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Thought Leadership
Multi-Family, Student Housing & Senior Living
Houston

The microunit solution and enhancing prefabrication’s role

As we move into 2023, financial alignment, early decisions, and innovation in how we build and support our clients will be critical to project and programmatic success. In Houston, our local team is well aware of the shifts in the market, and in this 3-part series, they provide insights on what they’re seeing and how we can adapt in the markets of energy, multifamily, and healthcare.

The Houston market is starting to see demand shift away from high-end, luxury products toward living environments that provide more affordable solutions for today’s average renter, or simpler, a microunit solution. There remains a healthy demand for multifamily units as the population steadily grows and interest rates for loans remain high. According to Colliers International, rent has increased quarterly in Houston and there are more than 15,000 units under construction with more than double proposed for the future. How these future units are conceived will be key for the quality of the development, the overall affordability for tenants, and for the developer’s financial investment.

To meet the expected 331,000 units needed annually in the United States through 2035 (ULI Emerging Trends Report), smaller overall unit sizes with a lower monthly rent are a crucial next step in the multifamily market. These types of smaller units will need to strike a balance of still offering connectivity to the urban experience without the high prices and could call for the opportunity of retrofitting the right kind of existing building. We may also see a shift to multifamily living with shared amenity spaces, like what we see in student housing, where well-designed and sociable environments offset smaller units with cutting edge amenities.

Given the current status of the financial markets, the ability to build fast and pre-procure labor, materials and contracts will be critical for multifamily projects that look to move forward over the next 15 months. Overall, the multi-family market can benefit from more robust prefabrication, such as bathroom and kitchen assemblies, and other unitized systems constructed off site and delivered to the project concurrent with other ongoing operations. Each of these strategies can work toward enhancing the quality of the finished product, reduce construction duration and potentially cost.

By combining the efforts of our construction business and our JE Dunn Capital Partners investment group, JE Dunn is in unique position to understand cost and constructability concerns as they relate to the business planning and risk mitigation that is required for each unique development.

Patrick Dennis
Senior Vice President
Project Executive

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