Millennials and downsizers find common housing ground in new suburban developments
While record numbers of luxury high-rise apartment towers are rising up in Chicago - in 2017, developers completed 4,348 apartments in the greater downtown Chicago area, the most ever in one year, according to a report from consulting firm Integra Realty Resources - the Northwest suburbs are experiencing a building boom of their own.
As millennials hit the pivotal age for starting families and reaching their earning potential, many are looking to the suburbs for more space, good public schools and a less hectic pace of life. At the same time, some older buyers are looking for a maintenance-free lifestyle closer to an active suburban downtown.
So, is there housing product that will satisfy both of these key demographics simultaneously? Yes and no.
As a construction firm working on multifamily projects across the Northwest suburbs, we have a unique perspective on the needs of these two groups. One key insight is that while empty nesters and millennials are both transitioning to new phases of life - albeit different stages - they have very similar housing wish lists.
Renting a luxury lifestyle
For the past five years, we have seen an uptick in rental development in the suburbs, particularly with luxury apartment communities. According to data from Marcus & Millichap and MPF Research, rental construction reached its highest level in more than a decade last year in the Chicago suburbs, and 2018 is shaping up as another busy year. More than 4,200 units were completed in 2017, and about 3,900 more units are projected for this year.
These projects are drawing millennials, baby boomers, single parents and work transferees, due to their refined and sophisticated features, such as high-end appliances, stylish finishes, gourmet kitchens and spacious bedrooms.
Clubhouses are a must-have at these communities, with amenities like a theater room, entertainment space, fitness center, pool, dog runs, fire pits and grills.
Another increasingly important factor in today's suburban rental climate is location. While many millennials, which is a generation 71 million strong and rivals only boomers at 74 million, according to the U.S. Census Bureau, are heading to the suburbs, there are aspects of urban life they are not willing to forgo. Foremost is a home in a walkable location to public transit as well as restaurants, shopping and entertainment.
One local example of this is our Deer Park Crossing project in Deer Park. Located just steps from the popular Deer Park Town Center lifestyle center, the 256-unit community offers a mix of apartments and rental townhomes.
Look for thriving suburban downtowns with access to the Metra, such as Glen Ellyn, Downers Grove and Elmhurst, as areas where developers are looking to build high-end rental to meet the current demand.
The rise of the townhome
As recently noted by Forbes, there's also been an increase in suburban for-sale multifamily development, particularly with townhomes near strong suburban downtown districts.
Take Roslyn Meadows, a small community of 14 luxury townhomes in downtown Barrington, as an example.
While families like being in Barrington's great school district, the community also has a floor plan with a first-floor master suite to appeal to older buyers. We also are building 18 townhomes at the Port Clinton community near the Vernon Hills Town Center.
Both developments are expected to draw young couples and families, as well as downsizers, looking for the benefits of homeownership, but with a low-maintenance lifestyle.
Aging Boomers reshaping real estate
According to the U.S. Census Bureau, by 2029, more than 20 percent of the total U.S. population will be over the age of 65.
As this generation ages, supplying suburban multifamily housing for this segment will play a big factor in the local real estate market.
Therefore, one area of the burgeoning multifamily market that will not experience crossover between millennials and downsizers will be senior lifestyle developments.
One particular sector of senior development where we see growth are communities with specialized care components, like Verandah, an age-restricted community we're working on in Hanover Park. Designed for ages 55 and over, Verandah offers a creative mix of independent living townhomes, villas and condos, as well as assisted living studios and memory care services, along with indoor and outdoor on-site amenities.
In sum, there is no shortage of opportunities for developers to deliver housing that will meet the needs of buyers young and old throughout the suburbs.
And many times, these communities have more in common than you may think.
• Steve Spinell is principal of Kinzie Real Estate Group, which has offices in Vernon Hills and Chicago.