Why millennials (and investors) love micro-units, and the digital threat to the hotel industry
May 1, 2015
Here are the news stories you might have missed this week:
The New York Times: Technology overtakes tobacco in Winston-Salem, N.C.
Winston-Salem has gone cold turkey, and is now investing in a healthier lifestyle. Millions of dollars have been poured into the Wake Forest Innovation Quarter, a 145-acre development on the site of a former cigarette manufacturing plant, which brings together research institutions and hospitals, as well as private technology businesses and residential units. The new research and innovation hub is seeing new demand for retail, residential, office, and even hotel space, and this trend looks as though it will continue throughout the year. Read more about Winston-Salem’s transformation at NYTimes.com.
National Real Estate Investor: The rise of micro-unit apartments
Millennials in big cities are opting for mini apartments that are only about the size of a hotel room. These micro-units, which can be as little as 220 square feet, are an attractive housing option to young professionals that seek affordable digs in notoriously expensive cities. Micro-units can also be a great bet for investors — smaller units typically have higher occupancy rates than mid-size and large units, and rental prices per square foot are 81 percent higher than larger units. To learn more about this micro trend, visit NREIonline.com.
Memphis Business Journal: Multifamily development driven by occupancy, rental rates
Two numbers show the power of Memphis’ multifamily market: $44 million in 30 days. That’s what the Financial Federal Bank has loaned out for construction, acquisition, and financing for a few multifamily developments in Memphis. This sector is growing throughout the country, and in Memphis, occupancy rates and rents are trending upward. As incomes improve, renters are willing to pay more, while economic incentives and low interest rates are encouraging developers to build new units. Learn more about the Memphis multifamily sector at BizJournals.com.
Fortune: How Airbnb could spawn an M&A frenzy in the hotel industry
Real estate investor Thomas Barrack sees trouble brewing in the hotel sector, as disruptive technologies like Airbnb are shaking up the industry. He predicts a future filled with hotel mergers and acquisitions, and maybe even the union between a hotel chain and an online resource. But, executives of big chains see Airbnb as a nonfactor, as they put up big numbers in 2014. Still, disruptive technologies might upend real estate stalwarts, like hotels, as alternative lodging options enter the market. See what else Barrack said at Fortune.com.
Author: Raymond T. Cirz