Due to extremely low interest rates and stiff competition from the sale of homes, the multifamily industry is working overtime to entice future residents. To attract renters, companies are looking for creative incentives, and they are targeting mostly young, professional clientele with properties in hip, urban infill areas that feature loads of amenities.

McKinley Associates

McKinley Associates is currently renovating The Courts At Kensington, a 148-unit apartment community in Indianapolis.

McKinley Associates was founded in 1968 by Ronald Weiser. The Ann Arbor, Michigan-based firm currently has 650 full-time employees, five regional offices and a $1.2 billion real estate portfolio consisting of 15,000 apartment units and 4.5 million square feet of commercial space.

The company specializes in solving complex real estate problems for its own portfolio and for select clientele, according to Albert Berriz, the company’s president and CEO. “Our specialty is the turnaround of distressed real estate,” he says. “The more complicated the problem, the more value we can create and financial success we can have.”

The entrepreneurial mindset at McKinley, and the company’s ability to act quickly, has helped to set it apart from larger companies. According to Berriz, this ability will be key in overcoming what he sees as one of the biggest challenges for multifamily developers today: re-engaging with a much different — and younger — target market than in years past. “We need to reach this younger market in new and different ways,” Berriz says.

McKinley plans to reach this younger target market by integrating “Wi-Fi” (wireless environment) zones into each new community clubhouse. “Residents can bring their laptops into the clubhouse and have a cup of coffee, much like they would do at a local coffee shop, without ever leaving home,” Berriz explains.

Wi-Fi zones will be offered at one of McKinley’s newest redevelopments, The Courts at Kensington. The company recently acquired the 148-unit apartment community in northwest Indianapolis, and a full renovation is underway.

Lincoln Property Company

Dallas-based Lincoln Property Company (LPC) was founded in 1965 as a development and management company for high-quality residential communities. The company now has eight regional offices for its residential division, and it has more than 164,000 multifamily units developed, according to Brian Byrne, senior vice president at LPC.

“The multifamily industry has been trending away from perimeter or sprawl markets in favor of less risky, inner-ring communities,” Byrne says. As a result, LPC has concentrated its efforts on serving this urban infill market.

One example is Lincoln at Ovaltine Court in Villa Park, Illinois. Part of this development is a former four-story manufacturing plant that has been converted into 121 high-end loft apartments. LPC also built 223 new garden apartments on additional acreage within the same community. “The development is a hybrid of trendy urban loft living and contemporary garden apartment homes arranged with a cohesive architectural design scheme,” Byrne says. The community has experienced a rapid lease up and has been successful — despite recent less-than-favorable market conditions.

Last year, LPC broke ground on City View Apartments, a 403-unit, mid-rise apartment community in west suburban Lombard, Illinois. The development consists of a single, five-story building that wraps around a central parking structure. “One of the most attractive amenities to residents in the Midwest is attached parking, which allows residents to access their cars during the winter without leaving the building,” Byrne says. The project is scheduled for completion in January 2004.

Continental Communities

Continental Communities is currently constructing the second phase of Easton Commons, an approximately 500-unit multifamily project, located in Columbus, Ohio.

Columbus, Ohio-based Continental Communities is the result of a joint venture partnership formed in March of 1997 between Nationwide Realty Investors and Continental Real Estate, according to Gus Cook, president of Continental Communities.

Easton Commons in Columbus, Ohio, is one of Continental Communities’ most recent developments. This four-building apartment community consists of three- and four-story buildings and is adjacent to Easton Town Center, a premier lifestyle center in the region. The development’s second phase is currently under construction, and it will include 293 units for a total of nearly 500 units in the entire development. Cook says there is also about 3 million square feet of new office and retail space within close proximity to Easton Commons. “It’s a terrific place for us from a rental standpoint because of the number of corporate clientele within walking distance of the development,” he says.

Continental Communities is also currently serving as general contractor for Arena Crossing — a 252-unit, seven- and eight-story apartment community also in Columbus — that is being developed by Nationwide Realty Investors. The project is located next to Nationwide Arena, the new home of the National Hockey League’s Bluejackets. A three-level parking structure is currently being constructed underneath the apartment buildings, and the entire community is scheduled for completion by the end of 2004.

Despite these recent successes, Cook says that doing business in the present market is a challenge. Because of an extremely soft market, low mortgage rates, and competition with homes, the current trend is offering rental concessions in order to maintain occupancy. “I don’t expect this to stop anytime soon, but I do think the market is turning a corner,” Cook says. His current challenge is preventing starting rents from getting so low that it does not make sense to be in business.

One of Cook’s future goals is growing the company’s corporate rental business. “Since [September 11, 2001], the corporate rental market has been drastically reduced,” he says. “But I think it’s going to turn around, and we’re already seeing some indication of that.” The corporate rental market will be most important to the company near developments like Easton Commons and Arena Crossing where there is a large office presence.

Village Green Companies

Detroit-based Village Green Companies was founded by Joseph Holtzman in 1919. Today, the company has regional offices in Minneapolis, Cincinnati and Chicago, and it manages 30,000 units at its 100 properties.

The company has a history of innovation, according to Jonathan Holtzman, CEO of Village Green Companies. For example, the company has developed four separate apartment brands, and it has assigned each a specific target market and price point.

Holtzman says it is essential to offer residents more than just an apartment building. “Renters are looking for something out of the ordinary, and they are willing to pay a premium for it,” he says. For example, Village Green offers a LeasEquity program through which it credits 10 percent of a resident’s rent, up to $2,000 total, toward the purchase of a new or pre-owned home or condominium. Holtzman says Village Green is the first company in the country to institute this kind of program.

Village Green has several new developments in the Midwest. The company recently bought three historic hotels built in the 1920s, and is renovating and converting them into apartments. This single development, called West End City Apartments, is located in the Central West End district of St. Louis. The area was chosen for its proximity to Washington University, well-known Forest Park, major city hospitals and a lively nightlife. The 320-unit community offers high ceilings and wood floors, and has as all the modern elements of a new development along with some historic aspects.

Village Green also recently completed Loring Park City Apartments in downtown Minneapolis. Inspired by the classic architecture of London’s premier neighborhoods, this 164-unit development offers wood floors, island kitchens, and a private garden plaza in the center of the community with an outdoor fountain and fireplace.

©2003 France Publications, Inc. Duplication or reproduction of this article not permitted without authorization from France Publications, Inc. For information on reprints of this article contact Barbara Sherer at (630) 554-6054.