November 21, 2016

Boomers, Millennials Driving Growth in Luxury Rental Segment

In its Emerging Trends in Real Estate report for 2017, the Urban Land Institute points to a “de-emphasis on ownership reflected in a soaring demand for rental units,” with the Millennial and Boomer/Empty Nester cohorts leading the way. According to the study, “more than half of the 12.5 million net new households created in the next decade will rent, including those who have never owned and those making the switch from owning to renting as they age.”

What is driving the Millennials and Boomer/Empty Nesters into the high-end luxury apartment rental market?

 Where are they moving?

Much of multifamily housing is being built in the “smile states”—from Washington, D.C., to Texas to Southern California. Where you see population growth, you’ll see increased need for luxury rental.

For Millennials, as their career goes, so do they, and they are moving to cities where job growth is robust. A good case in point is Charlotte, N.C., and its surrounding counties, where about 47 percent of households are in rentals and 109 new people are added to the region’s population each day—that’s enough to fill half a 200- to 250-unit apartment complex each day. Charlotte’s Uptown/South End was recently ranked the country’s top market for apartment construction and yet the Greater Charlotte area still has a rental housing deficit.

Boomers are attracted to quaint, smaller towns big enough to offer the “quality of life” cultural amenities and recreational opportunities high on their checklist. Lexington, KY, for example, offers vibrant, big city living without the traffic; a stunning horse farm-laden rural countryside to explore; relatively low taxes; great health care; and a college (University of Kentucky) to attend free of charge.

Tracking housing trends, meeting growing space needs

Rooted in the Midwest, Miller-Valentine Group is a developer that has expanded into new markets to better serve Boomers’ and Millennials’ growing appetite for rental space. They have opened offices in Charlotte, Charleston and Columbia, South Carolina, and Dallas, Texas—metro areas into which these renter populations are migrating.

These are the four luxury communities they currently have under construction:

In each case, these communities have been designed with local wants and needs in mind, with careful planning to create rental units for both Baby Boomers/Empty Nesters and Millennials.

For each new person who moves to a city like Charleston, Charlotte or Dallas the home they need didn’t exist yesterday. This simple fact will continue to fuel demand for the luxury rental apartments they prefer.

For more information, contact Charles Rulick at 877.684.7687.