Multifamily For-Rent Development: affordability is always in style.
When studied at the micro level, the multifamily rent market seems to be in constant flux. It’s up. It’s down. It’s flat. It’s back up again. Inventory is high. Inventory is low.
But when you zoom out, you’ll see one constant: over time, rents go up. A lot.
Since the 1960’s, inflation-adjusted, year-over-year rent growth has outpaced real household incomes by more than three to one.
According to the most recent U.S. Census Bureau, “46% of American renters are now spending 30% or more of their income on housing.” Twenty-three percent “are spending at least 50% of their income this way.” This meets the Department of Housing and Urban Development’s definition of being “cost burdened.”
On top of everything, a lack of homes for sale and climbing mortgage rates are forcing many potential home buyers to choose apartment living.
What does it all mean for potential real estate investors? It means demand has never been higher for more affordable housing. If you want to capture one of history’s largest markets, offer renters better value.
With more than 30 years of experience in building multifamily housing faster, better and for less, Pacific West is built to satisfy that demand with the industry’s highest value offerings.
How we bring affordability to multifamily housing.
With our ultra efficient design-build process, we can significantly lower construction costs. Those savings can then be passed on in the form of lower rents.
That holds true whether we’re constructing market-rate or affordable (income-assisted) for-rent projects.
We’ve taken design-build’s inherent benefits to another level. And that’s saying something. The Construction Industry Institute says that design-build projects come in at least 4% to 5% less than construction management (CM) projects. And they cost 6% less than design-bid-build (DBB) projects.
We push that advantage even further.
Modular manufacturing and construction.
Our modular design-build process allows us to control every step of the construction process. That control enables us to increase livable space, improve workmanship, cut square foot construction costs, reduce build times, and increase project density.
More importantly, we can do all that and provide more affordable rents.
Building “in the dirt” is archaic. It’s costly, wildly inefficient, and relies on unpredictable labor. We now manage and operate our own off-site manufacturing facility where most sections of our apartment buildings are manufactured and assembled. Today, we’re 60% modular with a goal of reaching 100% in the next few years.
We also eliminate the volatility of the materials markets by pre-buying commodities in bulk at the best prices from trusted suppliers well before construction begins.
Our management groups and long-time superintendents have worked project after project with the same teams. They understand our process.
When combined with our innovative products, our advanced building process allows us to give our business partners and renters enhanced quality, lower costs, and building times up to 33% faster than with the competition.
Industry-leading advancements in the field.
Just as with our commitment to off-site manufacturing, we’ve implemented an on-site system that relies on using proven, familiar techniques and materials.
We use the same subcontractors, the same architects and engineers, and the same materials. We use on the same material suppliers. And everyone specializes in multifamily building. We use the same design assemblies job after job. This familiarity with the process is the most proven method to eliminating mistakes. Practice makes perfect.
To keep everything tied together and running seamlessly, everyone associated with the project has use of an exclusive information technology system. The easy-to-use online program, a $4.5 million investment, provides project management, scheduling, and a secure, real-time exchange of information among all project participants. It helps us push efficiency even higher. And it’s all tied in with industry leading software such as:
- Primavera™ Time Management Software
- Sage Precision Estimating by Oracle
- Sage Accounting by Oracle
- AutoCAD
- Autodesk Rivet
- Autodesk BIM
- MiTek Virtual Plant Software
To further standardized construction, and overcome a nationwide labor shortage, we self-perform basic trades. Doing so helps us “control the structure.” It reduces costs, enhances workmanship, and simplifies scheduling.
Currently, we self-perform:
- Site Grading
- Concrete
- Framing
- Finish Carpentry
- Stucco
- Painting
We are product driven.
Typically, real estate developers have built multifamily projects instead of multifamily products. That’s a risky way of doing business.
Building a project is a one-off approach. It means developing a new product for each project. While that might seem to make sense, it means building an unproven design. It often requires unproven construction methods. It’s costly and time consuming. It relies more on money than skill to overcome problems.
We don’t believe in reinventing the wheel.
The architects and engineers at the 1085 Group provide us with exclusive products that incorporate proven construction methods that are repeatable and scalable.
The look and aesthetic of an apartment building might change. The floor plan layouts might be modified. But they use the same substructures, the same assembly and building processes. Workers bring a familiarity to each project that speeds construction and eliminates unanticipated problems.
Along with simplifying and speeding up construction, it also allows us to guarantee costs before construction.
Designs and floor plans that match renters’ needs.
With more than three decades of experience, and an unending thirst for improvement, the design professionals at the 1085 Group use a wealth of knowledge to eliminate wasted space, increase density and increase livable space.
They study interior traffic flow and use patterns. They keep up-to-date on emerging lifestyle trends (like work from home). They discover where space goes unused and “shift” it to more popular areas.
It’s an innovative, flexible approach. It enables us to reduce a building’s footprint, which significantly reduces costs, while increasing actual livable space, which provides renters with more value.
The markets we serve are starved for more affordable apartments.
We focus on providing multifamily housing to Northern California and Northern Nevada, primarily along the I-80 and I-5 corridors. The demand for more affordable housing is at all all-time high in those markets.
According to a recent study, in the last three years Reno’s rents have increased at the highest rate among all U.S. mid-size cities. In the same time span, the Reno-Sparks metro area saw its median rent jump by just over 36% to $1,624 per month. (*Reno Gazette-Journal, July 2022*)
Post pandemic, the rents in Sacramento County, California have climbed 16.7%. In Solano County on the east side of the San Francisco Bay Area, rents have increased 14.4% since 2019. The average rent in Solano County is now above $2,000 a month. The average rent in bordering Alameda County is more than $2,200. Renters in San Joaquin County, California, have seen rents rise 14.6% in the last three years. (*The Washington Post, July 2022*)
Construction speed benefits everyone.
Along with cost savings, we’re able to bring multifamily properties to market several months earlier than most other builders. That means renters, who are often searching for more affordable options, will find those options more quickly.
By getting to market faster, apartment complexes can reach maximum occupancy quicker. This gives real estate investors an impressive advantage. They start seeing returns months sooner. And it cuts a significant amount of interest off construction loans, which makes both investors and lenders happy..
Our Multifamily For-Rent Services
Pacific West is available as a design-build general contractor and as a comprehensive residential development partner. (We also offer multifamily home construction and development, as well as full services for single-family rental homes, and single-family luxury homes for sale. Please see our Homepage for more information.)
Our Multifamily For Rent Project Types:
- Market Rate
- Affordable Housing (income assisted)
- Mixed Use (market rate mixed with affordable housing)
Our Multifamily Building Styles:
- Garden Style
- Townhome
- Podium
- Wraps
Pacific West is available as a full-service development company, construction company and a general contractor for:
"WE PROVIDE CLIENTS WITH MORE OPPORTUNITIES, MORE POSSIBILITIES."
- Architect Lewis Zaumeyer talks about the philosophy of The 1085 Group.
