Andrew Geier
Executive Vice President
Layton (Phoenix, AZ)
Brooks Rutledge
Vice President
Layton (Nashville, TN)
Jason Vesuvio
Vice President
Pavarini McGovern (New York, NY)
Multifamily luxury housing has been booming in cities across the US. But what exactly does “luxury” mean? It depends on the market, says experts from STO Building Group’s multifamily builders. Here are perspectives from three different US markets.
What defines “luxury” in multifamily housing?
AG: What someone labels as “luxury” is subjective. Most owners call their building “luxury,” but luxury is defined by the market—whether it’s amenities, the fit and trim, or location. In Arizona, most multifamily buildings are wood-framed and four to six stories, so tall concrete buildings stand out as more luxurious. Shorter buildings can be luxurious as well. For example, our project, The Ascent, is a private residential community within the Phoenician resort. It features contemporary desert architecture integrating natural materials and colors. We installed European cabinetry in the kitchens and very high-end finishes throughout.
JV: There is a spectrum within the spectrum when it comes to defining luxury. In New York, a new level of luxury has been defined by “Billionaire’s Row” along 57th Street due to the 1,000-foot-plus super tall towers. There, luxury typically means a concrete building with a high-end enclosure, a great location, a high floor with an unimpeded view, ample square footage, lavish interiors, and a Michelin-starred restaurant with a great chef.
BR: Our clients are looking to balance luxury with cost efficiency, so often they will spend more on amenities like an expansive lobby, a pool, fitness center, music room, restaurant, retail, or coworking spaces. In doing so, they are conveying a luxury space through public spaces and amenities, while remaining more cost conscious in the units themselves. In Nashville, it’s vital that tenants are provided access to parking, often underground, due to the lack of infrastructure to support its exponential growth.
What is driving the demand for luxury housing in your market?
AG: Arizona is a vacation and snowbird destination. The demand for luxury living is coming from people who are looking for a lock-and-leave condo as a second or third home. They want all the comforts of home in a beautiful location without having to take care of a yard. For younger people, we
find that they want nice aesthetics in cool surroundings. Our project at Sol Modern in downtown Phoenix has everything singles and young families could want in a community—outdoor lounge and kitchen, an eighth-floor basketball court, citrus groves, and the tallest multifamily pool in the city.
JV: Since the pandemic, one of the drivers of luxury in New York is flexibility in your living space. Some developers offer building designs with more outdoor spaces, more living areas for potential home office space, and the option to easily “punch through” another unit to expand your home. Balconies and courtyards—green spaces in general—are another component of luxury living in the city.
BR: In Nashville, there remains a focus on music, tourism, and entertainment. Often we find that apartments and condominiums located in SoBro, Midtown, or the Gulch act as second and third residences or an alternate means of income (VRBO or Airbnb). As such, unit renters, owners and/or guests are not likely to spend a great deal of time at “home”—they are here for the party, so the unit itself need not be luxurious, but functional. It’s vital, however, the building be centrally located and convey an upscale appeal.
What are some trends for luxury apartments and buildings?
AG: Technology is becoming more prevalent—for access, for security, and within the home. With the younger demographic now in the rental and buying market, a high level of technology integration is a requirement.
JV: The New York residential market pushes the envelope on buildings’ structural limits and very complex, detailed exterior wall design that brings the outside into the living space. A high level of integrated security and smart home technology also comes to mind. Sustainability is reaching new heights here as New York heads towards its Local Law 154 mandate for all electric buildings in new developments.
BR: We, too, are seeing the need for security and automation. Many of our clients are intent on providing three to five levels of below-grade parking.
Right now, luxury is driving multifamily construction spending. Do you expect this to continue?
AG: Yes, in Arizona, its competitive. Each developer wants to do it better than the last; it’s like an arms race.
JV: In New York, there is a continued pause in this subsector of the residential market due to the lending environment. Regardless, everyone here is keenly aware of what the competition has done and will likely do in the future to make their luxury product better than the last development.
BR: In Nashville, there is a need for multifamily housing, luxury or otherwise. Location and speed-to-market are paramount.