With their exterior access and outdoor common areas, garden-style apartments hold greater appeal for virus-wary renters.

Long-term success in portfolio building is a function of agility. We’re seeing where the market is headed and anticipating where we’ll see the greatest demand and most manageable risk.

As the commercial real estate market shifts away from retail, it’s imperative to pivot toward asset classes that will endure and thrive in the post-COVID-19 marketplace. Moreover, it’s essential to look through the curve and lean toward where there are opportunities to create the most value.

While many investors wait on the sidelines, now is the time to be aggressive in buying vintage multifamily. There’s going to be a significant shift towards these garden-style communities as they offer more opportunities for social distancing with open space, lower density, and outdoor access, as well as greater air circulation compared to high-rises with closed hallways and elevators.

What is a ‘garden-style’ apartment asset and why are they undervalued?

A ‘garden-style’ community is one that features exterior access, landscaped grounds, and common outdoor areas for tenants. The structures are generally limited to four stories and feature single-story units with several to a floor. These multifamily properties typically don’t have elevators, and each unit has an entrance off a breezeway or the exterior of the building.

Some of the best investment opportunities are vintage multifamily assets. Many class-B and class-C communities that were built decades ago represent perfect value-add potential. These assets typically have some deferred maintenance, need interior and exterior updates, and lack modern amenities—those which will yield much higher demand, more stable occupancy, and improved NOI.