The Generation Y set is emerging from the shackles of the Great Recession and, in terms of residential accommodations in Raleigh, N.C., a development team is preparing to give them what they want. SkyHouse Raleigh, a 320-unit luxury high-rise, will soon sprout up downtown now that Novare Group, Batson-Cook Development Co. and Edison Land L.L.C., have issued a notice to proceed for the $60 million project.
Rents are rising and vacancies are declining, and household formation among the population of 20- and early 30-somethings in the area has more than a little bit to do with it.
“The Gen-Y household formation has been stalled due to the economic downturn that lasted longer for that set of graduates that are finally feeling some economic freedom from, say, student loans or underemployment,” Tony Bonitati, broker and director of the multi-family division at commercial real estate services firm NAI Earle Furman, told Commercial Property Executive. “And now there is a new excitement, a belief that the economy’s fully recovering and now they’re taking a chance and forming that household that was in the parents’ basement for so many years.”
SkyHouse will stand 23 stories at the corner of Martin and Blount streets and will be a key component of the mixed-use Edison Project development. Designed by the architectural firm Smallwood, Reynolds, Stewart, Stewart, the apartment building will also feature 5,400 square feet of street-level retail.
SkyHouse is one of many apartment communities that are in the works in Raleigh. According to the Downtown Raleigh Alliance, more than 1,600 new rental units are on track to reach completion in the central business district between 2013 and 2015. However, there appears there will be more than enough eager renters to go around.
“There’s been a lot of talk of [overdevelopment] and we think there is not a glut currently in the pipeline because there was an under-stock of developed assets between 2007 and 2012,” Bonitati said. “When you add to that the domestic migration from outside states, even though the number of units being produced now is higher than we’ve seen in many years, the demand will be there.”