How multifamily developers are keeping the construction pipeline flowing

Apartment developers are getting creative in order to keep the construction pipeline flowing amid construction and capital challenges.

Four of the developers leading those efforts described their approach to continue building new housing in a session at the 2023 NMHC Apartment Strategies Conference in Las Vegas Tuesday. Each of the panelists has seen delays in their construction projects as the macroeconomic environment has shifted.

Jair Lynch Real Estate Partners had planned to have three market-rate projects start construction in 2023, but those projects are now delayed, said Ruth Hoang, the Washington, D.C.–based company’s senior vice president, development. “We’re still hoping one of them moves forward, but that’s 1,500 units and hopefully 600 move forward this year.”

Hoang said the developer is pivoting to ramp up its attainable housing strategy, investing $1.6 billion in acquisitions in that portfolio such as The Barcroft, a 1,300-unit affordable community in Arlington, Virginia. The strategy of pivoting to mixed-income or affordable housing development was echoed by the other panelists.

“We are going to focus on workforce housing,” said Kimberly Grimm, chief development officer for Menomonee Falls, Wisconsin–based Continental Properties. Grimm said that focus allows the company to go into more secondary or tertiary markets where the municipalities are “a little more reasonable” when it comes to scope, permitting and reducing fees.

“We are trying to build a pipeline to have a significant number of groundbreakings in 2024,” she said.

Teaming up with municipalities and other partners is one creative way to move projects forward. On The Barcroft project, Jair Lynch partnered with Arlington County and the Amazon Housing Equity Fund to secure $310 million in low-interest financing to win a competitive acquisition process and preserve the community’s affordable housing.

Is pricing relief here?

The potential upside of the shifting economic environment and declining starts is an easing of labor supply constraints, and the panelists predicted the trend will have an impact on construction costs as the year goes on.

“The most common question I get is when is construction pricing going to come under control to save my deal?” said Dan Hull, president of construction for Cleveland-based NRP Group. Looking back at the period from late 2020 to mid-2022, the industry saw permits skyrocket 50% while completions only slightly ticked up as demand outstripped the industry’s ability to build and complete projects. The COVID-19 supply chain shortages amplified the problem.



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