The Apartments at 3400 Selwyn, a Phillips Development and Realty community in Charlotte, NC, is hosting their 3rd Annual “Pumpkin Carving Contest” this month on October 31st. The contest is open to all residents, and is always a successful event for the property. As many as twenty-five pumpkins were entered into the contest last year. Prizes range from $20.00 to $100.00 off of the top three winning residents’ rent! Pumpkins will be judged by the staff at 11:00am on Wednesday, October 31st.
On the night of October 5, 2012, Phillips Swift Creek hosted a Think Pink for Breast Cancer Awareness Party and bake sale fundraiser. The clubhouse was decorated in pink and the nearly 50 residents and staff that came out for this great cause wore pink or wore a pink ribbon that was provided. Many residents took the time to buy or simply bake goods for the event. Papa John’s Pizza provided pizzas, and Abbey Road Bar and Grill of Cary donated chicken wings. Phillips Swift Creek’s Maintenance Supervisor, Julio Rivero, provided the music as the DJ for the night. It was great to have all of the residents come together to laugh, dance, eat, and most importantly raise money for Breast Cancer. In the midst of everyone was one of our very own residents that had just undergone a double mastectomy just a few days before the party. In spite of this, her positive spirit and encouragement enlightened the room. There many others in attendance that had personal experiences or had love ones that have had battles with the disease. By the end of the night, the residents raised over $250.00 for the Susan G. Komen Foundation. Residents also wrote well wishes in cards that will be delivered to the Cancer Centers of NC, Breast Cancer Treatment clinic at the Cary, NC location. Phillips Swift Creek will continue to take donations as well as written well wishes through the end of October. Vera Morris, Phillips Swift Creek Property Manager, says, “I couldn’t be more proud to manage such a wonderful group of residents. It was nice to see everyone come together for such a great cause.” For more information about this event or to get involved with Phillips Swift Creek’s support of the Susan G. Komen Foundation, please contact Vera Morris at 919-465-1992 or email@example.com.
Phillips Development & Realty (PDR) held a Grand Opening Celebration at its newest Charlotte development, Phillips Mallard Creek, in Charlotte’s University area on October 11th, 2012. The 300-unit project broke ground in September 2011 and is scheduled to be completed in the spring of 2013.
Guests were treated to live music by The Mack Attack and catering was provided by Cosmos Café. Guests in attendance included current and future residents, investors, property vendors, and Phillips employees. Ceremonies included a ribbon cutting and a memorial dedication for former PDR Project Designer David Riese.
The Class A community’s amenities include a 5,500 square foot clubhouse with a 24/7 fitness center and internet café, an expansive pool deck with private cabanas, and private garages. The one, two and three bedroom apartments range from $800 to $1,150 per month and feature granite countertops, stainless steel Energy Star appliances, and 42-inch cabinets.
Leasing has started strongly for the project, with over 20% of the units preleased. According to Ken Wazyniak, Asset Manager for PDR, “This is the most upscale apartment community within a few mile radius, and the only brand new community in the area to open within the past couple years. We received high interest from the local community when construction began last fall and we were able to convert many of those leads to leases. Many of the residents from communities we have ties with in the area have stayed in touch with our management team and are excited to move to our newest community. We’re anticipating a quick lease-up.” Phillips currently owns the 129-unit 3400 Selwyn Apartments in Myers Park and formerly owned and managed the 372-unit Phillips University Center (now University Center Apartments) in the University Area.
About Phillips Development & Realty
Phillips Development and Realty (PDR) is headquartered in Tampa, Florida. Since 2001, PDR has demonstrated itself as a leader and innovator in the multi-family industry, building progressive projects throughout the Southern United States. For more information, visit www.pdrllc.com.
Source: Multi-Housing News Online
The construction of Phillips Mallard Creek, a premier 300-residence apartment project scheduled to sprout up just a stone’s throw from the University of North Carolina at Charlotte, is due to get underway as Phillips Development & Realty LLC secures financing through the U.S. Department of Housing and Urban Development’s 221(d)(4) program.
Mallard Creek will occupy a 30-acre site along Mallard Creek Rd., a location within close proximity to I-85 and Hwy. 29, as well as such leading employers as AT&T, Carolina Medical Center and IBM, as well as the multi-tenanted University Research Park.
The HUD financing comes in the form of a 40-year, fixed non-recourse loan. The number of commitments through the FHA 221 program, which provides Federal Housing Authority mortgage insurance to HUD-approved lenders, is on the upswing once again, returning from a low point during the collapse of the housing market in 2008, a HUD spokesperson tells MHN. Commitments that year dropped to 18, but quickly began to recover in 2009 and 2010 with 36 commitments and 57 commitments, respectively.
Phillips will commence construction of Mallard Creek once the company settles on a general contractor, with plans to complete the project within 18 months of the start date.
If the newfound success of the Charlotte apartment market continues, the new development will likely experience a smooth ride to full occupancy. The numbers tell the story. “Charlotte was a middle-of-the-pack type of market up until the last few months,” Jay Denton, vice president of research with apartment market research firm Axiometrics, tells MHN. “Its annual rent growth ranked 50th out of 88 markets in January. Now it has the 10th best annual rent growth in the country at 8 percent. Presently, the average occupancy level in the city is a respectable 94 percent, the highest since 2007.”
Industry experts are confident that favorable conditions will lead to further tightening of Charlotte’s apartment market. “Demographics for apartments are up in general,” Engle Addington, an analyst with multifamily market statistics provider Real Data, says, speaking to MHN. “People aren’t buying homes right now, and you’ve got the echo boomers who are starting to rent and people who lived with roommates during the recession. Those factors are leading to historically high demand. The occupancy levels aren’t there yet, but with the rate of demand and lack of new construction, they’re going to reach record levels.”
Florida real estate firm Phillips Development & Realty has secured $26.7 million in construction loan financing to build a 292-unit apartment complex near Research Triangle Park in Durham.
The Phillips Research Park Apartments began construction on June 19, the same day that the deed of trust with lender CBRE HMF Inc. was filed with the Durham County Register of Deeds, according to county records.
CBRE HMF Inc. is using the U.S. Department of Housing and Urban Development’s new construction financing program under Section 221(d)(4) that insures lenders against loss on mortgage defaults, according to Phillips. The HUD program allows for long-term mortgages of up to 40 years that can be financed with Government National Mortgage Association mortgage-backed securities, according to the HUD website.
Phillips Research Park Apartments is located across from the northern entrance of GlaxoSmithKline’s main campus in RTP. Its first units are planned to open in spring 2013 with the project expected to be completed by September 2013.
The general contractor for the project is LandSouth Construction of Jacksonville, Fla. LandSouth will be working with Spartan Construction LLC of Tampa, Fla, a closely held affiliate of Tampa-based Phillips Development & Realty.
Phillips estimates that the project will provide an estimated $345,000 in annual tax revenue for Durham, as well as create six full-time property management jobs once completed.
Phillips Development in August opened the 196-unit Phillips Swift Creek apartment community near downtown Cary.
Phillips Development & Realty Strikes Again in NC with $26.7M Loan For Research Park Apartment Development
Phillips Development & Realty (PDR) secured financing for its newest project, the 292-unit Phillips Research Park Apartments in Durham, NC. Construction started Jun 19, 2012 with first unit deliveries planned for spring 2013. The project will be completed by September 2013.
The $26.7M loan for the class A market rate project was funded through CBRE HMF, Inc. using the US Department of Housing and Urban Development’s Section 221(d)(4) new construction insurance program. Phillips Research Park is located just outside RTP across from the northern entrance of GlaxoSmithKline’s world headquarters. Fundamentals for this multi-family site are sound with 1200+ feet of frontage on NC-147/Durham Freeway, and 50,000 high-tech employees within a five minute drive. The one, two, and three bedroom apartments of Phillips Research Park will feature stainless steel appliances, granite countertops in kitchens and bathrooms, and 42” cabinetry. The community amenities will include a high-end clubhouse with a 24/7 fitness center, business center, media room and a resort-style pool.
The General Contractor is LandSouth Construction of Jacksonville, FL, who will work closely with Spartan Construction LLC of Tampa, FL, a closely held affiliate of PDR. Spartan will perform 30% of the overall project scope including kitchens, cabinets, granite, appliance supply and installation, flooring, paint, landscaping, hardscapes, pools and decks, as well as interior design. “We are excited to be a part of a proven team that will deliver this great residential community”, says James Pyle, President and CEO of LandSouth Construction. “With our integrated approach to project management, our Project Team will jointly succeed in achieving the targeted objectives of delivery for the Phillips Research Park luxury apartments”, states Phil Baker, Vice president of Spartan Construction. The project will create an estimated 300 jobs during construction and six full-time property management jobs once completed. The property will also provide an estimated $345,000 in yearly tax revenues for Durham County and the City of Durham.
PDR also currently has the 300-unit, $28.4M Phillips Mallard Creek Apartments under construction in Charlotte, NC. Initial occupancy in Charlotte is expected in July 2012. In December 2011 PDR completed the 196-unit Phillips Swift Creek Apartments in Cary, NC. Swift Creek is currently 93% occupied.
About Phillips Development & Realty
PDR is a leader and innovator in the multifamily industry, building progressive projects throughout the Southeastern United States. PDR builds projects with the interest of communities, the environment, and investors in mind. The company ranked #11 in the US in 2009 as one of the nation’s top builders by Multifamily Housing Executive.
About Spartan Construction
Spartan Construction, LLC is a full-service General Contractor, also supplying logistics and trade supplies based in Tampa, FL. With over 100 years of construction & development leadership, Spartan’s experience encompasses a wide range of real estate projects. Spartan’s current focus is on new construction, design build, and renovations for multifamily and hospitality clients. Spartan prides itself on excellence in the finished ‘touchable’ products on projects. Spartan specializes in Class A unit cabinetry and granite, flooring, lighting, paint, appliance supply and installation, landscape, hardscapes, and pools.
Phillips Development & Realty, LLC is pleased to announce the recent promotion of two employees and a new addition to our team.
Diane Paris, who has been with PDR for over three years and has been the Property Manager at 3400 Selwyn Apartments for nearly two years, has been promoted to Property Manager of the brand new 300-unit Phillips Mallard Creek in Charlotte, NC. During her tenure at 3400 Selwyn, Diane guided the property through various capital improvement projects and played a large role in boosting the property’s NOI by over 25%. We are looking forward to her dynamic leadership at our newest community.
Kevin Lawson has been promoted to Property Manager at 3400 Selwyn Apartments. Kevin has been with PDR for over two years as a Leasing Consultant and has been instrumental in keeping 3400 Selwyn’s occupancy consistently above 95%, as well as reducing delinquency. As the property continues to thrive, Kevin will oversee major and minor capital improvement projects as well as PDR’s long-term goals for the community.
Natasha Poole recently joined PDR from Southwood Realty and will be joining Diane Paris at Phillips Mallard Creek as the Assistant Property Manager. Natasha’s outgoing personality and former experience as a Property Manager will help PDR make our newest community another success story for the project’s residents and investors.
PDR is currently staffing our newest property, Phillips Mallard Creek. For employment opportunities, please visit our website or contact Ken@pdrllc.com.
MCSHANE CONSTRUCTION COMPLETES 196-UNIT CLASS A RESIDENTIAL COMPLEX FOR PHILLIPS DEVELOPMENT & REALTY, LLC
(Eight-Building, 239,196 S.F. Phillips Swift Creek Luxury Multi-Family Property Offers Resort-Style Amenities in Cary, North Carolina)
(Auburn, Alabama) – Scott J. Hoppa, Vice President of McShane Construction Company’s Southeast Region, is pleased to announce the completion of the new 196-unit, 239,196 square foot Phillips Swift Creek multi-family assignment on behalf of Phillips Development & Realty, LLC.
Phillips Swift Creek, situated on a 13.18-acre site at 2025 Swift Commons Lane in Cary, North Carolina, provides convenient access to both the Raleigh and Durham markets and is situated within minutes of the world renowned Research Triangle Park. The new residential development offers access to I-40 and Highway 64 and is in close proximity to Crossroads Plaza, Cary Towne Center, RDU International Airport and downtown Raleigh.
Phillips Swift Creek is comprised of seven three-story buildings and one split-level building, offering one-, two- and three-bedroom apartments in a variety of configurations. Each building features an attractively-constructed masonry and fiber cement siding exterior. The apartment unit interiors offer Energy Star stainless steel appliances, granite countertops, a garden-style soaking tub, 42” wood cabinetry, high-efficiency central air conditioning and spacious patios or covered balconies.
Additional amenities within the Phillips Swift Creek complex include storage facilities, enclosed garage spaces, an outdoor grilling area and abundant walking and biking trails. This resort-style complex also features an all-natural saltwater swimming pool, sundeck, Internet café, bocce ball court and a putting green. The 5,000 square foot clubhouse offers residents a 24-hour fitness center, media room, a game room with a billiards table and a party area.
“Swift Creek is yet another successful Phillips Development & Realty Class A+ apartment community. The Cary market is already proven strong as the community is 75% pre-leased and will stabilize in the spring,” commented Kevin Johnston, Chief Operating Officer, Phillips Development & Realty, LLC. “We are also very excited about our new project with McShane Construction – Phillips Mallard Creek – located in Charlotte, North Carolina. The Mallard Creek project is a 300-unit development appealing to young professionals in and around the University of North Carolina Charlotte, the Carolina Medical Center, and the University Research Park complex.”
McShane Construction broke ground on Phillips Mallard Creek in September of 2011 with the initial units slated for completion in mid-summer 2012.
Atlanta, Georgia-based The Preston Partnership, LLC provided the architectural services for both the Phillips Swift Creek and Phillips Mallard Creek multi-family assignments.
About McShane Construction Company
McShane Construction Company was established in 1984 and is headquartered in Rosemont, Illinois with western regional offices in Phoenix, Arizona and Irvine, California with a southeast regional office in Auburn, Alabama. The firm offers integrated design/build and build-to-suit construction services for the office, healthcare, hospitality, recreational, retail, multi-family, manufacturing and distribution markets. For more information, visit the firm’s recently updated web site at www.mcshane-construction.com.
By: Jim Harris
Patience and persistence in finding funding for a large apartment development near the University of North Carolina Charlotte is paying off for the project’s developer. Tampa-based Phillips Development & Realty broke ground in September 2011 on the $28 million Phillips Mallard Creek class A+ apartment community at 655 West Mallard Creek Church Road in Charlotte.
The complex is located within walking distance of the University of North Carolina at Charlotte and minutes from Carolina’s Medical Center and University Research Park. The property also provides close proximity to key transportation corridors including Interstate 85, Highway 29, Interstate 485 and Interstate 77, and the future Charlotte blue line light rail stop. The 321,582-square-foot complex will feature a total 300 units with 11 three-story buildings plus a clubhouse on a 30-acre lot.
General contractor McShane Construction is leading the project, which is on track for a May 2013 completion. Initial occupancy on some of the 300 units in the 12-building complex will begin in July 2012, Development Manager Ryan Hartney says.
The project was conceived before 2004 and was planned to begin in 2008, when the national housing market was affected by the recession. After losing its initial financing, Phillips secured a loan for Mallard Creek through CBRE with the U.S. Department of Housing and Urban Development’s 221(d)4 Program. A 40-year fixed non-recourse loan backed by HUD was closed in 2011. This project will be market rate and is not part of any subsidized program.
“The biggest challenge with respect to the project as a whole is keeping everyone together, on the same page and shooting for the same target,” Hartney says, noting that the HUD approval process delayed groundbreaking by more than 18 months as the HUD 221(d)(4) Program was basically the only form of financing available over the past three years. Many developers like Phillips submitted applications and created a large backlog in the HUD system and its processing of the loan, the developer says.
“Getting this deal closed and putting the project together was the most challenging part of getting this project to where it is today,” he adds. “One thing we’ve really learned from this project is to keep your head up at all times. It was important for us to stay positive, keep our nose to the grindstone and make this happen.”
Phillips Development, founded in 2001, builds and owns residential properties in the southern United States. Its projects are generally located near healthcare properties and retail districts. “We’ve found that second-tier markets near major city districts have been successful for us in the past and will likely be successful for us in the future,” Hartney says.
The 300 one to three-bedroom units in the 30-acre complex are targeted for rental to UNC-Charlotte students, staff and faculty, as well as employees of the Carolina Medical Center and University Research Park.
With financing now secured, foundation and slab work is now fully underway. McShane in December began foundation work on two of the complex’s 12 buildings, with concrete slabs poured on two additional buildings.
The 11 apartment buildings on the site will feature a stick frame construction with Hardie siding. The 12th building – a clubhouse – will feature similar materials as well as brick. The sizable rental development will offer one-, two- and three-bedroom apartments with varying floor plans. Individual apartment finishes will incorporate granite countertops, high-end 42-inch cabinetry, vinyl plank and ceramic tile flooring and stainless steel Energy Star appliances.
The clubhouse will offer residents a number of amenities including a resort-style pool, a media room, a sports bar, an all-purpose room and study areas. Most of these areas will feature LED lighting.
The surrounding site will include grill and picnic areas. The complex will also offer tenants walking and biking trails, pet exercise area, carwash, carport parking structures, and nine garage buildings. “The layout of the site will highlight a creek running through the property,” Hartney says. “We want to feature the natural beauty of our surrounding property and add value to our residents through that.”
Phillips self-performs landscaping on its projects. “We’ve found ways to save on our operating expenses by incorporating more plant life that grows naturally, doesn’t require as much irrigation and adds a natural value to the property,” he adds.
A Collective Effort
The Phillips Mallard Creek development is the second Phillips project in recent years to be built by McShane Construction. The contractor in 2011 finished work on Phillips Swift Creek, a 196-unit garden-style apartment complex in Cary, N.C.
McShane is headquartered in Rosemont, Ill., with regional offices located in Arizona, California and Alabama. The firm serves several markets, including multifamily, office, healthcare and hospitality.
“I think we bring a lot to the table when it comes to the multifamily market,” Project Manager Dave Blanchard says. “We’ve completed many successful and challenging projects and had many repeat customers, so I think that speaks to our capabilities.”
The contractor used many of the same subcontractors on both of its projects for Phillips. Hartney credited McShane and its subcontractors with their expertise and patience throughout the Mallard Creek project.
“McShane has been great all the way through, and we’ve developed a very good relationship with them,” he adds. “We made this happen collectively.”
Source: Floor Daily
By: Jessica Chevalier
When the housing market collapsed, it yielded changes not only in how homes are valued but also in how they are constructed and designed. Many of today’s customers are more concerned with efficiency, prioritizing what they need over what they want, and choosing materials that offer durability. In their flooring, renters and buyers in the multi-family, specification (spec) built and customer built markets are seeking finishes that promise durability and convey quality. As the values of renters and buyers change, it behooves flooring contractors and retailers to understand the emerging trends.;
Because of the fact that credit has tightened and foreclosures are widespread, the multi-family market is surging; rent prices are on the rise, and, with buyers less willing to pull the trigger on a purchase (especially with the uncertainty of when home prices will start to reverse their decline), continued growth is anticipated. As you might expect, a renter who was once a homeowner or one who is delaying their first home purchase doesn’t want an apartment that looks like a college dorm room. They want an apartment that feels like a comfortable home with quality finishes.;
The spec built home market also suffered in the recession. Spec homes are those that are constructed by a builder who intends to sell the property during the construction process or after the home is completed; in this situation, the builder makes the decisions about the footprint and major features of the home, and the buyer (if they are involved in the process early enough) may choose finishes and upgrades. In 2005, homes that were built for sale (spec built) made up 79.2% of the market; by 2009 that number fell to 66.4%, according to the National Association of Home Builders (NAHB).
Whereas having an inventory of homes built or slated to be built seemed like an asset (an assurance of money in your pocket) before the market collapse, builders today may be more hesitant to build a property that will drain liquid capital until it is sold, which may account for why spec homes are making up a smaller portion of the market. In the custom built home market, a home is constructed according to a buyer’s specifications, often on their own lot. In this situation, the owner has control over both the major elements of footprint and design as well as over the finishes (inside and out). The number of contractor-built custom homes rose 7.2% (from 11.4% to 18.6%) between 2005 and 2009, says the NAHB.
In terms of flooring trends, renters and buyers in all of these markets share a preference: an increasing partiality for hard surface flooring, and the hard surface of choice is wood (or a wood look). Across all the markets, darker tones are preferred over naturals in hard surface flooring, and wider widths are desirable as well.
There is a widespread belief that hard surface flooring is healthier than carpet because it doesn’t trap allergens (soft surface manufacturers dispute this claim), and many builders and retailers in the industry report that this plays a significant role in why customers prefer hard surface flooring. For this reason and others, carpet is often being relegated to bedrooms or skipped altogether.
While only two of the builders that we spoke with say that they are building smaller homes than they were before the recession, the NAHB reports that, across the nation, square footage is decreasing, from an average of 2,253 square feet in 2005 to 2,100 square feet in 2009. Of course, after a recession it only makes sense that customers feel compelled to cut back and reject the idea of excess, at least for a time. Smaller square footage means reduced heating and electric costs, after all, so the savings aren’t felt only in the purchase of a home but on a monthly basis as well.
With regard to sustainability, it might seem counterintuitive that builders are showing an increasing interest in going green amid the housing slump, but Nate Kredich, vice president of residential market development with the U.S. Green Building Council, reports that that is exactly what’s happening, because builders and developers see it as a means of establishing a competitive edge against the glut of homes already on the market. “They have a rich opportunity to build something better,” says Kredich, “to build a very high quality, highly energy efficient, water efficient home.” He points out that KB Homes, traditionally a value builder, just earned LEED Platinum certification for a new multi-family development in Los Angeles. “You would never have seen that three years ago,” Kredich says.
CASE STUDY: MULTI-FAMILY HOUSING
Phillips Development builds and leases Class A apartments in North Carolina, Texas and Florida. The company’s units rent for between $800/month and $1,500/month—or about $1.00 to $1.10 per square foot per month, depending on the floor plan. Phillips’ properties are aimed at young professionals and are outfitted with amenities like granite countertops, stainless steel kitchen appliances and large 42” cabinets that give them a higher end look and feel.
To complement that upscale look, Phillips prefers to use wood-look vinyl plank flooring throughout its properties. In fact, the company did a market study that revealed that it could get an extra 5% to 15% in rent by installing vinyl throughout its units. Though vinyl does cost about 60% more up front than carpet ($1.24 for base grade carpet versus $1.98 for vinyl plank), it does not have to be ripped out and replaced between tenants as carpet does. And damaged spots can be replaced plank by plank, which saves both material and labor costs.
However, there is one major drawback to using luxury vinyl tile in apartment units—sound transfer. Tenants on the lower floors can hear movement on the floor above, and this is the biggest source of tenant complaints for Phillips. The company has looked into engineered hardwood since it would better hamper sound transfer, but the material is cost prohibitive for Phillips’ purposes.
Beige cut pile carpet is used in Phillips’ units on a limited basis; when it is used, it is installed in bedrooms. Phillips is interested in transitioning from broadloom to carpet tile because of the ease of replacement tile provides. The company has determined that, in spite of an increased up front cost, carpet tile is a financially beneficial investment after four years installed.
Phillips’ apartments have not decreased in square footage during the recession, unlike some single-family homes, but the company has changed the units somewhat—opening up the kitchen to the living area to bring more light and life to the spaces.
Flooring is one of the first selections that Phillips makes in the development process. The company considers maintenance and ease of replacement its top priority in flooring selection, but price and sustainability are significant factors as well.
Phillips reports that its leasing outlook is fantastic at present. On its new Phillips Swift Creek property in Cary, North Carolina, the company had 22 pre-leases signed, even before it received the certificate of occupancy.
CASE STUDY: ENTRY LEVEL SPEC BUILT SINGLE FAMILY HOMES
Pulte is a national spec builder that constructs homes ranging from under $100,000 to over $1,000,000. The company also develops active adult communities, townhomes and a broad range of other housing solutions.
Pulte reports that the trends in its entry level homes are similar to what it sees across the board. Flooring is the number one feature that customers upgrade, even at the entry level. And when these customers upgrade, they want hard surface flooring: hardwood, wood-look vinyl and ceramic tile. Pulte customers are making the switch to hard surfaces for several reasons: because they believe that hard surfaces are better for allergy sufferers than soft surfaces; because they believe that they are cleaner than soft surfaces; and because they are simply more desirable design wise.
But there are additional factors promoting hard surfaces as well. First of all, wood-look products like vinyl and laminate have improved steadily through the years, so now customers can get a beautiful wood-look floor that is realistic, durable and affordable. Additionally, with today’s open floor plans, it seems logical to extend one floorcovering through all the living areas of the first floor. And often, Pulte’s buyers continue with hard surface through the master suite, using carpet only in the additional bedrooms.
Great rooms are popular among Pulte’s customers, and the company believes that the trend has accelerated, in part because movable technology like laptops and tablets have made it possible to work anywhere. Today’s homeowners aren’t tied down to a big desktop in a home office; they can work as easily in the comfort of a great room as they can in a designated workspace.
This has also impacted the size of the home. Pulte reminds its customers that they no longer have to account for big entertainment centers to hold giant televisions—today, most people have flat screens installed directly on the wall—so great rooms and master suites don’t need to be as large as they once did.
Engineered hardwood and wood-look vinyl and laminate options are gaining acceptance among Pulte’s customers. In general, they are favoring wider planks (up to 6”) and are often choosing handscraped looks now that those are available at lower price points. Colors run the gamut, from taupe to charcoals to espresso. Pulte reports that some of its customers are choosing bamboo, now that the product is more readily available and the looks are varying due to new treatments.
Though ceramic tile is often slightly out of financial reach for the entry level customer, Pulte reports that when it is chosen as an upgrade, the larger formats and more realistic stone looks are winning out.
CASE STUDY: HIGH END SPEC BUILT SINGLE FAMILY HOMES
Toll Brothers builds spec homes for the luxury market. Currently, the company builds in 19 states, and the average price for a Toll Brothers’ home is $570,000 nationally.
Because Toll Brothers serves an age-restricted market—customers who are financially mature and, therefore, often mature in age, generally making their fourth or fifth home purchase—the company’s homes have a specific footprint by nature: the first floor generally contains all the living space as well as the two main bedrooms, and the second floor houses the guest bedrooms. Nationally, the average Toll Brothers home has square footage in the mid 3,000s.
Flooring is the most upgraded item in a Toll Brothers home. In fact, only 35% of customers choose the company’s standard offering. Many Toll Brothers customers often upgrade the hardwood from the standard oak to either maple or hickory.
Across all the markets it serves, Toll Brothers is seeing a preference for hard surface flooring and darker interior tones. The company notes an increasing demand for handscraped looks among its customers, as well as wider format boards. In solid hardwood, 33/4” to 4” widths are favored, and in engineered hardwood boards often go even wider. Medium browns to near blacks are the preferred tones. The company installs almost no natural tone woods.
Toll Brothers reports that it is seeing some significant trends in the Florida and Northeast markets. In the hot climate of Florida, cool tile has always been the top choice for the first floor and living spaces, and it continues to dominate in these areas, especially in larger formats (18”x18” and larger). Frequently, however, Floridians are choosing to upgrade from ceramic tile to natural stone in their living spaces. On the second floor, things are changing more significantly. Tile and carpet, which once dominated these areas, are being replaced by engineered wood.
In the Northeast, hardwood dominates, quite a change from the past when carpet was the flooring of choice in this colder region. Soft surface flooring is now generally restricted to the bedrooms, and tile is used in the bathrooms.
Toll Brothers has considered using the newer laminate and vinyl products, but there is still the perception among its upper end buyers that these flooring types aren’t high quality. Occasionally, a customer with large dogs will choose one of these products for its performance attributes.;
On average, the build cycle for a Toll Brothers home is nine months, and flooring is chosen within the first 60 to 90 days from the agreement of sale. The company reports that the number one priority of its customers is style; they want to make their home as beautiful as they can with the budget that they have, and they feel that flooring upgrades go a long way toward achieving that.;
CASE STUDY: CUSTOM BUILT SINGLE FAMILY HOMES
Sandlin Custom Homes of Dallas/Fort Worth is a second-generation family business that builds both custom and spec homes. The custom homes range from $400,000 to $1,000,000. The company divides its spec homes into three market segments: cornerstone ($180,000 to $199,000), heritage ($200,000 to $300,000), and signature homes ($300,000 to $500,000). The spec homes range from $56.00 to $112.00 per square foot.
Sandlin is seeing activity in the regions in which it works—particularly in the $200,000 to $300,000 price range—because the low interest rates are incentivizing people to buy. It is also seeing an uptick in the $325,000 to $450,000 range. The company notes a decrease in sales in the first time buyer market now that the first time homebuyer tax credits have expired.
Within Sandlin’s market, the footprints of homes have been decreasing since 2009. The McMansions of the 1990s are being replaced with smaller, more efficient versions of the same homes. Sandlin’s customers aren’t seeking a lesser quality home—they want high quality custom details—just a smaller home. One of the ways that customers are achieving that goal is by creating multi-use rooms or flex space, for instance, great rooms that also function as media rooms or offices.
As with the multi-family and spec home markets, Sandlin’s customers are choosing hard surfaces over soft. Sandlin says that only 50% of its customers use soft surface products in their bedrooms. The company says that its customers are making this choice based, first and foremost, on their perception that a hard surface is more durable. In addition, carpet is often believed to hold allergens and to be less clean than hard surface flooring, which is influential in Sandlin’s customer’s decisions.
On the hard surface side, hardwood is the material of choice, and the use of engineered hardwood is on the rise. In fact, over 40% of clients choose engineered wood for their kitchen. Clients like engineered wood because the product that is installed is more consistent with the product that they choose in the design center—there is not as much variation in color and design as there is with solid hardwood. When customers do choose solid wood, they always choose a handscraped style, and most of the engineered wood that the company installs is in character looks as well. The most common hardwood choice overall is a dark stained 5” plank.
Some of Sandlin’s clients choose ceramic tile for living spaces because it is more durable than carpet and because, when cleaning is factored in, hard surface flooring becomes a more attractive value proposition. They also like the fact that ceramic tile can be used to create customized patterns and styles. Overall, flooring colors remain on the neutral to dark side for hard surfaces.
When soft surface flooring is desired, fluffy, soft carpet with a longer fiber is the top choice among Sandlin’s clients, and frieze is the top seller.;
Schumacher Homes, a family run business, builds homes that range from 800 square feet to 8,000 square feet with prices from the high $50,000s to over $1,000,000. Schumacher offers house plans that customers can use and customize, but it also builds wholly custom homes.
Schumacher has a unique perspective on the market, since it builds at such a broad range of price points. Like Pulte, the company says that it sees the same trends at the low and high ends of the market. Schumacher’s customers see flooring as a good place to invest, so, even at the lower end, they want to upgrade to hard surfaces.
Schumacher, which builds in 14 states, has been offering plans with less square footage to accommodate buyers who seek efficiency, but so far it hasn’t seen a trend in that direction. It does, however, see a trend toward buyers wanting square footage that makes more sense—eschewing formal living and dining areas in favor of space that they will use on a daily basis. They are looking for casual, more comfortable shared space. For instance, Schumacher often builds great rooms with an adjoining office nook that can be closed off from the living area. While parents are cooking dinner, kids can do their homework in the office space within earshot of mom and dad, and, when the office isn’t in use, it can be closed off from the rest of the room, which is a bonus since office spaces generally aren’t attractive (or tidy).
In addition, the company says that homes are being built to accommodate multi-generational living with, for instance, dual master suites and multiple entrances. More adult children are moving back in with their parents and older parents are cohabitating with their children as a result of the challenges of the economy, and homes are reflecting these new arrangements.;
Schumacher’s customers are using more wood in their homes. Distressed and handscraped looks are popular, in part because they complement that casual living style that is trending. Mid-range to dark colors are preferred in hard surfaces. When customers are building a home with Schumacher, they make all their choices—from flooring to shingles to countertops—up front, before construction begins.
Schumacher customers often still choose to install carpeting in the bedrooms. While colors are still neutral on these surfaces, they are often selecting carpet with pattern and texture or a multi-tonal look.
Schumacher’s customers value durability in their flooring above all else, since flooring takes so much use and abuse. But the company believes that its customers see flooring as more of a fashion element than they ever have before. The company regularly tells its customers that flooring is a major element in creating a look in a home.