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Unit Mix Is a Determinant of Project Character and Success
Few larger properties offer only one type of apartment unit. Normally there are several different floor plans usually with varying numbers of bedrooms. The number of bedrooms is the first most important defining features. Next, number of bathrooms are a critical feature effecting property character. Finally, square footage is important as it relates to relative resident affluence and the more likely family based use.
Developers choose unit mix based on several factors. If they are considering a conversion to condominiums down the road floor plans and unit size is likely to be sized differently and appointments installed differently than rental units might otherwise be. On the flip side as we've seen in this economy, many builders have had to abandon their plans to sell units as condominiums and rent the units as apartments instead. Other factors could be local demographics or major local employment trends and demands. Regardless, in the end projects will draw residents because of floor plans. For example, if a property is all single level walkin and the builder intends to draw singles or young couples, they may wake to find one day that their property has become senior centric. Single level walkin can be very attractive to this demographic. Or, the same property with a different color scheme, located near a university, and with a host of the right amenities like a large pool, fitness center, cable and Internet included will quickly become a student centric housing option. Families are drawn to multiple bedrooms and multiple bathrooms and locations near schools.
Purchasers and investors that identify a project that is failing or weak because the customer mix is wrong should be on the look out for unit mix problems and solutions to correct the problems. Often times, one bedroom units can be restructured in into 1s, 2s, 3s, and efficiencies that will draw to a much different mix of renters than the previous floor plan attracted.
Working through the issues of current floor plans and potential floor plan changes requires in depth study of local employers, educational facilities, local demographics and demographic trends. Also, occupancy and renter type needs to be reviewed at nearby competitors. Time should be spent visiting other projects and learning from a ground level what the perceived drivers of occupancy and property performance are.
Clearly, the subject of unit mix can make or break and investment and should be carefully reviewed and considered.
