Micro apartments are about two-thirds the size of a regular apartment but also cost less money, which could make them a hot option for downtown urban areas.

WEST PALM BEACH, Fla. – Very small apartments could be the next hot housing option for downtown urban areas.

These so-called micro apartments are only about two-thirds the size of a regular apartment, but they also cost less money than standard apartments. With rents skyrocketing and new apartments scarce, suddenly everyone is interested in getting their hands on micro-apartments.

Among them are hotel operators.

In downtown West Palm Beach, a company affiliated with Korman Communities is buying the soon-to-be completed Current Apartments at 625 S. Olive Avenue.

The property, which was set to open in March, will instead open as a furnished extended-stay hotel under Korman’s upscale AKA brand. AKA has nine properties in five major cities across the United States, plus one in London.

Would-be renters in Current Apartments are out of luck now that the property will be an AKA. Its furnished apartments can be booked daily, weekly or even monthly, depending on the AKA location. It’s not yet clear what length of stay will be offered at this new West Palm Beach AKA.

Prior to the deal with AKA, the developer of Current Apartments said the 217-unit property was about 30% pre- leased. People were very willing to rent a small apartment if it meant living downtown and paying less money than standard apartments, said Joshua Haywood, development manager for Transwestern Development Company in Atlanta.

But at least one another micro-apartment complex is in the works, so would-be renters at Current Apartments might have another choice soon.

West Palm Beach developer Jeff Greene, who has flirted with building micro-apartments on and off for the past eight years said the plan could be back on shortly.

In an interview on Feb. 7, Greene said he’s close to reviving Banyan Place, a micro-apartment project slated for land he owns at 550 Banyan Boulevard, just west of City Hall.

In mid-2017, Greene obtained city approval to build the micro-apartments complex, but he shelved the project later that year. At the time, Greene was concerned the rental market wasn’t strong enough to command the rent prices he needed to make the micro-apartment building work.

Five years later, the coronavirus pandemic prompted an unexpected migration to Palm Beach County, creating a huge demand for housing that has pushed up rental rates. In downtown West Palm Beach, the median rental price of a one-bedroom is about $1,700 per month.

The rise in apartment rents has prompted Greene to dust off plans for Banyan Place. “The project is starting to make more sense, with rents being where they are,” Greene said.

The 1.2-acre Banyan Place called for a 12-story building with 348 apartments ranging in size from 340- to 560-square feet. Although the apartments were small, the building offered plenty of space for common areas. This included an amenity deck on the garage roof, with a canopy-covered outdoor bar, an oversized swimming pool, a cafe, pickleball court, barbecue area, and a sunken fire pit with built-in seating.

At the time, Greene said he hoped to rent at least some of the units for under $1,000 a month, well below the going rate for full-sized apartments. Greene said if he built the apartments now, he would lease them for no less than $1,500 a month.

Micro-apartments can fill a niche, especially for residents working downtown who want to live near their jobs and walk to work, a West Palm Beach city official said.

“I think there’s going to be demand, and we like the concept,” said Rick Greene, West Palm Beach development services director.

The city had hoped to see the micro-unit apartment concept unveiled with Banyan Place.

When that didn’t happen, Greene said the Current Apartments project was the next test.

Current Apartments was built with 217 “micro-apartments” ranging from 350- to 830-square feet. In addition to small apartments, the building also has 6,400 square feet for retail and restaurant space, and a 200-space parking garage, said Dave DeMay, principal and senior vice president of Kast Construction, the West Palm Beach-based contractor that built the complex.

Shannon Steudlein, a former leasing agent for Current Apartments, said the property was popular with professionals working at office buildings downtown.

In fact, interest in Current Apartments was so strong, the smallest units were leasing for $1,600 a month, said Transwestern’s Haywood. Small studios came with a built-in Murphy bed and cabinets. One- and two-bedroom units were offered for lease with furniture rental packages featuring sofas, tables and other items designed to fit a small apartment, Haywood added.

Current Apartments was slated to open in March as the downtown’s newest rental apartment complex, but then Korman Communities made an offer to buy the property and turn it into a hotel. Hotel representatives declined to comment.

On Tuesday, Korman requested city approval for a a change of the property’s use to a hotel. Real estate experts expect Korman’s furnished, extended-stay hotel will do well, too.

“I think it’s going to be a hit,” said Ginger Gowing, a real estate agent with the Ambassador Realty Corp. and a downtown West Palm Beach resident.

AKA by Korman Communities of Pennsylvania is a growing global brand of furnished extended-stay hotels that are designed for weekly and monthly stays.

The hotels include upscale business and lifestyle amenities typically found in luxury residences. AKA’s hotels are in London, New York City, Washington, D.C., Los Angeles, Philadelphia, Miami and soon, West Palm Beach.

Gowing said she sees a need for short-term rentals. She said sometimes professionals need to work in West Palm Beach for a few weeks or a couple of months.

She also sees interest from residents looking to buy a home in Palm Beach County. “A lot of people want to stay some place for two or three months while they buy,” Gowing said.

Then there are all the people remodeling, or planning to remodel, their homes. They need a place to stay for a few weeks when heavy construction makes it impossible to stay in their homes, Gowing added.

Finally, with so many residents choosing to stay in their homes year-round, Gowing said, the availability of rental homes for seasonal stays is limited, creating demand for a furnished apartment-style hotel for seasonal visitors.

Copyright © 2022 Palm Beach Newspapers, Inc., USA TODAY Network.

Go to Source
Author: marlam