pool.

Sherida Zenger: A splash pad may be a good option, maybe?

Steve Olson: Yeah, because chlorine and all the crap and everything and you know, it's like, are you staffing the project constantly because you know, what happens in pools a lot of times, and you got to deal with that right then and there. But if you don't have somebody on staff, you just got to close the thing. When can you get here? Somebody threw a Snickers in the pool. Right.

We've just toyed with that in Meridian, Idaho, we've got this half-court basketball court, and it's like, always full. And you look at the weather in Meridian. And you compare that, should we do a couple of basketball courts and a pickleball. Court? That can be open? What, like, eight months of the year? All the time.

I mean, if you get a couple of good days in February, you can go shoot hoops, right versus that pool. It's a Memorial Day to Labor day kind of thing. The best-case scenario. Costs a lot of money.

Chase Leavitt: Depends on the market, too. I mean, basketball pickleball Those are awesome. Just depends on the market, the location, so really just research it and understand who your tenants gonna be. I think of Arizona during the summer, and I'm hearing they're not going to want to be out doing pickleball basketball in the heat, right? They're probably going to be by the poolside.

Sherida Zenger: Most likely. Or in the AC.

Chase Leavitt: It just gets so hot down there.

Steve Olson: That's an interesting thing to think about. On these amenities. You know, we even talk about Amazon Lockers, right for package delivery. I've seen a lot of people doing it. I'm not clear how valuable it is or not. James, one of our lead developers at our company, you know, he's always said that, hey, look, cool amenities attract people, garbage and parking keep people.

It's not sexy. But I think over the long term, it makes a huge, huge difference. Yeah, yeah. I mean, we got this one that we did in Vineyard, Utah, that's chock full of college students. There are cars parked everywhere. It looks like a scrap yard practically. Right. And those things turn over regularly because the square footage of the units appeals to the tenants. But it's always a pain in the butt for them to park.

We've even talked about garbage cans, too, because people are just crazy with these dumpsters. Can you go to garbage cans, it opens up a new set of problems.

Chase Leavitt: Sometimes you have to...

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