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 GlobeSt.com. 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.”