Luxury rentals are here – and likely are here to stay.
This escalation in construction of luxury apartments –
new or renovated – in the Greater Lehigh Valley is driven by opposite ends of
the market’s age spectrum and is occurring in its cities and suburbs.
It’s why experts say interest in luxury living is
stronger than it has ever been.
Younger people with higher incomes enjoy the benefits of
renting without the burdens of owning a home. And older people like the
convenience of apartment living with high-end features and low maintenance.
Luxury apartments can be fairly spacious too, adding
amenities that replicate the feel of living in a house. High ceilings, walk-in
closets, granite countertops and the inclusion of washers and dryers within the
units are examples of high-end features found in many of these communities.
The addition of shared outdoor spaces for community
pools, dog parks and patio areas adds to the appeal for some.
“Young professionals and even people who are looking to
possibly retire in five years don’t want the upkeep and maintenance tied to
owning a house,” said Michael Chervanick, owner of Chevrock Property and
Construction Services in Reading.
People are willing to pay a premium for these apartments
too, with prices that generally start well above $1,000 for a one-bedroom unit.
Furthermore, consumers who might be interested in owning
a home are still feeling the pinch of the housing crisis, which left a
considerable trace of anxiety on the psyche of the would-be homeowner that’s
hard to erase.
In turn, renting an apartment is increasingly seen as a
less risky venture. Millennials (who are born after 1980 and the nation’s
largest population) increasingly are choosing apartments over first homes and
deciding to settle down later.
Not to be outdone, more aging baby boomers are looking to
retire or at least sell their home and move into something smaller and more
manageable.
With more businesses moving to the region, an influx of
demand for luxury living space naturally follows, particularly for office
workers. A clear example of this is in downtown Allentown where residential
projects are underway and in development in the core of the city.
Finally, the abundance of older, historical buildings
throughout the Greater Lehigh Valley is giving developers and investors the
chance to transform these rich structures into residential units. More often
than not, the units are designed with luxury in mind.
OLD BUILDINGS, NEW USES
Sometimes, older buildings provide excellent fodder for
new luxurious living spaces.
A few years ago, Chervanick bought an old building on
Fairview Avenue in Wyomissing near borough hall that had sat empty since about
1990. It once was home to the Iris Social Club, a popular destination for
weddings and events. Chervanick wanted to put it back to productive use after
seeing the building vacant so long.
“The building lent itself to be split up into
apartments,” he said. “It had a ton of character with the brick and stone. The
building has a lot of historical significance.”
He transformed the building into Iris Club Luxury
Apartments, a site with six units that’s fully occupied.
“There are not a lot of really nice apartments in the
area,” Chervanick said.
The units range from 1,300 to 2,800 square feet and
include amenities such as central air, granite countertops, exposed brick walls
and hardwood floors, he said. Rents are $1,400 to $2,600.
“If you are in a town that’s desirable and there’s
nowhere to build new, that’s challenging,” Chervanick said. “So your only
option is to demolish something or find something you can convert.”
TRANSFORMATION
The region is filled with projects, many under
construction, that point to the trend in adaptive reuse of vacant properties.
In Easton, VM Development created Pomeroy’s Lofts, a
project that took an older unused blighted property and transformed it into a
commercial space with two restaurants on the ground floor and upscale
apartments on floors above.
Mark Mulligan, the company’s CEO, also is bringing 50
upscale residential units to the vacant, historic Governor Wolf Building in
Easton.
EARLY PIONEER
Luxury apartment living wasn’t always a hot prospect in
the Greater Lehigh Valley.
The standard brick garden apartment complex, built over a
parking lot and with few amenities, was typical for residential development
until nearly 10 years ago.
Woodmont Properties, a real estate company in Fairfield,
N.J., began developing its first community, Woodmont Mews at Bethlehem, in 2006
near the exit for Eighth Avenue and Route 378 and finished it in 2008.
Woodmont Mews was one of the early luxury communities in
the Lehigh Valley, said Stephen Santola, executive vice president and general
counsel for Woodmont Properties and Woodmont Industrial Properties.
“There were very little particularly high-end rental
properties being built in this area,” he said. “That created a void in the
market. From the Lehigh Valley’s perspective, we like to think we were
pioneers.”
Woodmont moved on to Palmer Township to build its
Woodmont Place at Palmer project, which includes 216 units that opened in 2010.
The company started construction several months ago on a
third project, Woodmont Ridge in Upper Macungie Township, which includes 288 units,
while a fourth project recently earned approval in Lower Macungie Township for
204 units.
DOWNTOWN ALLENTOWN
One of the newest developments in luxury apartments to
arrive in the region is STRATA – The Lofts at City Center in downtown
Allentown.
The apartments are part of Four City Center, a mixed-use
building that includes several retail sites across from PPL Center and the
Renaissance Hotel by Marriott.
Tenants at STRATA started their move in July and the
spaces are filling up. It’s a project that offers a beacon of what’s to come in
luxury apartment living.
With 170 studio, one-bedroom and two-bedroom flats, the
project offers community wide Wi-Fi, a private green courtyard lounge and
rooftop party deck. It’s these high-end features that are pushing architects
and developers to elevate what people think apartment living in the Valley
looks like.
NICHE MARKET
Chervanick said there is a niche market for people who
want to rent a big apartment but not own a home and a second group of people
that want to pay a premium for a nicer apartment.
“I think it’s a number of factors,” Santola said. “First
of all, in the go-go housing days of the ’90s and early part of the new
millennium, new housing construction was the focus.”
However, this led to easy credit that led to a prime
lending crisis, which contributed to the recession, he said.
“We also have a significant number of millennials that
are looking to put together a down payment but they are not necessarily looking
to buy,” Santola said. “They are not that interested in owning a home.”
These younger people have more transient jobs, are
forming families later and they’ve seen their parents lose money in the housing
market and do not want the associated risks or the obligations of maintenance
with homeownership, he said.
GREEN SPACE, SPORTS BAR, POOL
About 20 percent to 28 percent of the residents in
Woodmont Properties’ luxury communities are 55 and older. These people may have
sold their homes and are looking to settle down, Santola added.
In contrast to the garden apartment-style, Woodmont
Properties offers amenities for its communities that include more green space,
walking trails, a clubhouse with a business center, sports bar, outdoor pool,
patios, dog-washing stations and bark parks (dog parks).
Inside features such as quartz countertops, which are
increasingly popular over granite, walk-in closets, double sinks and washers
and dryers inside units are examples of amenities that people want, he said.
“This is sort of the almost resort-style living in the
Lehigh Valley,” Santola said. “The concept has obviously caught on. We were
very pleased with the success, and there was no question in my mind that there
was a market.”
HIGH-RENT DISTRICT
Reasons for the growth of luxury apartments in the
Greater Lehigh Valley include:
·
Millennials aren’t necessarily looking to buy
homes, instead opting for the convenience and flexibility of renting.
·
Baby boomers want less maintenance and are
looking to downsize from homes.
·
There is better marketing of features such as
granite countertops and walk-in closets that give apartments the feel of a
high-end home.
·
It is seen as less risky than buying a home.
·
The growth of business in the region added office
workers, boosting demand.
·
There is an abundance of historical buildings in
the region available for transformation into luxury units.
Source: LVB
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