- Arizona shows a tendency toward luxury living with Phoenix suburbs building almost exclusively high-end apartments over the past decade.
- 97% of the new premier apartment communities in the US have fitness centers, 90% have club houses, and 83% have pools.
- The largest luxury apartments are being built in Lubbock, TX (1,100 sq. ft. on avg.), followed by Buffalo, NY, and Bakersfield, CA.
- Houston, Texas, built the largest number of luxury apartments over the past 10 years – 72K, followed by NYC and Austin.
Apartment construction in the U.S. is on an upward trend, with more than 3.1 million new units delivered over the last decade across the country. 2021 has been the peak year of new apartment supply as about 417K new units entered the market, up 12% year-over-year.
In an effort to respond to the growing need for more housing and inclusive environments, most cities have supported the construction of new apartments, particularly in fast-developing urban hotspots like Houston, Atlanta and Seattle. All these move-ins created extra demand for self storage, which resulted in a perfect background for the self storage industry to thrive. In fact, self storage development activity boomed in all the top 20 cities where most apartments were delivered. Houston, the city that saw the most apartments delivered between 2012 and 2021 (77K units), also amplified its self storage inventory by no less than 4M square feet.
Aside from amping up residential and self storage inventories and allowing tight markets to cool down prices, the apartment development market has also been intensifying the amenities arms race and current buildings are able to satisfy even the most discerning tastes. In fact, the vast majority of the large-scale apartment complexes built in the last decade qualify as premier communities that feature both premium services and hi-tech amenities. According to our latest analysis of Yardi Matrix data, which includes a patented property ratings categorization, 86% of the new apartments delivered over the past decade across the country are classified as luxury dwellings.
The Sun Belt takes the lead in premier apartment construction
As people remain renters for longer than before, their expectations of what their homes must offer have also changed and developers have rushed to deliver – a trend that ultimately reshaped the face of the apartment market. Resort-like pools, tennis courts and putting greens, pet spas with dog pools and washing stations, business lounges and EV charging stations are now the new normal in many of the new apartment communities around the US. Naturally, variations occur, and some places make it easier than others for renters to enjoy the perks of modern renting.
To identify the best cities for amenity-rich living in the US, we’ve turned to data from our sister division, Yardi Matrix, and analyzed apartment deliveries in the 100 biggest cities in the US from 2012 to 2021.
Based on the ratio of high-end apartments out of the total deliveries in the last 10 years, it’s cities in Arizona, Texas, California and Nevada that shifted decisively toward premier living over the last decade. The cities that came out on top are not only gateway cities but also suburbs and satellite cities that can now easily vie with large urban hubs in providing premier lifestyles.
Gilbert, Chandler and Scottsdale, AZ, building almost exclusively high-end apartments for over a decade
Arizona and Texas became the poster children for urban growth over the past decade – both states saw, and continue to register, consistent incoming migration. As a result, cities in both states went through unprecedented economic and population growth, and the prosperity also translates into an increased appetite for rental apartments that provide superior living conditions for their residents.
Gilbert, Arizona, ranks first nationally in terms of luxury apartments – more than 4,000 units came online in the last decade, and they all offer top-of-the line amenities. The city’s population experienced a major boom, from around 210K people in 2012 to around 250K residents now.
In line with what is happening in the Phoenix metro area as a whole, Gilbert has attracted many businesses, which has allowed this small East Valley suburb to thrive. Companies such as Go Daddy Software, Banner Health and Deloitte are just some of the major employers in the city. The local unemployment rate stands at a very low 2.1%, signaling an employee-driven job market.
The apartment market is surely set on responding to the growing demand. The new Gilbert apartment communities come equipped with a whole set of lifestyle-centered amenities, from spas and swimming pools to club houses, business centers, gardens, and playgrounds. In addition to relaxing common areas, they also provide more living space. In Gilbert’s case, apartments that fall under the “luxury” label have an average size of over 1,000 square feet, about 250 square feet bigger than those in the non-luxury category.
Elevation San Tan, for example, a Gilbert luxury complex with almost 300 units, offers many apartments of 1,000 square feet and over – up to a very generous 1,400 square feet. But, more than the sheer size of the apartments, the luxury community provides access to a wide range of amenities. These vary from smart features on locks, lights and thermostats, pools with cabanas, fitness centers and social lounges to more unique ones like dog parks, pet grooming rooms and bicycle repair shops.
The other two Arizonan cities in the top 20, Chandler and Scottsdale, rank second and fourth, respectively, for luxury apartment construction, with 99% and 98.5% of the units built during the past 10 years being premier apartments. Overall, Chandler saw the addition of over 6,800 new units over the past decade, while Scottsdale added 8,600 apartments to the local inventory. Luxury apartments in Chandler and Scottsdale, averaging 970 and 983 square feet, respectively, are about 200 square feet bigger than their non-luxury counterparts and feature a host of extra amenities including outside storage.
D-FW scores three positions among the top 10 cities for high-end apartment living
The Dallas–Fort Worth Metroplex represents a very fertile ground for premier apartment complexes. Plano and Irving, along with the city of Dallas itself, made it among the top 10 cities that mostly built luxury rentals over the last decade.
Plano, Texas, ranks first among the Texan cities and third nationally, with 98.5% of its 8,300 new apartments offering top-notch living.
Located just 20 miles from downtown Dallas, Plano has been gaining a lot of accolades lately as it boasts both a business-friendly environment as well as a good standard of living that got it a respectable 9th place in a recent list of the best cities to live in America. The local employment scene includes Siemens, Cigna and PepsiCo, as well as new companies that eye Plano for future expansions or relocations. Among others, telecommunications equipment firm DZS recently announced plans to move its headquarters from Oakland, California, to Plano. The easy access to well-paying jobs – the median income in Plano is almost $66K per year – is one of the factors that fuel the appetite for premier living.
Newly delivered apartment complexes in Plano, such as Opal Legacy Central, are drawing in renters with a combo of generous floor plans and amenities that include, among others, culinary lounges with full kitchen and pizza ovens, resort-type pools, sky-deck clubrooms and co-working spaces.
Alongside young professionals who can easily commute to the many job centers in D-FW, Plano is particularly attractive for families with children who can benefit from the good school districts and the many kid-friendly activities in the area.
Irving, Texas, ranks 6th for luxury apartments, with 97% of the over 5,600 apartments built since 2012 showcasing top-rated amenities.
The city of Dallas itself has been growing by leaps and bounds across all sectors of real estate and the apartment market is no exception. No less than 55,000 units have been delivered in Dallas over the last decade, with 96% of the new supply being luxury apartments. Moreover, as the population swelled and moving activity intensified in Dallas, the self storage sector joined multifamily real estate in its boom over the last 10 years. In fact, the Dallas-Fort Worth metro area leads self storage development in the US, with no less than 23M square feet of space delivered since 2012. This influx of new space brought per capita figures up to 7.4 and has allowed street rates to remain on the affordable side. A 10'x10' storage unit in Dallas currently rents for $118/month. Meanwhile, the same type of storage unit in San Francisco – a market that’s massively undersupplied at 2.5 square feet per person – goes for $272/month on average.
Another of Texas’s powerhouses, Houston, didn’t crack the top 10 but it still landed a great 13th position among the cities with most high-end apartment options. 94% of the almost 77K apartments built here in the past decade come with once-exclusive, now-baseline, amenities including fitness centers, lap pools and business centers. Additionally, new units located in top-rated properties are about 137 square feet bigger on average than non-luxury units.
Orlando, Florida, built over 30K luxury apartments over the past decade
Orlando has always been big on tourism but it’s now increasingly becoming a business hub with a healthy job market. In a commendable feat, the Orlando area had the highest number of private sector jobs among all the metro areas in the US over the year up to March 2022 as well as the fastest private sector over-the-year job growth rate. Incomes hover around $43K per year, with companies such as KPMG, Sonesta, Disney and InnovaCare Health having recently announced plans to add jobs to the local employment market.
In an effort to respond to the growing demand for housing, almost 31,000 new units have been added in the last ten years to the local housing stock. 97% of the new apartment supply in Orlando can be classified as luxury apartments, making it fifth in the nation for premier apartment living. Besides excellent amenities, these apartments also provide, on average, 140 square feet more space than the non-luxury ones.
Apartment communities such as The Julian are redefining renters’ wants and needs in Orlando. The artsy interior design blends with amenities that include a rooftop pool and clubhouse, work from home spaces, and courtyards that allow residents to relax outdoors.
Tourist destinations Virginia Beach, Chesapeake make it to the top 10 cities for luxury apartments
Virginia Beach and Chesapeake rank 8th and 9th respectively, each with around 95% of all the apartments built since 2012 being luxury apartments. Both cities have local economies relying on tourism and, apart from hotels and motels, rental apartments are also in demand, with retirees and other categories of Americans favoring temporary relocations to these areas, and many of them being willing to pay extra for great amenities and more space. Virginia Beach built around 6,200 new apartments over the past decade, while almost 2,200 units were added to the local inventory in Chesapeake during the same period.
Luxury apartments in both cities are on the large side – 1,000 square feet in Virginia Beach and 1,036 square feet in Chesapeake. About 16% of the luxury apartments in Chesapeake have access to a golf course, the highest share among the country’s top 100 biggest cities.
Wichita lures in lifestyle renters with amenity-laden communities
Some of Wichita’s best attributes are an affordable cost of living and a dynamic economy centered around manufacturing and aviation, with companies such as Spirit AeroSystems, Cessna, Bombardier Learjet and Koch Industries being major employers in the area.
One attribute for which Wichita, Kansas, might not be on everyone’s radar is luxury living – however, almost 95% of the over 2,600 apartments built in the city over the past decade are premier apartments, helping the city rank 10th nationally. Luxury apartments in Wichita are, on average, 130 square feet larger than the non-luxury units.
One of Wichita's recent premier communities, 225 Sycamore, offers features such as an infinity-edge pool, a golf simulator, a sea salt sauna, a hammock garden and much more. Similarly, the student housing sector in Wichita is also aiming to impress. The Seventeenth, a multi-building apartment complex that caters mainly to college students, offers a mix of stylish amenities and eco-friendly features, including lounge pools, sand volleyball courts, grilling stations, stainless steel appliances and smart thermostats.
Jersey City’s high-end apartments provide significantly more floor space than regular units
Jersey City has long been a favorite destination for New Yorkers in search of less hassle and cheaper housing, all within a comfortable commute from NYC’s financial district, and it’s one of the factors that have been keeping the local housing market on fire.
Construction activity has been intensifying in Jersey City, with more than 18K apartments built here over the past 10 years. Among those, almost 95% can be classified as high-end. In addition to all-inclusive common grounds, the units in luxury communities offer living spaces that come with 200 square feet more floor space than regular apartments.
Premier living surges in the South led by Atlanta, GA, Nashville, TN, and Charlotte, NC
Three of the most in-demand cities in the South made it into the top 20 of cities with the highest proportion of luxury apartments built during the decade starting in 2012. Atlanta, GA, a city receiving lots of attention lately from new businesses and residents alike, ranks 12th with 94.4% of the more than 48K apartments built over the past 10 years being luxury apartments. The average size of the premier apartments in Atlanta stands at 980 square feet, about 80 feet larger than the non-luxury ones.
Nashville, TN, which, apart from its entertainment industry, is very active in sectors such as tech and health care, also makes it into the list, ranking 18th, with 93% of the almost 25K apartments built during the past decade being luxury apartments.
Charlotte, NC, ranks 19th with a little under 93% of the decade’s almost 47K new apartments being luxury apartments. The construction of high-end units ramped up significantly throughout the past decade: while 62% of the apartments built in Charlotte in 2012 were premier apartments, most of the following years of the decade saw over 90% of the new apartments built being luxury ones.
Reno, NV, and Chula Vista, Anaheim in CA, at the forefront of high-end living in the West
Two cities in Nevada, Reno and Henderson, and three Californian ones, Chula Vista, Anaheim and Irvine, are among the country’s top 20 cities for luxury apartment construction.
Reno, Chula Vista and Anaheim rank 14th, 15th and 16th, with percentages of luxury apartments out of those built during the past decade hovering around 94% and 93% respectively. Chula Vista is also building the largest luxury apartments among the top 20 cities, with an average size of 1,045 square feet.
Renter preferences are increasingly turning to high-end living. In a trend that’s been recently amplified by pandemic-triggered challenges, our homes have been getting more attention, including the amenities that can make our lives easier and more agreeable, as well as more space at home. The multifamily sector is adjusting, building apartments that can satisfy modern needs – 46% of the luxury apartments in the country’s top 100 biggest cities were built during the past decade.
What the experts say
Robert M. Aydukovic, M.S., Teaching Specialist for the Construction Management in the School of Planning, Design and Construction; Co-Coordinator, Real Estate Development and Construction Graduate Certificate Program, Michigan State University
Do you think that the apartment construction industry in the US meets current housing needs?
No. The United States is in a housing deficit and has been since the early 2000’s. The housing shortage we are seeing now is really a factor of several macro trends:Read more....
- Remnants of the Great Recession which in our industry (commercial construction and real estate, which includes multifamily residential) where home building slowed to a trickle and has yet to recover to pre-recession levels, triggering demand for multifamily.
- A nationwide workforce shortage in construction, particularly in the skilled trades.
- Demographics of the Millennial Generation.
- Pandemic related shocks from highly volatile construction material price swings, supply chain disruptions, and the flood of “cheap money” in the form of government stimulus.
All of this and more had led to the current housing shortage. Some geographic regions are in better shape than others, but particularly acute shortages remain in certain sectors.
Has the apartment market changed the range of amenities it provides in the aftermath of the pandemic?
I think that is still being determined. The pre-pandemic trend in urban cores was a focus on the conversion of vacant or underutilized office space to multifamily use, with units trending smaller and a high level of communal space. The individual units were geared towards sleeping, privacy and a small amount of personal item storage with the building amenities serving the “living” part of life. Buildings had game rooms, community kitchens, mini-theaters for movie nights, gyms, etc. all things that could not be effectively used during lockdowns and quarantines. During the Pandemic, demand shifted to reliable broadband internet access and upgrades to HVAC systems for filtration, circulation and air flow. As we emerge from the Pandemic, some of the communal spaces will reactivate but some newer properties may be looking to make the individual units more like “home” than a “bedroom upstairs.”
What trends do you think we will be seeing in apartment construction activity in the near future?
I think we’ll see a larger focus on indoor air quality and broadband/5G networks being turned into a selling feature in the near future. Buildings with larger units that provide more space for spreading out, plus a home office, and don't make us feel so confined if we have to enter lockdown periods will be in higher demand for a time. Buildings in close proximity to outdoor space for distancing and recreation will outperform. Also, developers should pay attention to the preferences of Gen Z as the Millennials are aging out of the apartment lifestyle and looking for their first or second homes. Gen Z is trending to be highly mobile, very tech savvy and values experiences over material items.
Harold Hunt, Ph.D., Research Economist, Texas Real Estate Research Center, Texas A&M University
Do you think that the apartment construction industry in the US meets current housing needs?
I can only speak for Texas, but I believe Texas is behind the curve in new apartment construction.Read more....
I base that thought on a year-over-year increase in average apartment rents in Texas that is just under 20%. Permits and deliveries here in Texas have been fairly flat over the past several years, although Texas continues to be popular for out-of-state migrants. So, currently demand is far outstripping supply.
Has the apartment market changed the range of amenities it provides in the aftermath of the pandemic?
I don’t think the range of amenities has changed in any meaningful way here in Texas since the pandemic. However, there has been a long-term trend toward more Class A construction and less Class B units.
Doug Ressler, Business Intelligence Manager - Yardi Matrix
Which are the best apartment markets for new development in the US at the moment?
As preferred relocation destinations massively attracting young professionals – tech talent in particular – both Texas and Arizona have amped up their construction games in the major urban hubs and their feeder cities. And although still far from meeting demand, local markets are abuzz with activity and new rental options. High-end amenities – including working-from-anywhere advantages like high-speed internet and sound-proof spaces – have now become the standard in the newest apartment communities and can act as deal breakers for lifestyle renters.Read more....
Has the apartment construction market changed the range of amenities it provides in the aftermath of the pandemic?
The current amenities strategies are totally changing the apartment feel. Renters want the feel of living in a house and not just another apartment, with more room to live, work and play. Renters want to feel like you're more in a home.
But apartments do not typically have the extra storage space such as garages, basements etc. that single family houses offer. This creates an opportunity for self storage placement to accommodate larger family size rentals and growing space requirements.
Will self storage development mirror apartment construction trends?
Vertical properties, that are designed to accommodate dense populations and to maximize every amount of land available, will continue to remain a constant in the country’s busy urban hotspots. Single story facilities, on the other hand, tend to be more sprawling and based in suburbia, with larger storage units being needed there for household furniture, tools, appliances, toys, and so on. Data indicates that out-migration from urban areas to suburban areas creates an opportunity for single story self storage development in suburban areas. Market location will anticipate the rise of material costs and availability of land to develop storage.
This analysis was done by StorageCafe, an online platform that provides storage unit listings across the nation.
The national apartment construction data comes from Yardi Matrix. To come up with the list of the most luxury oriented markets, we considered the country’s top 100 cities by population. We excluded San Juan, PR, Laredo, TX, Anchorage, AK, and Spring Valley, NV, due to a lack of data.
We looked at apartment construction evolution in the country’s top 100 cities from 2012 to 2021. Only apartment complexes with 50+ units were included in our research.
We ranked the cities based on the proportion of luxury apartment units as a percentage of total apartments built over the past decade.
Luxury apartments are defined as apartments with the following improvement rates: A+, A, A- and B+, based on a patented property rating categorization from Yardi Matrix.
The data regarding the number of apartments built, apartment improvement rates, apartment sizes, self storage rates and self storage per capita were taken from Yardi Matrix.
The population data was taken from the US Census.