Why Garden-Style Apartments Are Now a Hot Commodity
July 30, 2020
Garden-style apartments may have been snubbed in recent years, but that's changing. These smaller multiunit buildings, built around a courtyard or open area, are growing in demand because they offer something that more tenants crave in the era of COVID-19: easy access to the outdoors.
Investors are predicting a significant shift toward garden-style communities that offer more opportunities for social distancing with open space, lower density, and outdoor access. High-rise apartments with closed hallways and elevators, on the other hand, may see less demand, they say.
Garden-style apartments are usually located in four-story buildings that don’t have elevators. Ari Rastegar, CEO of Rastegar Property Company, predicts in an article for the National Real Estate Investor that these vintage multifamily assets may offer the best deals for investors. Class-B and class-C communities built decades ago could offer bargains, increase in demand, and offer more stable occupancy than high-rises.
“Garden-style makes sense from a health perspective,” Rastegar writes for the National Real Estate Investor. “Recovery post-pandemic for landlords of all classes is contingent on meeting users’ needs and expectations with respect to best health practices. … Since we’re all sensibly wary of elevators and indoor common areas, vintage multifamily eliminates these issues and provides an overall more pleasant living experience in a natural setting.” Further, he adds that suburban communities offering many class-B and -C properties with natural views backing up to a forest or creek could be in greater demand too.
Vintage properties do tend to be prime for investment to renovate the units to make them more appealing to tenants.
“Multifamily is going to be the most valuable asset class over the next 10 years,” Rastegar maintains. “We see resilience in apartments in general, and specifically in garden-style class-B and -C communities that don’t have the occupancy density of high-rises and offer more open space and fresh air. Renovating and operating these assets creates enormous value for tenants and owners. Garden-style is the wave of the future.”
“Suburban Garden-Style Apartments Will Be the Future of the Multifamily Sector,” National Real Estate Investor (July 29, 2020)
Updated: August 13, 2020