Garden-Style Apartments Will Be a Winning Investment in This Pandemic

Garden-style apartments are expected to not only weather the coronavirus pandemic, but to remain a favorite among real estate investors for the upcoming decade. The asset class offers socially distant yet quality living to renters and unbeatable value-add opportunities to investors.

Suburban garden-style communities are expected to weather the pandemic and its lingering effects quite well, according to a recent article published by National Real Estate Investor, an analytics and media outlet focused on the commercial real estate industry. The article points out a few factors contributing to the resilience and potential of this particular type of multifamily real estate.

Health Considerations
Garden-style apartments have a number of unique features that appeal to our current mindset of social distancing and self-isolation. Such properties typically offer exterior access to individual units and outdoor common areas and amenities, as opposed to high-rise urban complexes that feature indoor hallways, staircases, and elevators. They also tend to have rich landscaping and lower resident density. These characteristics will continue attracting residents looking for open space and fresh air while staying socially distant.

Value-Add Opportunities
Older garden-style properties also offer great value-add opportunities to investors. Typically Class B or Class C, these properties are often in need of repairs, interior and exterior remodeling, and amenity upgrades. Such improvements can significantly boost the property’s occupancy rate and net operating income, while maintaining a lower price point. This value-add potential is what makes the asset class one of the best investment opportunities in commercial real estate.

Location Advantage
Garden-style communities are usually located in suburban areas, close to job centers such as office parks and manufacturing facilities, as well as schools and regional shopping. As more companies leave the downtown business districts, garden-style apartments will be able to offer the workforce high-quality yet affordable housing options. In today’s unpredictable economic climate, garden-style apartments will be especially appealing to young professionals, who already prefer renting and are looking for a quality lifestyle.

The popularity of garden-style multifamily is expected to outlive the COVID-19 pandemic as most people will remain health-conscious and wary of social contact. Over the next ten years, these properties will also remain the top choice of investors who understand the resilience and value-add potential of the asset class.

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