Luxury is a key word for multifamily developments around the country, but what exactly defines this extravagance? A local builder-integrator team in Kansas City, Missouri is looking for the answer.
“Think about your standard host of amenities [in multifamily]. The pool. The community rooms. The wine lockers,” says Mark Moberly, director of development for Sunflower Development Group.
“We were trying to come up with something that was the next stage of luxury through amenities. This is important in multifamily, particularly when you’re going after Millennials who use their phones for everything.”
To accomplish this aspiration, Sunflower Development Group executed a steady course of action. First, it invested in a local tech incubator, Think Big Partners, to form Homebase Technologies. Moberly studied the trends of single-family housing and the integrated technologies within these homes, but he realized that most renters would never voluntarily install these amenities into a place where they may only be residing for 12 months or less.
“So that’s how the conversation started,” says Moberly. “How do we separate ourselves from the competition through luxury and amenities, and then, how do we give something to our Millennial renters that they would expect in any other part of their life that they don’t have in their living situation?”
Challenges – Perspective and Pricing
From conversation phase to full realization, Sunflower Development and Homebase Technologies have combined forces to convert an old office building in the heart of Kansas City into a tech-savvy multifamily development.
The project is currently wrapping up its design stage, and Moberly says the biggest challenge has been exploring amenity options from the perspective of both the landlord and the tenant. “For a landlord, this is a paradigm shift in terms of how you are managing your building. One of the other challenges was working with property managers and figuring out what would work best for them,” says Moberly.
Part of the solutions comes through a customized app that controls components for both renter and property manager.
“There was an opportunity not just to put new technology in but also to create a service for property managers to manage payments, request maintenance and more,” says Blake Miller, CEO of Homebase Technologies.
The app streamlines the multifamily experience for everyone involved and creates a unified location to control the variety of technologies that will be included on the project—smart locks from Kwikset and Unikey, thermostats from ecobee and Nest and controllable lighting from LIFX and Philips Hue.
With these technologies comes another issue, how exactly should Sunflower price the project? It’s an issue that surely many multifamily developers have faced as they integrate tech.
“Is it an upfront fee, and then it’s done? Or, are we going to install it all for nothing and then make it an ongoing monthly fee? We are trying to figure out from a developer standpoint, where are our sensitivities and what can we afford to do?” asks Moberly.
Successes and Sage Advice
As for successes with Traders on Grand, Sunflower Development has already received positive responses from industry peers regarding the project.
“They’ve been looking for something like this but just haven’t taken the steps to design their own platform,” says Moberly, who adds that he hopes to take what he’s learned from this development and transfer it to developers embarking on even larger endeavors.
“We want to be able to go to a developer with 10,000 units, show them what we’ve done with just 200 apartments and then ask them to imagine that success on an even larger scale.”
However, Moberly offers a piece of crucial advice for developers looking to get their feet wet with technology … always be thinking about the future.
“You need to be thinking three to five years out. If there is emerging technology, you need to be thinking how it could integrate into your building today,” says Moberly.
This is sage advice, considering many multifamily properties can take up to two years to build.
“You don’t want to be behind the curve by the time you open!” says Moberly.
Stay tuned for a follow-up story as we track the progress of Traders on Grand and dig into Kansas City’s unique smart city initiative.
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