THOUGHTFUL URBAN DESIGN PRACTICES: PART 5

CAREFULLY EVALUATE THE VALUE OF BUILDING AMENITIES

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A recent study by Newmark Knight Frank found that apartment buildings in the Washington DC metro area with a high number of social amenities – like fitness centers, fire pits, and swimming pools – typically sold for less than buildings with fewer social amenities. Conversely, buildings with more service amenities – like concierges, package handling, and pet services – sold for more. The researchers concluded that potential buyers are likely concerned about the maintenance costs that come with social amenities, and those amenities can therefore yield diminishing returns for developers.

This was a shocking conclusion for the researchers who had believed in the general notion that more amenities translated to higher rental rates and sales prices. But the study revealed a key economic difference between social and service amenities in terms of building sales, meaning not all amenities are equal. (It should be noted that only the building’s sale price was negatively affected; rental prices for buildings with more social amenities were still 4% higher than average.)

More amenities do not necessarily equal higher project value. But the careful curation of the type of amenities combined with good design does.

For example, ROSSETTI’s work in renovating The Albert in Detroit’s Capitol Park neighborhood focused on transforming the apartment building’s common areas. The renovated lobby was designed to serve as the building’s living room. It provides both social and service amenities and the design swapped out opaque walls for glass to make it more visible to residents within the building as well as passersby on the street.

As community builders, it is important to evaluate the costs and benefits of different social and service amenities for each unique project, to understand the value of different amenities to the target market, and discuss these ideas with developers. By helping developers with this evaluation in the planning and design phase, we can help create buildings that have lasting value within the real estate market and to the communities they serve.

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