gary bechtel GaryBechtel

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“Millennials are moving to the extremes when it comes tomultifamily housing preferences, and developers should begin totake note,” Gary Bechtel, president oftech-enabled commercial real estate lenderMoney360, tells Bechtel has seenshifting housing demand in the market among millennial and gen-Zrenters, with shared co-living spaces rising in demand on one endof the spectrum and luxury apartment living on the other. Thesechanges in housing demand should be informing investment strategyin the multifamily sector.


“Over just the past couple of years, millennial demand created anew multifamily asset class called co-living spaces, which functionmore like dorm living than apartment living where an individualrents his or her own private bedroom but shares common spaces likethe kitchen and living room with other renters,” says Bechtel.


Shared co-living spaces are relatively new to the market, butseveral operators have sprung up quickly to bring new assets to themarket. These spaces are largely an effect of the rising cost ofrent. However, they work for younger millennials and gen-Z rentersthat don’t mind shared living and want an operator to take care ofessentials. For investors, however, these spaces come with moreintense property management requirements. “The benefit of thisliving style for developers and investors is the ability to createmore revenue producing rooms, out of similarfixed square footage,” says Bechtel. “However, there aretradeoffs: rents tend to be less and these propertiesoften require more active building maintenance for the sharedspaces.”


Millennials are also driving demand for high-end andtech-infused living spaces that come with onsite amenities. “On theother end of the spectrum, millennials, especially thosethat are established in their careers, have shown greater appetitefor luxury buildings than generations before them,” says Bechtel.“No longer do fitness centers and pools constitute upgradedamenities; millennials are demanding high tech offerings likekeyless entry and uninterrupted high-speed wi-fi, and hotel-styleservices like concierges and tenant programming.”


These properties attract renters, but at a high cost of rent.During a downturn, these properties could see higher occupancyrates. “Luxury buildings demand luxury lease rates and attract amore established clientele base,” says Bechtel. “However,developers and investors should take steps now to protectthemselves against a potential economic downturn, which typicallyaffects upper-end real estate more and earlier than more affordableproperties.”

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Kelsi Maree Borland

Kelsi Maree Borland is a freelance journalist and magazine writer based in Los Angeles, California. For more than 5 years, she has extensively reported on the commercial real estate industry, covering major deals across all commercial asset classes, investment strategy and capital markets trends, market commentary, economic trends and new technologies disrupting and revolutionizing the industry. Her work appears daily on and regularly in Real Estate Forum Magazine. As a magazine writer, she covers lifestyle and travel trends. Her work has appeared in Angeleno, Los Angeles Magazine, Travel and Leisure and more.