Development follows shift in household demographics

[MarkDaMan]

Development follows shift in household demographics
POSTED: Wednesday, June 13, 2012 at 02:36 PM PT
BY: Lee Fehrenbacher, Daily Journal of Commerce

Read the entire article here:
http://djcoregon.com/news/2012/06/13...-demographics/

According to data released recently, household demographics are changing in the Portland-metro area. Families are shrinking and more people are living alone. Meanwhile, young professionals are continuing to flock here.

The demand for large, suburban homes is dwindling. And one developer is altering his business model in response.

“You’re seeing an in-migration of those wanting to sell their houses,” said Clyde Holland, CEO and chairman of Holland Partners Group in Vancouver, Wash. “Forget having to mow and weed on the weekend: Let’s just go get a condo some place and let someone else worry about it.”

Two decades ago, Holland built suburban, garden-style apartments almost exclusively. Today, his company is focused solely on multifamily infill projects in the urban core.

Last year, Holland Partners broke ground on several such projects in Oregon, Washington, California and Colorado. The two largest are a 457-unit project in Huntington Beach, Calif., and the 324-unit Brenchley Estates in Wilsonville.

Mill Creek is building two separate apartment buildings (one with 179 units and one with 135) in the Pearl District, as well as a 367-unit apartment complex in Tualatin. The company expects to start a 134-unit project in Goose Hollow next year.

Rodriguez said he and other developers are targeting young professionals who earn between $60,000 and $75,000 a year. He said they represent roughly 15 percent of the population; Holland thinks that number is likely to grow.

“Portland has the highest in-migration of any city in the nation, (age) 26 to 40 with college degrees,” he said. “That’s really a great element.”

According to Heitman, a global real estate investment firm based in Chicago, the Portland-Vancouver-Beaverton area ranked as the 15th most educated metropolitan area in the nation, with nearly 35 percent of people age 25 or older holding bachelor’s degrees. In the same category for states, Oregon ranked 19th.

Creston is developing two Hollywood District apartment projects (one with 47 units and one with 41), as well as a 71-unit project at Southeast Morrison Street and 20th Avenue. Mullens said prospective tenants in this tight rental market want clean, affordable, close-in living quarters – and they’re willing to sacrifice space.

But Mullens isn’t banking solely on young professionals. He said Creston is including elevators in every new project in order to cater to an older group.

“We think that yes, there’s enough demand for this product with all different age groups, and we think an elevator is good insurance,” Mullens said.