Why Construction of Garden-Style Apartment Communities Is Decreasing
Digested from The Rise of the High-Rise (and Mid-Rise) in Apartment Market
Axiometrics (1/12/16) Ehmann, Chuck
The number of high-rise developments has increased dramatically in recent years, while garden-style apartment communities have dropped from nearly 50 percent of apartment construction to less than one-third.
One reason high-rise apartment communities are becoming more popular is because developers want to maximize density amid rising land, construction and labor costs. Mid-rise apartment communities those with four to eight stories are popular for the same reason, as well as the fact that they can be built on or around parking garages, and dont cost as much to construct.
Garden-style apartment communities, on the other hand, generally have less than 20 apartment homes per building and have experienced lower net operating income growth in the past 15 years than their high-rise counterparts. As market demand remains high, expect more mid- and high-rise apartment communities to continue to come to market.