More people want to rent. To woo them, developers are dangling lots of perks.
Photos by Terrence Humphrey
A golf simulator. A gift-wrap room. A private movie theater. All but one of these amenities exist in Louisville apartment developments either recently built or nearly complete. (Any guesses? The answer, later.) If you’re like me — homeowner, small kids, out of the rental game for several years — such perks can seem surprising, a touch excessive.
My first apartment in Louisville was a humble space in St. Matthews, the walls, carpet and blinds all a varying shade of mashed potato. It had a pool. That was fantastic. And it had a friendly, elderly man forever in sweatpants who, despite never introducing myself, greeted me by my first name when I’d come home from work. I eventually found out he was a registered sex offender. That was unsettling.
I’ve always related to an apartment as a need, a one-and-only option thanks to a meager salary and a career that has forced hopscotching across the country. If the place had a gym and a pool? Fancy! If they allowed dogs larger than a bucket? Miraculous. So a few months ago, while watching the news, I paused when a property manager at a new development (sorry, “community”) touted its pet spa, saltwater pool and — first clue! — golf simulator. Why so elaborate? I wondered.
For starters, look around. The city is in the midst of a furious apartment boom. In a report for the first quarter of 2017, Commercial Kentucky, a real estate services firm, tallied 40 apartment projects (of at least 50 units) in some stage of planning, building or opening across Jefferson County. When they’re ready, units lease quickly. Last year Louisville averaged a 95 percent occupancy rate for rentals. Craig Collins, senior real estate advisor with Commercial Kentucky, says it may seem that thousands of new, high-quality units flooding Louisville in a handful of years will outpace demand, ending in vacancies. But that’s not reality. “Louisville is a little behind the curve with true market-rate urban housing compared to competitive cities —Nashville, Indianapolis, Cincinnati. So Louisville is catching up. And this is going to be the year we catch up,” he says.
Across the country, more people want to rent. In 2015, census data showed that more than half of the nation’s 100 largest cities were majority renter. (Louisville isn’t there yet. The most recent census shows the city still holding at a 61 percent owner-occupied rate.) “You were building up pent-up demand for people who wanted to rent in 2012, 2013 and 2014,” says Colin Underhill of developments company Underhill Associates. “Then developers started delivering more product to the market. They realized the apartment renter was going to be very picky. In order to differentiate your product, you differentiate according to the amenities you offer.”
Four walls, granite countertops and hardwood floors don’t cut it anymore. Developers of high-end units springing up throughout town aim to create a “lifestyle,” crossbreeding the sparkle of an all-inclusive resort with the necessity of shelter. Take Underhill’s Germantown Mill Lofts. Amenities: pool, bocce ball, Ping-Pong tables, grilling patio, on-site restaurant and bar, valet trash pickup and a fitness center with classes. (Although, the fitness center isn’t free.) These highly amenitized units don’t come cheap. Rents for a one-bedroom at the Mill Lofts (and similar developments) can start at around $900 or $1,000 per month, and a two-bedroom, two-bath apartment can rent for close to $1,600 or more. (At the end of 2016 average rent for a one-bedroom in Louisville was $740 and $866 for a two-bedroom.)
So which of the first three amenities listed is made up? I lied. All are real. Even the gift-wrap room. That’s planned for the seven-story Clay and Main development in Butchertown opening in late summer. (It is exactly as it sounds — a room with a bounty of wrapping paper, scissors and tape.) Do you desire a covered beer garden with heat lamps, a bike repair shop, a pet spa, a dog park, an outdoor kitchen (with granite counters, fridges and grills), a fire pit, co-working spaces, a complimentary latte bar, a fitness center and a “luxury” pool? Fear not! Clay and Main will have those too.
“We call it the amenities arms race,” Kelli Lawrence says with a chuckle. “Like, what else can you possibly do?” She’s a partner with Cityscape Residential, the Indianapolis-based developer behind the nearly complete 300-unit crimson-and-gray complex in Irish Hill called Axis on Lexington, as well as a slightly smaller project near the Paddock Shops. We’re in Axis’s clubroom, an extension of the leasing office that’s as vivid as a kaleidoscope. Neon-green columns stand near blue velvet coaches. Yellow, red and orange frames hold flat-screen televisions. A Starbucks machine tempts a few feet from where I sit. (“In the morning you’ll see people coming in their jammies to get their coffee,” Lawrence says.) Two vintage arcade games jingle next to a shuffleboard table. Overhead, pop music plays. Bowls of candy sit full. Everything gleams. It has the kick of a boutique hotel. It’s a young adult’s dream.
Sure, apartment complexes have been offering pools and tennis courts since the ’70s, particularly those in the suburbs. But Lawrence and other developers say the battle for the best amenities heated up about five years ago as the demand for urban living grew. Many factors have driven this trend. Of course, there’s the continued recovery from the 2008 housing crisis, the hesitation that those memories might cause among first-time homebuyers. Adding to that, the housing stock is slim, with an unusually limited number of houses on the market inside the Watterson Expressway. There’s also a significant population shift underway, people on either end of the age spectrum — the “barbell groups,” as it was described to me — that desire a mortgage-free life.
A 2015 Urban Institute report predicted more baby boomers would want to downsize into rentals. Charles Carlisle, CEO of Bristol Development Group in Nashville, Tennessee, believes as much as 30 to 35 percent of the tenants who will move into his forthcoming Clay and Main project may end up being older folks seeking change. “They could afford a home if they wanted to but they’re looking for a different kind of lifestyle, an urban environment,” he says. “They can walk to dinner and music or down to the waterfront.”
On the opposite side of the barbell — Millennials, a group that’s waiting longer to get married and have children, two life events that tend to inspire taking on a mortgage. Furthermore, says University of Louisville economics professor José Fernández, Millennials struggle to save money, a must for a down payment on a home. “More and more have gone to college,” he explains. “They are holding on to more student debt than previous generations were.” Also, Fernández says, many studies have shown that if you exit college during a recession, your financial outcomes suffer. It can be harder to find work. Or someone might accept a so-called “gap job” in retail or service just to get by. “That gap job is now on your resume,” he says. “It sends a bad signal.”
For some in their 20s or early 30s, renting may just make financial sense. But remember, we’re talking high-end, four-figure rents here. And with so many lush apartments in the pipeline, rents are expected to rise in Louisville after a slight dip last year. In that respect, Underhill says, it’s all about a generation of folks who want little commitment, plenty of perks and strong Instagram options. (He didn’t say the last thing, but that’s my analysis.) “You could pay $1,500 per month in rent or you could pay a mortgage for $1,200. But then you’d have to take care of your yard. You wouldn’t have a pool. You wouldn’t have security or pet-grooming stations,” he says. “You wouldn’t have all that stuff.”
I visit a small, 60-unit complex just south of Broadway. Now called Urban Flats, it was once the Worthington, an aging two-story building with a main office still tangling with the ghost of cigarettes past, a faint musty smell lingering despite new paint, a pool table, hip furniture and complimentary muffins.
Emily Bixler with Village Green, the property manager, says the developers saw a lot of potential with this location that is just blocks from downtown bars, the Yum! Center and offices. “We get the ‘yo pro’” — that’s young professional — “crowd who likes to live, work, play,” she says. (While in the office I did eavesdrop on one such “yo pro” moving here from Dayton, Ohio. His job was way out near Newburg, but he’d done enough investigating to know there’d be more action closer to the city.)
Bixler shows me a few of the renovated units. Gone is the mashed potato interior similar to my old apartment. Now stainless steel appliances glitter in the kitchen, slick lighting and wood-vinyl flooring successfully facelift the apartments. One thing I do hear a lot from developers is the word “intentional” — the idea that there’s been great thought put into their project’s amenities package.
In the case of Urban Flats, that’s meant more modest offerings. They won’t build a pool because the property is too small. “The cost-benefit wouldn’t be there,” Bixler explains, adding that another one of Village Green’s properties, the Enclave in east Louisville, has a more traditional spread — the pool, the green space, the grilling areas. Urban Flats does have a small gym, which will soon have a wall of flat-screen televisions. Bixler leads me to an outdoor deck that will eventually have chaise lounges and grills and Wi-Fi. “Everyone wants to have that rooftop feel,” Bixler says. She says an interior courtyard will be spruced up with fresh landscaping and murals featuring a local flavor. “Like bourbon and Jennifer Lawrence,” she says. “Sort of the same pics you see all over Louisville.”
What’s interesting about Urban Flats — compared with an Axis or Clay and Main — is that it’s not a project that’s built from the ground up. The Worthington’s residents still live in most of the units. Once their apartment is renovated sometime over the next year, they can stay and pay about $100 to $200 more in rent per month or leave. It makes sense. A nicer place with perks and style costs more. But I imagine many Worthington veterans will make way for the yo pros.
More than any other story I’ve worked on in recent memory, nearly every developer or property manager I interviewed had the same final inquiries before I parted: Who else have you talked to? Where else have you gone to look? I’m not totally sure why. But it smelled of rivalry. Kelli Lawrence with Cityscape describes a friendly competition, one that keeps developers constantly touring projects that are not their own just to survey the offerings. I ask Lawrence if she’s ever seen an over-the-top amenity. “I hear of some services that seem odd. Like there’s one that offers free dog-walking,” she says. “But I know some people have had to pull back on that stuff because they couldn’t keep up with the staff it took to walk all the dogs.”
Apartment developers used to have a “cookie cutter” approach to amenities, Lawrence says. No longer. At Cityscape, Lawrence estimates the amenities budget for a project has grown by about 50 percent in the last five years. And Cityscape is among many developers that rely on interior architects and interior designers to create a unique look to these communal spaces. “(Amenities) used to be, honestly, more of an afterthought,” Lawrence says. “Now the interior designers and interior architects are involved from day one.”
I loop through Axis’s pet spa (complete with a large container of Milk-Bone dog treats), outdoor grilling areas and fitness center with a boxing machine that has an on-screen instructor ready to bark commands. “I think this is new for Louisville,” Lawrence tells me as she jabs at red pads to try and wake the virtual instructor. The saltwater pool isn’t open yet. I want to see the indoor golf simulator but it’s under construction.
Twenty-four-year-old Alicia Berroug moved to Axis a few months ago from Milwaukee for a regional position with Altria, one of the world’s largest producers and marketers of tobacco products. She looked at a few other rentals, seeking a one-bedroom for about $1,000 monthly. Axis’s units with stainless-steel appliances, a generous walk-in closet and a washer and dryer won her over. As did the complex’s playful side, like the pool and arcade games that her boyfriend likes to play when he visits her. Other apartments may have been equally pretty and around the same price, but, she says, “One had a gym and no pool,” adding that she moved to Louisville knowing no one and a pool and clubroom might help with that. “I thought it would be easier to meet people here than the other apartments,” Berroug says.
After a tour of Germantown Mill Lofts I meet Sean Gardner, a transplant from Grand Rapids, Michigan. The 32-year-old in medical device sales sees the surrounding neighborhood as a perk, with its multiple nearby bars. “And I like having that here,” he says, pointing at Finn’s Southern Kitchen, the onsite restaurant. Gardner also appreciates the rustic charm of the building that decades ago operated as a cotton mill. (Underhill adorned hallways with salvaged mill equipment and historic photos.) “I lived in a place like this in Grand Rapids,” Gardner says. “I think it’s cool, the exposed brick and high ceilings.” But when Gardner’s lease is up, he expects to move on, settle down. “I’m going to be here for a year,” he says. “Then I’ll get a house.”
For “research” I eat at Finn’s as well as the Goat, a bar and restaurant located at the LC Idlewild apartment complex beyond the Gene Snyder in far east Louisville. (At both locations, birthday parties are underway with identical giant gold balloons marking a 21st and 29th birthday. Perhaps that gift-wrap room makes more sense now?) The food at Finn’s impresses. The Goat’s “cold brews and handcrafted eats” prove tasty as well.
Imagine a standard suburban pub with dark wood floor, lots of windows and a bar at the bullseye of the floor plan. That’s the Goat. It boasts 60 bourbons (including an annual Pappy ration) and overlooks LC Idlewild’s pool, so residents can get sunbaked and tipsy. Florida without the beach or airfare. Or as Rachel Fulkerson, the Goat’s general manager, puts it: “It’s like Captain’s Quarters only better, cleaner.” A claim I can substantiate by the males in pastels and boat shoes at the bar on the evening I visit.
As I dine I’m in a state of wonder with LC Idlewild, a place not urban or suburban but a village founded on intense market research. LC stands for Lifestyle Communities and the 646-unit complex in Louisville is one of 14 Lifestyle Communities in Ohio, Kentucky and Tennessee. What intrigues me is how LC Idlewild and its LC brethren have charged headfirst into resort living. On a tour, I’m shown the Om Fitness Club that offers classes, personal training and 100-pound dumbbells for “the big guys,” Om’s fitness manager says. LC Idlewild has sand volleyball leagues, poolside yoga and wine, occasional music by the pool, organized trips to Churchill Downs.
It seems LC Idlewild targets a young crowd. Website tagline: “Too Cool, Luhvul.” The Goat’s wait staff look like Abercrombie models. But Fulkerson tells me LC attracts far and wide. “Cusps, I call them,” she says, “Newly married, newly divorced, newly out of school. But age-wise, there isn’t a number — 25 to 85.” (Mental note: I need to meet the 85-year-old who calls LC Idlewild home.)
LC’s public relations team wouldn’t share the average length of stay for their tenants. Nor would other developers. But it doesn’t really matter. Louisville, a city perpetually chasing its peers, is finally fashioning itself with some luxury apartments. A certain class of renters digs it. Colin Underhill was the only developer I interviewed who hinted that he worries the market might become oversaturated. “We have an (almost) 60,000-apartment-unit market,” he says. “You’re talking about 10 percent of the total units coming online within a 24-month span. I definitely think that’s a concern.”
Curious as to what amenities might be on the horizon, I look to New York City. A collection of favorites Google provided: driving range, sauna, wine room, sky garage (probably needed for parking more so in sardined Manhattan than here), squash courts, rock-climbing wall, lap pool. Many apartments listed things popping up here, like pet-grooming stations and rooftop lounges. The Upper East Side may have been the first with supreme amenities. But watch out. Louisville’s in the thick of an arms race.
This originally appeared in the May 2017 issue of Louisville Magazine. To subscribe to Louisville Magazine, click here. To find your very own copy of Louisville Magazine, click here.
