As residents’ needs and lifestyles vary, the strategies for how to approach an upgrade of the amenities will differ considerably.
Just like that, another year is gone!
No doubt, when looking ahead to the New Year, fitness and health is on the minds of many. So, what better time than now for property owners and developers planning for 2019 to evaluate their fitness amenities?
For new building projects starting with a blank canvas, it’s easy to rush to buy the newest, shiniest equipment on the market. But for older assets or condominiums with limited space, it can be challenging to think of how to upgrade fitness amenities to keep pace with newer buildings.
In our industry’s rush to provide more value and the latest amenities, older properties often find themselves further behind new luxury buildings down the block.
To adapt to the needs of modern residents and to create more amenity space, many older properties are buying back apartment units to use the space for a gym or to extend and redesign existing spaces.
These are both worthy and calculated decisions for co-op shareholders and developers with more mature rental properties. As residents’ needs and lifestyles vary, the strategies for how to approach an upgrade of the amenities will differ considerably.
What creates value for owners vs. renters?
In our experience consulting for and operating amenity spaces, we’ve found that the key factor affecting amenity redesign strategy for older assets is whether the residents are owners or renters.
Owners are thinking more long term and have more limited funds. Aside from the possible 15 percent increase in the property’s value, any new amenities are really for owner-community enjoyment. Owners may want the convenience and pleasure of working out in the same building instead of having to go somewhere else. As we always say at URBN Playground, time is the real luxury.
On the rental side, the motivation is different for property owners. The goal is not personal enjoyment, but keeping the asset relevant in the marketplace so it stays attractive to existing and future tenants and continues to generate rental income in hyper competitive markets.
We wanted to share some of the factors that should influence the decisions you make for any build-out and redesign of amenity spaces in older properties.
Rental: Affected by location, price and competition
- Location, location, location. Is your market near an up and coming transit hub? What other amenities are nearby? What could you offer renters that would be a differentiating factor?
- Future geographical factors. Is there a potential rezoning happening that could upset your rental apple cart?
- Market competition. Are you in a hyper competitive urban core and are having a hard time attracting tenants and keeping tenants?
Condo or Co-Op: Affected by design and resident experience
- Utilization. Have you tracked use of the existing fitness center or conducted surveys to track usability? Some important questions for residents might be “Do you currently belong to a gym and what is the name/price point of that gym?”
- Critical mass. Gyms are very capital intensive. Not working with a gym consultant is almost a sure-fire way to miss out on savings. Keep in mind, a gym consultant is different from a gym equipment supplier who often claims to do the consulting. You need a program, and a clear plan for how the gym will be used, not a layout. This is critical to make the investment worthwhile.
- Property management. Does your property management firm have the capabilities to manage the repair requests, but even more importantly the cleanliness of the gym? A messy and dirty gym will guarantee that no one uses it regularly.
A few final tips for anyone considering an amenity redesign
- Hire an architect to work in conjunction with your architect. For example, it is important to get the HVAC correct for safety reasons.
- Know the stages of redesign, which are schematic design, design development, construction documents, and construction.
- How far to go with the redesign should be tied to your market and the class of the asset you are managing, developing, and owning. In a hyper-competitive urban core, architecture selection may be more important or as important as a condominium with refined finishes and thoughtful touches to create the experience which would drive your market rents.
Having enough time to plan this redesign thoughtfully is important, but the processes of making these decisions with stakeholders is even more important to a successful redesign. Surround yourself with knowledgeable people who are creative and thoughtful and you’ll be on the road to repositioning your asset and creating a frequently used amenity.