Choosing the right location for your next multifamily development

Decision has been made that you want to become a multifamily developer…. now the question arises of “Where do I build?” Choosing the right location combined with the correct timing and building at the correct cost can be a very complex matrix. In the recent 7 months the market has experienced a tremendous shift and what made sense in February will not necessarily make sense today.

Following market trends and being involved with current local, state and federal events is critical. Where are the jobs shifting to? How is the government changing and what does that mean for the local economy? Where are Whole Foods and Starbucks (yes that is a criteria) opening their new locations? These are just a few of the factors that developers need to carefully scrutinize over and over again. Take for example current statistics that came out of NYC where rents have dropped to the 2006 levels due to the COVID-19 pandemic and people leaving the city. Would you want to develop there right now? Absolutely not! But would you want to develop there in a few years where the pandemic is over and people start to come back and create demand again…. absolutely!

When you choose your location, you need to get all the best possible data that is available at the time and make a very well-educated guess of what will the market look like when you’re actually ready to take tenants in. Who will be your tenant and what will make them get interested enough to call your development their home? In other words, you need to know who your audience is and then be able to provide them with a product they need. 

Nobody wants to build a Taj Mahal but then have no one to live in it.