When Bigger is Better in Multifamily
Some multifamily investor-developers like micro, but for Gate Residential Properties, which has 831 units underway, it's all about the macro, says principal Kyle Warwick.
There's a place in the market for micros, but with all the new multifamily product being delivered, many people will choose the freedom of more space (people need room for their morning yoga and jigsaw puzzles), and prefer traditional layouts and a fuller amenities package, says Kyle (above at a recent industry event). Gate Residential, an affiliate of four-year-old Redgate, has--or is--developing a total of 1,215 housing units. Now in development, it has 831 units, mostly on rapid transit lines in towns bordering Boston: Somerville, Chelsea, and Quincy. In Boston, it's permitting a nine-unit super luxury condo building in the Seaport District. Redgate is also looking for mixed-use and commercial projects.
"Value luxury" is how Kyle describes Gate's $50M One North of Boston project in Chelsea; 230 apartments under construction in Phase 1, due for completion next spring. A 1,000 SF two-bedroom, two-bath will rent for about $2,000/month. Amenities include: condo finishes, a fitness center, club suite, pool, and pet care and concierge. (A desk for dogs to find out if the city is showing any dog Shakespeare or to get recommendations on good canine restaurants.) The project, a JV with TransDel Corp, is one block from a commuter rail station (10 minutes to North Station) where the state plans to build a new Silver Line stop by summer '16. Next spring, construction is slated to start on a new FBI HQ across the street. With a new Marriott, restaurants, and a nascent artist community, the city of Chelsea is leaving its "bad boy" days behind to become a bedroom community for Boston.
In Boston, Gate is permitting for Zero Farnsworth--nine super luxury macro condos on Congress Street--with one large penthouse and otherwise, two units per floor; each with private elevator access. (Does that mean you can decorate the elevator however you like?) Prices aren't set yet. Now that the housing market is back, suburban empty nesters are ready for the move to the waterfront, Kyle says. Gate also hopes to break ground on a 352-unit luxury apartment building on the last waterfront site in the Marina Bay complex on Boston Harbor. A 1,000 SF two-bedroom apartment will probably rent for $2,800/month, slightly less than the apartments at Maxwell's Green in Somerville. Gate completed construction on the 184 apartment complex last February. It's 96% occupied.
In '10, Gates principal Damian Szary (standing beside a One North lobby rendering), with Kyle and four other former colleagues from Spaulding & Slye founded Redgate. Kyle comes from a real estate family. His father, Bruce, is vice chairman of Related in New York; his sister worked for Boston Properties and brother-in-law for Bovis. (You can bet cap rates come up at Thanksgiving dinner.) After graduating from Colgate, Kyle worked for Tishman Realty on the Getty Center in Brentwood, and in '94 joined S&S and settled in Boston. Family influence aside, he likes the dynamism of real estate and a different challenge every day.
