As 2016 nears an end, we here at Red Propeller decided it would be a good time to update our friends and partners about what we’ve been up to this year, trends we’re seeing across markets and some recent developments that we have found interesting and inspiring.
2016 year in review
In 2016, we grew our reach to 31 markets in 13 states, one Canadian province and one Mexican state. Here are notable successes we had with our partners, detailed by our four “buckets” of work.
Condominium sales and marketing
We sold out all 168 homes in Luma, a condominium tower in Seattle’s First Hill neighborhood, in less than three months after opening the building, at an average sales price of $697,000. We executed a focused, innovative sales and marketing plan and budget that ensured maximum return on every dollar. We thank our co-listing partner McAvoy Real Estate and creative partner DEI Creative, and congratulate developer Lowe Enterprises and architect/interior designer Weber Thompson on a successful project.
Pre-development consulting/project strategy development
In 2016, we executed market audits for more than 8,500 units of housing in six states and three countries. Our market audits provide detailed insight into the area a new development project is part of and the positioning opportunities in the market. We recommend project positioning, including the best target audiences, and bring this positioning to life through units, amenities, building character and the story of the new community.
Marketing strategy and execution
In 2016 we created buzz-building, traffic-driving strategies to launch 10 new projects, containing more than 2,500 units, into the marketplace. In addition, we developed names and brands for 12 developments that now have personalized and targeted identities. Results from our work stand out with projects like The Luke
, an apartment community that set a record for downtown Redmond, Washington, when it sold for $354,657/door ($74 million in total) in November 2015.
The Luke, sourced from Greystar
We’re extremely proud to have helped with the marketing efforts for two NAIOP Night of the Stars winners: GID Development’s Cirrus
tower, in Seattle’s Denny Triangle, and Pike Motorworks
, by the Wolff Company, on Capitol Hill in Seattle.
Cirrus (top) and Pike Motorworks, sourced from building websites
In 2016, Red Propeller developed and led three-day training programs for leasing teams at six new developments in Arizona, Texas, Florida and North Carolina. Our approach taught teams how to shift from a commoditized focus on product to selling by communicating the story, brand and experience of living in each new community. The results have been extremely positive. Immediately after our training at Crescent Dilworth in Charlotte, the project was outleasing its direct competition in lease-ups by nearly 4:1 without offering any incentives. As some U.S. markets are expected to soften in 2017, we believe success will depend on the ability of on-site leasing teams to tell a project’s story in an effective and compelling way.
News you can use
People often ask us what common threads we’re seeing across North American markets that we work in. And trends are ringing true from coast to coast and north to south. In fact, we’ve probably seen enough common threads just in the past year to knit a sweater. For now, here’s the scarf version.
Empty nesters are trying out urban living
First off, while many developers rightly focus on millennials, empty nesters are also trying out urban living. Sometimes this means selling their house and renting an apartment, sometimes they’re renting to see if they like the experience before they sell their home.
These empty nesters are looking for much of the same things that millennials want – walkability, the benefits and services of renting vs. owning, diversity of experiences, trading stuff for experiences and the ability to lock and leave their homes. Despite these commonalities, successful projects are taking steps in design and service offerings that specifically appeal to empty nesters.
Millennials are maturing
The oldest millennials turned 36 in 2016. Many maturing Millennials still want to rent in urban centers, but their needs are changing.
This includes basics like apartment sizes – they increasingly need and are able to afford more space, while many projects targeting Millennials are still focusing on studios. But it’s also about things like design and amenities. Maturing Millennials are no longer fresh from college, and are developing a taste for a more refined, elevated lifestyle.
Sourced from Goldman Sachs
More people are renters by choice
Many empty nesters and maturing Millennials are among the increasing cohort of people who can afford to buy a home but are choosing to rent over purchasing. This is becoming more and more common in many urban and even suburban markets where renting previously was something people only did until they could afford to buy.
People like the flexibility and lock-and-go lifestyle that renting provides. These renters demand a higher level of engagement and service than many rental communities offered in the past. This includes having a rental and management team that understands the experiences and needs of this audience, so they can positively engage with and relate to these residents. Renters by choice also often have increased expectations and needs for features and services, such as technology included in buildings, parking, package delivery and concierge service.
Projects with stories do better
Across the country, experience shows that projects with stories outperform developments that just focus on checking boxes for features and amenities. The right story connects with residents and potential residents at an emotional level, making them feel a community has been crafted for people like them and represents who they are.
We’ve been fortunate to work with developers, architects and designers to develop targeted stories and implementation strategies for a myriad of projects across the country. In 2017, we will be launching several storied projects that are sure to be differentiated in the marketplace.
For-sale product is lacking
There’s a significant lack of for-sale product, despite high demand for condominium living in many markets. While new condo deliveries have risen since the depths of the recession, they’re still well below anything seen in the past four decades, excluding the recession.
Nationwide, between 1974 and 2015, the average number of condos delivered each year was 88,143. This surged to 134,000 from 2004 through 2007. Since the market collapsed in 2007, this has plummeted to 26,000 – 29% of the average and 19% of the recent peak.
Data source: U.S. Census Bureau
We’ve seen some amazing ideas realized in projects across the country lately. Here are some of our recent favorites.
The Residence Buckhead Atlanta Mansion
OliverMcMillan evoked the essence of the historic Buckhead community with the Mansion at The Residence Buckhead Atlanta
. Located on the eighth-floor community deck, between two modern 20-story towers, the mansion incorporates such authentic features as ornate white brickwork, wood shutters, a slate roof and copper detailing.
It contains a fitness room, movie theater and club room with a kitchen. The property was the centerpiece of Atlanta Buckhead, a spectacular mixed-use development (residential, retail and office) that is redefining the Buckhead experience.
Sourced from Simpson Property Group
Hecht Warehouse, Washington, D.C.
Douglas Development created this exceptional adaptive reuse project
, leveraging the old Hecht department store warehouse in the Ivy City neighborhood of Washington, D.C. The resulting retail and residential community maintains historic features, like exposed brick and glass block, and incorporates new touches that honor the site’s history.
Notably, a lobby sculpture was fashioned from a piece of machinery salvaged from the original building. The quality of the project is overcoming the very early emergence of its highly transitional neighborhood.
Sourced from Douglas Development
Deep Ellum 42 Murals, Dallas
Dallas’ 42 Real Estate has been the driving force in invigorating Deep Ellum, with one very visible manifestation being the 42Murals
project. The project honors Deep Ellum’s legacy as a center for the arts by allowing artists to showcase their work on walls of historic buildings throughout the neighborhood.
Over 300 artists applied to do a mural, and those selected range from locals to international artists, and a 14-year-old girl to a 60-something grandmother who had never painted murals before.
Artist Michael McPheeters’ work “Deep Elm,” sourced from 42 Galleries
BosaSPACE, Surrey, British Columbia
While working on a project in Surrey, we came across BosaSPACE
, Bosa Properties’ ingenious, trademarked solution for small-space living.
Making use of a sliding wall, an extending table/desk, a bed that folds away to reveal a sofa and a fold-down couch/guest bed, residents of a small one-bedroom home can host a dinner for eight, accommodate all of their guests in an extended living room after dinner and then recreate their bedroom, and even have a guest sleep over.
BosaSPACE foldaway bed/couch, sourced from Bosa Properties
315 on A Apartments, Boston
The 315 on A Apartments
project is on a site formerly used by the Dwinell-Wright coffee and tea company, in the Fort Point Channel area of South Boston.
It’s a great example of bringing new construction into a historic district of a dense city with few opportunities for new construction. Gerding Edlen built the project and has since sold it to Equity Residential.
Sourced from Equity Residential
That’s a lot for one year! We’re excited to continue working with all of our development partners to develop successful projects with better-than-market results in 2017.