Multifamily real estate is at a turning point. After a decade-long bull run of increasing rent growth and compressing cap rates, things have started to slow down. The demand for multifamily housing remains high due to the ongoing housing shortage, but the slowing economy is making renters more price-sensitive. In fact, almost half of U.S. markets saw multifamily rental prices drop over the last year. At the same time, inflation has made it much harder for multifamily owners. The cost of running a building continues to increase, and interest rates are higher than they have been in nearly half a century. Even if inflation cools and rates decrease, the sector will remain competitive. More investors are pouring into the space, many from other property sectors, and more new apartments are coming on the market in 2024 than in any year since Richard Nixon was president.
These factors have forced the multifamily industry to innovate, and it has innovated. Developers are finding new ways to fit more units into less space, engineers are working to make buildings as efficient as possible, and owners are introducing new services and adding impressive amenities.
To showcase the innovation happening in multifamily right now, we have put together a showcase of innovative multifamily properties. Each property has been selected from a long list of great candidates for its uniqueness and ability to solve some of the problems currently facing the industry.
Solara in Rotterdam, New York
Most multifamily properties strive to be more sustainable, but few achieve “net zero” status. Solara, an 11-building, 340,000-square-foot property in Rotterdam, New York, has managed to do so. The developer, Bruns Realty Group, previously completed New York’s first-ever net zero multifamily development, netZero Village, and applied their learnings to this three-phase project.
Solara features an efficient design that leverages renewable energy sources in multiple ways. The entire carport is covered with solar panels, producing 153,000 kilowatts per year, enough to power the entire property. Each building has its own solar-powered direct hot water system, supplemented by air-to-water heat pumps. The property also includes a solar-heated pool and 36 EV charging stations.
While Solara’s on-site energy generation is impressive, its methods for reducing consumption are even more noteworthy. The development, a two-time winner of NYSERDA’s Buildings of Excellence award, is incredibly well-insulated with a thick layer of foam on the roof and walls, as well as a vented “mini-attic.” The design team used the Passive House Planning Package to model energy consumption and incorporated several passive solar strategies, such as orienting buildings to maximize daylight in the winter and adding exterior shading to block the sun during peak heat hours in the summer. To dispel the myth that net zero buildings require expensive, state-of-the-art materials, Bruns Realty intentionally used cost-effective, commonly available materials and traditional construction techniques.
Vero in Tempe, Arizona
Walkability and a car-free lifestyle used to be achievable only in dense urban areas, but buildings like Vero in Tempe, Arizona, are challenging that notion. Built within Arizona State University’s Novus Innovation Corridor, the 200-unit, seven-story development offers an urban lifestyle in an area known for its sprawling suburbs. The large student population in the area meant that rents needed to be kept as low as possible. Vero achieved this by shrinking rooms to as small as 360 square feet. Many units are rented furnished and include space-saving furniture like Murphy beds.
Proximity to nearby transit stations and the mixed-use nature of the surrounding innovation park allowed developers to reduce parking significantly compared to typical Sunbelt markets. Parking is not included in the rent, so many residents prefer to forgo a spot. This has helped Vero achieve a parking ratio of 0.7 spaces per unit, compared to the area average of around 1.15. This innovative approach not only reduces costs but also encourages a more sustainable lifestyle among residents.
Despite the focus on affordability, Vero offers several high-end amenities, including a fitness center, co-working space, and a dog wash station. Forty of the units are studios that still provide space for full-sized appliances, storage, and bathtubs. The property also includes communal spaces that foster a sense of community among residents, such as shared lounges and outdoor seating areas. Vero’s connection to surrounding offices and school facilities makes it attractive to both students and young professionals. The building’s design echoes this youthful yet sophisticated vibe with bold yet elegant accents and fixtures, creating a stylish and inviting living environment.
Optima Verdana in Wilmette, Illinois
“Biophilic” is a word frequently used in the architecture and design worlds, often implying little more than an abundance of indoor plants. However, the Optima Verdana building stands out for its truly biophilic design, using plants not only to enhance the local ecosystem but also to provide the building with added functionality. This 100-unit building features self-watering troughs on each balcony, growing cascading plants that hang like curtains once fully grown. According to David Hovey Jr., president and COO at Optima Inc., these plant curtains “promote evaporative cooling, re-oxygenate the air, reduce dust, smog levels, and ambient noise, detain stormwater, help insulate the building, and shield residents from the sun’s rays.” Hovey and his team tested different bed designs and evaluated various types of plants to ensure a suitable option that looks good year-round.
Optima Verdana was designed to be Two Green Globes Certified, a designation given by the Green Building Initiative. This certification considers sustainability, occupant health, and building resiliency. Low-carbon concrete was used in the construction, and all windows are made with bird-friendly glass on the first three stories. To foster community, the property offers numerous amenities, including a recreation center with a wood court for basketball or pickleball, a golf simulator, and a game room. The rooftop features perhaps Optima Verdana’s most impressive amenity: an indoor/outdoor pool encased in retractable glass for year-round use.
Optima Verdana demonstrates that sustainable design does not have to impede resident comfort; it can, in fact, enhance it. Extras like complimentary coffee and towel service are ecological ways the building provides a better experience for residents.
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