Why Is There So Much Luxury Development?

LOS ANGELES—Luxury multifamily is dominating the development pipeline in Los Angeles like never before—but how is there so much demand for luxury living in the city? According to Randy Fifiled, a principal at Century West Partners, there has been a fundamental shift in living preferences and it is driving demand for luxury rental spaces. To find about more about the luxury living space, we sat down with Fifield for an exclusive interview. Here, she tells us all about luxury living and why it is becoming so ubiquitous in Los Angeles.

GlobeSt.com: What factors are driving the increasing demand for luxury apartment rentals?

Randy Fifield: A fundamental change in preferences is behind the demand for luxury rentals. A growing number of 25 to 40 year olds now prefer to rent than own. This waning interest in homeownership is a marked shift from even just a handful of years ago. The demand however is also being driven by empty nesters in a different stage of life who are not only looking to downsize their living quarters, but who also refuse to compromise on amenities or high-end finishes.

GlobeSt.com: Can you expand on who exactly comprises the luxury renter demographic and why specifically these folks aren't choosing to buy homes now?

Fifield: In the last decade, the median age of downtown and city neighborhood renters moved from 26 to 33 years of age. 75% of these renters are single, however they now tend to continue to rent when they become couples. We are finding that this renter group is deferring condo and home purchases until they have children. This is our primary demographic.

GlobeSt.com: Explain the design considerations that must be met in order to meet the specific demands of today's renter who seeks a truly sophisticated living environment.

Fifield: The vast majority of urban renters in luxury buildings are more sophisticated. Over 90% are college graduates with a better eye for good design. They demand upgraded cabinets, quartz or granite countertops, stainless appliances, in-unit washer and dryer systems, plank floors, accent walls, double sinks, and closet organizers, among other things. In terms of community amenities, we are also adding in yoga rooms that double as spaces for bicycle spin classes, fitness on-demand, and for use of equipment including treadmills, stationary bikes and elliptical machines all with TV screens embedded in them. Additionally, WiFi lounges with color printers, and board and meeting rooms are especially important for the growing contingent that works from home. Media lounges, personalized outdoor grilling, dining areas with pergolas, cabanas with outdoor flatscreen TVs, traditional lap pools and hot tubs are all key for this audience as well. Wiring new communities with fiber optic cable to enable 100 mg to 1GB internet speeds is also of paramount importance as this renter demographic expects to easily stream Netflix and download shows and movies in a matter of seconds.

GlobeSt.com: Are specific regions hot spots for the development of upscale apartments?

Fifield: Urban areas, particularly on both coasts, are popular for this type of development as well as in places like Chicago, Dallas, Denver, and Austin. The main reason for this is because job growth is strong in these cities. Technology, financial and service focused companies are expanding the most of all industries in these cities. These cities are also where the “hippest” lifestyles are offered. Additional urban communities with high walk scores and a concentration of retail, jobs and access to light rail to larger nearby metropolitan areas are also hot. Some examples of places like these are Tysons Corner in Virginia, Evanston in Illinois, and Pasadena and Glendale in Southern California.

Steady gains in the US economy have resulted in net positives for the multifamily sector—will this wave continue for the foreseeable future? What's driving development and capital flows? Join us at RealShare Apartments on October 19 & 20 for impactful information from the leaders in the National multifamily space. Learn more.

LOS ANGELES—Luxury multifamily is dominating the development pipeline in Los Angeles like never before—but how is there so much demand for luxury living in the city? According to Randy Fifiled, a principal at Century West Partners, there has been a fundamental shift in living preferences and it is driving demand for luxury rental spaces. To find about more about the luxury living space, we sat down with Fifield for an exclusive interview. Here, she tells us all about luxury living and why it is becoming so ubiquitous in Los Angeles.

GlobeSt.com: What factors are driving the increasing demand for luxury apartment rentals?

Randy Fifield: A fundamental change in preferences is behind the demand for luxury rentals. A growing number of 25 to 40 year olds now prefer to rent than own. This waning interest in homeownership is a marked shift from even just a handful of years ago. The demand however is also being driven by empty nesters in a different stage of life who are not only looking to downsize their living quarters, but who also refuse to compromise on amenities or high-end finishes.

GlobeSt.com: Can you expand on who exactly comprises the luxury renter demographic and why specifically these folks aren't choosing to buy homes now?

Fifield: In the last decade, the median age of downtown and city neighborhood renters moved from 26 to 33 years of age. 75% of these renters are single, however they now tend to continue to rent when they become couples. We are finding that this renter group is deferring condo and home purchases until they have children. This is our primary demographic.

GlobeSt.com: Explain the design considerations that must be met in order to meet the specific demands of today's renter who seeks a truly sophisticated living environment.

Fifield: The vast majority of urban renters in luxury buildings are more sophisticated. Over 90% are college graduates with a better eye for good design. They demand upgraded cabinets, quartz or granite countertops, stainless appliances, in-unit washer and dryer systems, plank floors, accent walls, double sinks, and closet organizers, among other things. In terms of community amenities, we are also adding in yoga rooms that double as spaces for bicycle spin classes, fitness on-demand, and for use of equipment including treadmills, stationary bikes and elliptical machines all with TV screens embedded in them. Additionally, WiFi lounges with color printers, and board and meeting rooms are especially important for the growing contingent that works from home. Media lounges, personalized outdoor grilling, dining areas with pergolas, cabanas with outdoor flatscreen TVs, traditional lap pools and hot tubs are all key for this audience as well. Wiring new communities with fiber optic cable to enable 100 mg to 1GB internet speeds is also of paramount importance as this renter demographic expects to easily stream Netflix and download shows and movies in a matter of seconds.

GlobeSt.com: Are specific regions hot spots for the development of upscale apartments?

Fifield: Urban areas, particularly on both coasts, are popular for this type of development as well as in places like Chicago, Dallas, Denver, and Austin. The main reason for this is because job growth is strong in these cities. Technology, financial and service focused companies are expanding the most of all industries in these cities. These cities are also where the “hippest” lifestyles are offered. Additional urban communities with high walk scores and a concentration of retail, jobs and access to light rail to larger nearby metropolitan areas are also hot. Some examples of places like these are Tysons Corner in Virginia, Evanston in Illinois, and Pasadena and Glendale in Southern California.

Steady gains in the US economy have resulted in net positives for the multifamily sector—will this wave continue for the foreseeable future? What's driving development and capital flows? Join us at RealShare Apartments on October 19 & 20 for impactful information from the leaders in the National multifamily space. Learn more.