Leasing the Cool Life
How Gen Y renters are changing the apartment amenity landscape.
NOTHING’S SET IN STONE yet, but units in Belltown’s under-construction Alto Apartments may come with a free Internet radio subscription. In fact, the building’s developer, Harbor Properties, is hitting the music note hard throughout the project, from a proposed built-in, iPod-compatible stereo system on the rooftop deck to its marketing slogan: “Where your soundtrack comes to life.” Harbor claims that any audio add-ons are a nod to the fact that Alto sits at Third Avenue and Cedar Street, the former site of the Musicians’ Association of Seattle. But in reality, the sonic emphasis may have as much to do with luring the young renters of the future as it does with honoring the past.
According to local apartment-market tracking firm O’Connor Consulting Group, just 13 percent of new Seattle households—college grads, new residents, divorcees, etc.—went rental in 2003 and 2004. Today that number has leapt to 60 percent. “Everybody was a buyer at the beginning of the decade,” says Brian O’Connor, the firm’s president. “Even young kids were getting 100 percent financing on $300,000 condos.”
But what young Seattleites may have lost in ownership opportunities in the last few years, they’re gaining in swanky rental alternatives. “Everyone’s trying to figure out what’s cool,” O’Connor says. “What can you do in an apartment building that would be so cool that everyone would want to live there?” The answer Harbor Properties came up with for Alto started with music-related upgrades, but it went much further. “The Gen Y renter has proved to be much different than the renter that we had even 10 years ago,” says Martha Barkman, who’s overseeing the project. “They want the high-end finishes. But they’re willing—most of them, anyway—to accept a smaller space if it’s done well.”
That was the thinking at the Station at Othello Park, a new 351-unit complex in Beacon Hill, where developer Othello Partners went beyond standard amenities like a fitness room (although it does have one) to include a shared media and gaming room and a 7,500-square-foot rooftop deck that sports everything from barbecue pits and a wet bar to a built-in sound system and hot tub.
The question, though, is whether Gen Y renters can afford to live there. For now, Barkman estimates that rent for one of the 600-square-foot units in Alto could run $1,500 a month. And rents at the Station range from $800 to $2,000, although Othello Partners’ president Steve Rauf points out that he’s not necessarily targeting young renters. Renters may get squeezed further, though. Experts like O’Connor and Tom Cain at Apartment Insights say supply can’t keep up with demand. According to Cain, vacancy rates are only 4.5 percent downtown, yet few new buildings are scheduled to open soon. And that means one thing: Rents will only go up—possibly by 20 percent within five years, says O’Connor: “People are going to be begging for an apartment in two years.”