This blog post was submitted by Allyson Quinby, Account Executive at Solomon McCown & Company.
On Wednesday, April 4, industry experts gathered at Boston’s Seaport Hotel to discuss the future of Boston’s apartment market at NAIOP’s Future of Multifamily breakfast program. The panel featured experts in the industry including, Raymond Torto, Chief Global Economist at CBRE; Kent Larson, Principal Research Scientist at MIT Media Lab; Julie Smith, President of The Bozzuto Group; Simon Butler, Executive Vice President at CBRE New England; and James Gray, Principal at ADD Inc, as moderator. View panelist video.
Torto kicked off the panel and set the table for the discussion by explaining that from 2007 to 2012, there was an influx of graduating students in Boston. That, compounded with the fact that more individuals chose renting over homeownership skyrocketed Boston to the 7th largest multifamily market in the country—and counting.
Butler expanded on the supply side of the multifamily trend. According to Butler, Greater Boston’s supply of multifamily housing will continue to increase over the next three years. Currently, there are only a handful of residential construction projects underway in Boston and Cambridge metro areas. However, by 2014 these projects will be completed and almost double that number will be in the pipeline.
Smith addressed the demographic of individuals influencing the multifamily boom. Similar to Baltimore, New York and DC, Boston’s market is made up of single people, divorcees, and those in the 25-40 age group moving into the urban area and opting to rent over buying. Additionally, there is a demographic of individuals between the ages of 50 and 60—frequently empty-nesters—who are moving into luxury apartments. While varying in age, these demographics both expect hotel-like lobbies, energy-efficient appliances, common spaces and fitness centers all within a 30-minute commute to work.
Larson rounded out the panel by wowing the audience with his answer to the growing demand for personalized, high-quality and affordable units. Through the use of robotic walls, smaller apartments can now have multiple functions turning a full dining room into a bedroom with a touch of a button. MIT is providing the technology for these transformable environments that meet the popular need for spaces that can serve as the home and the workplace.
The factors that sustain the multifamily boom are just as interesting as the factors that led to this real estate trend. Rooted in job growth and urbanization, and perpetuated by the growing number of individuals opting to rent over homeownership, the emerging multifamily trend requires architects, developers and marketers to develop new strategies for building and filling these units.