Multifamily real estate is at a turning point. After a decade-long bull market of rising rents and cap rate compression, things are starting to slow. Demand for multifamily remains high due to a continuing housing shortage, but the economic slowdown has made renters price sensitive. In fact, in nearly half of U.S. markets, apartment rental prices have fallen in the past year. At the same time, inflation is making it much harder to become an apartment owner. The cost of operating a building continues to increase, and interest rates are the highest they have been in nearly half a century. Even if inflation subsides and interest rates fall, the sector will remain competitive. More investors, mainly from other real estate sectors, are entering the space, and more new apartments are scheduled to hit the market in 2024 than at any time since the days of President Richard Nixon.
These factors have forced the multifamily industry to innovate, and they have: Developers are finding new ways to fit more units into smaller spaces, 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 housing right now, we created a showcase of innovative multifamily properties. Each property was selected from a large number of outstanding candidates for its uniqueness and ability to solve some of the problems the industry currently faces.
Solara, Rotterdam, New York
Solara is the largest net-zero apartment community in the United States (Credit: Solara)
While most multifamily buildings aim to become more sustainable, few have achieved “net zero” status. Solara, an 11-building, 340,000-square-foot property in Rotterdam, New York, has done just that. Developer Bruns Realty Group previously completed New York’s first net-zero multifamily development, netZero Village, and applied learnings from that experience to this three-phase project.
Solara features an efficient design that utilizes renewable energy sources in multiple ways. The entire carport is covered in solar panels, capable of producing 153,000 kilowatts per year to power the entire site. Each building has its own solar-powered direct hot water system, supplemented by air-to-water heat pumps. The site also features a solar-heated swimming pool and 36 EV charging stations.
Solara's on-site energy generation is impressive, but the way it reduces consumption is even more remarkable. A two-time winner of NYSERDA's Buildings of Excellence award, the development is incredibly well insulated, with thick layers of foam on the roof and walls and a vented “mini-attic.” The design team used a Passive House planning package to model energy consumption and incorporated several passive solar strategies, such as positioning the building to maximize daylight in the winter and adding exterior shading to block the sun during the hottest hours of the summer. To dispel the misconception that a net-zero building requires expensive, cutting-edge materials, Bruns Realty purposefully used cost-effective, commonly available materials and traditional construction techniques.
Read more about Solara
Vero in Tempe, Arizona
Vero offers urban living in Tempe with compact units and an emphasis on walkability. (Credit: Vero)
Walkability and a car-free lifestyle once seemed possible only in densely populated 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 a suburban sprawl. Because of the area's large student population, rent prices needed to be kept as low as possible. Vero accomplished this by shrinking rooms to as little as 360 square feet. Many units are rented fully furnished, including space-saving furniture like Murphy beds.
The proximity to nearby transit stations and the mixed-use surrounding Innovation Park allowed the developer to reduce parking requirements significantly compared to typical Sunbelt markets, where many residents give up parking spaces because parking isn't included in the rent. This has allowed Vero to offer 0.7 parking spaces per unit, compared to the area average of about 1.15. This innovative approach not only saves costs, but also promotes a more sustainable lifestyle for residents.
Despite its focus on affordability, Vero offers several upscale amenities, including a fitness center, co-working space, and dog-washing stations. Forty of the units are studios, but they also offer space for full-size appliances, storage, and bathtubs. The property also features shared spaces, including a communal lounge and outdoor seating areas, that foster a sense of community among residents. Vero is connected to surrounding office and school facilities, making it attractive to both students and young professionals. The building's design reflects a youthful and sophisticated vibe with bold, yet elegant accents and fixtures, creating a stylish and inviting living environment.
Optima Verdana, Wilmette, Illinois
Optima Verdana's biophilic design features self-watering plant curtains that improve air quality and insulation. (Credit: Bill Timmerman)
“Biophilic” is a word that gets thrown around a lot in the architecture and design world, and it often means nothing more than having lots of plants indoors. But the Optima Verdana building stands out with a truly biophilic design that uses plants not only to enhance the local ecosystem but also to add functionality to the building. The 100-unit building has automated watering troughs on each balcony that house plants that grow into curtains of waterfall-like plants. According to David Hovey, president and COO of Optima, these curtains of plants “promote evaporative cooling, replenish oxygen to the air, reduce dust, smog levels, and ambient noise, contain stormwater, insulate the building, and protect occupants from the sun's rays.” Hovey and his team tested different flowerbed designs and evaluated different types of plants to ensure they had the right options that would look good all year round.
Optima Verdana was designed to achieve two Green Globe certifications awarded by the Green Building Initiative. This certification takes into account sustainability, occupant health and building durability. Low-carbon concrete was used in construction and all windows are made with bird-friendly glass. To foster community, the property offers numerous amenities, including a recreation center with wooden courts for basketball and pickleball, a golf simulator and a game room. On the rooftop, perhaps Optima Verdana's most impressive amenity is an indoor/outdoor pool covered with retractable glass for year-round use.
Optima Verdana shows that sustainable design can enhance occupant comfort, not hinder it. Perks like free coffee and towel service are environmentally friendly ways for buildings to provide a better experience for their residents.
Niche, Tampa, Florida
Niche combines affordability with luxury, using transformable furniture and cement plinths for added height. (Credit: Niche)
Most of us want housing to be affordable, but the term “affordable housing” can have a negative connotation due to the proliferation of unattractive, low-quality affordable housing complexes. That may be why Jason Macklin, development director at Wingspan Development Group, the team behind Niche, prefers to call it “reachable” housing. “We're not a high-rise developer, so we're targeting the urban market just outside of downtown, where we can achieve lower prices than downtown rents,” says Macklin. Keeping rents affordable was a key consideration in the building's design.
Niche is designed primarily with wood, helping to keep material costs down; however, some tweaks have been made to the design to address some of the drawbacks of wood construction. To add height (Tampa codes limit wood buildings to six stories), the Wingspan team built a cement ground-floor “pedestal,” which allows for an additional floor to be added, allowing the small corner lot to accommodate 251 units. The wood structure is also built around a cement parking garage, which serves a dual purpose: covered parking and a community rooftop pool.
What's most unique about the Niche building are its furnishing options, with cutting-edge, transformable furniture. Some of the building's units have Ori beds that retract into the ceiling to create more living space during the day. The smallest units also include some Ori “pocket studios,” with a desk on one side and a bed or closet on the other. Niche's success proves that with the right design and furniture, a luxury lifestyle can still be achieved.
Niche also offers a variety of amenities designed to enhance the living experience while keeping costs down, including a fitness center, co-working space and shared lounge areas. The building's location allows easy access to public transportation and the conveniences of nearby cities, making it an attractive option for young professionals and families alike. With a focus on both affordability and quality, Niche serves as a great example of what affordable housing can be achieved.
Read more about Niche
The George in San Francisco
The George blends community arts and culture with modern living in San Francisco's SoMa neighborhood. (Photo courtesy of Brookfield)
A common criticism of any new large-scale development is that it could displace long-time residents and change the cultural fabric of a neighborhood. When Brookfield was selected as the developer for a 1.7 million square foot site in San Francisco's SoMa neighborhood, they had a clear mission to not only respect but enhance the area's cultural heritage. In 2016, SoMa became San Francisco's Philippine Cultural Heritage District, and the City was deeply committed to transforming the 5M Project into a true arts and culture mixed-use center. “From affordable housing to new outdoor spaces and cultural programming, this community-driven project will address a wide range of neighborhood needs that have long been neglected,” said San Francisco Mayor London Breed.
The George is the largest apartment complex in the 5M plan. It will have 21 floors and 302 units, including 71 studios, 103 one-bedrooms, and 128 two-bedrooms. 91 of the units will be priced below market rate, targeting moderate-income renters who earn 100-150% of the area median income. The building was designed with input from dozens of local partners and is both LEED Social Equity Innovation Certified and 2-Star Fitwell Certified. The George offers many “supportive housing” and moderate-income units, and an easy online portal to help prospective tenants navigate their options. Standout amenities include a professional bar (named after local Olympic gold medalist and proud Filipina Vicky Manalo Draves) that residents can book, and a private library with an impressive selection of books.
The 5M development also includes a neighborhood park and sculpture garden. To support local artists, Brookfield donated a renovated historic building to the Community Arts Stabilization Trust, which uses the space for cultural, arts, and education programs. “Arts and culture organizations like Women's Audio Mission and PUSH Dance are so important to our city because they push the boundaries of creativity and equity while also creating community cohesion,” said Moi Eng, CEO of Community Arts Stabilization Trust. The building already houses several important local organizations, including Women's Audio Mission, a nonprofit dedicated to advancing women in music production and recording arts, and Push Dance Company, a studio dedicated to “restorative dance practices.”
The 5M Project demonstrates that large-scale development can be thoughtfully integrated into a community, preserving and enhancing cultural heritage while meeting modern needs.