Greystar's Ltd. Med Center in Houston started to welcome residents in April. The 378-unit community has two base floor plans in one- and two-bedroom layouts.
Greystar Greystar's Ltd. Med Center in Houston started to welcome residents in April. The 378-unit community has two base floor plans in one- and two-bedroom layouts.

Utilizing its vertically integrated platform and global expertise, leading multifamily stakeholder Greystar Real Estate Partners is delivering a scalable private-sector solution to meet the nation’s attainable housing needs.

Greystar’s dedicated Ltd. brand will provide an affordable option for missing-middle households, primarily focusing on renters who earn too much to qualify for subsidized housing but not enough to afford the rents of new market-rate apartments.

The company’s impact housing product also will provide a “certainty of housing” for residents with a guarantee that annual rents will not increase by more than the greater of the Consumer Price Index or 3%.

“It’s important for Greystar and the industry,” says Scott Berka, the company’s senior managing director of brand and customer experience. “When you look at housing today, the middle is really underserved. When you look at new developments, high incomes and higher rents are pricing people out like nurses and teachers and paramedics. They can’t afford a lot of the new deliveries coming online. The housing they are left with is aging. We want to bring better housing to those people who drive our country forward.”

Greystar gave Multifamily Executive an early look at how the company plans to meet this challenge, with the first group of Ltd. communities taking shape.

Company founder, chairman, and CEO Bob Faith says there hasn’t been a great private-sector strategy to address this middle-market product in the United States. He adds that many of the ideas behind the Ltd. brand grew out of the company’s global platform.

He points to a large Greystar multifamily community in the Netherlands that provided several aha moments for him. While the Netherlands has a point system that regulates the rents that you can charge for different units, he says the company was able to design and build the community profitably and have rents set below market. With a shortage of housing in the country, the community leased up over a weekend and has a waitlist of 5,000 people, making him realize the huge appetite for a product that isn’t at the highest end as well as how the residents value that security of tenure with regulated rent increases.

In addition, international investors value these income streams because of the stability and the depth of demand for this type of product. The impact housing product type also meets many investors’ environmental, social, and governance targets.

“When there’s an opportunity, the private sector does a good job driving capital. There hasn’t been a scalable way to address this opportunity. That was really the thing I challenged the team to go figure out—to see how to deliver product to that missing middle in a way that makes the same kind of returns that we make anywhere else. Because if we can do that, we have something that can be scalable and can really make an impact on the problem,” Faith says.

Production has started on the first modules for Greystar's 312-unit Ltd. Spring Run in Allegheny County, Pennsylvania. Slated for delivery in 2024, this community will be the first for Modern Living Solutions' recently opened modular factory in Knox, Pennsylvania.
Provided by LS3P Production has started on the first modules for Greystar's 312-unit Ltd. Spring Run in Allegheny County, Pennsylvania. Slated for delivery in 2024, this community will be the first for Modern Living Solutions' recently opened modular factory in Knox, Pennsylvania.

Scaling the Ltd. Brand

To keep rents attainable and to generate the same type of returns for investors as market-rate apartments, Faith says the team identified a multipronged approach—standardized floor plans, modular construction, and a revamped operating model.

“We worked hard on the design to get great floor plans that the residents love and that are super-efficient and cost-effective to be built,” Faith says.

All of the Ltd. branded communities will have standard amenities appropriate for their locations, including pools and fitness centers. In addition, communities and units will include technology packages that feature propertywide high-speed internet, smart locks, package delivery, and resident apps that streamline everything from maintenance requests to guest access. Units also will feature efficient HVAC systems, windows, and water heaters to help deliver a sustainable product that keeps utility costs down for residents.

“We have really taken a standardized approach in terms of units that we’re building to drive the best value through our product that we can for our residents who live with us,” says Andy Mest, managing director of Greystar’s development, construction, and modular manufacturing businesses.

Mest is integral to the modular component, heading up Greystar’s Modern Living Solutions, which is based in Baltimore and just launched its first factory in Knox, Pennsylvania. He was part of Greystar’s first modular development in the United Kingdom in 2015. Since then, the company is on its eighth modular project in the U.K. and Mest moved back to the United States in 2018.

“We have really leveraged Europe to help us jump-start our vision and get this off the ground,” he says.

For Mest, modular construction provides predictability around cost control, quality, and schedule, which also help drive returns.

The Western Pennsylvania factory is ramping up operations and will peak at 140 employees in 2024. The factory, building prefabricated modules, for the Ltd. brand, can ship within a 500-mile radius, with a focus on suburban locations around urban cores where jobs are being created.

Units will be about 95% complete at the off-site factory, being shipped with plumbing, bathroom fixtures, dishwashers, and even microwaves in place. Other appliances susceptible to damage will be handled on-site as well as any last-minute touchups. Some of the additional advantages to modular, says Mest, are enhanced acoustics from a double wall or ceiling when bringing the modules together and reduced jobsite waste.

“Modular dramatically speeds up what we’re doing,” adds Faith. “But we can also do this site-built. In many markets, the savings that we’re getting through the standardized design, and the increase in speed from the design, is able to keep our costs and schedule in place to still work.”

The third component for the Ltd. brand is a change in the traditional staffing model. Instead of six or so people working on-site, the streamlined Ltd. model will be two to three dedicated staff members at the property level; an enhanced focus on customer experience and digital tools, such as virtual and self-guided tours; and a centralized staff off-site who can assist with other tasks.

“People are still very important, we’re just saying most people engage digitally these days, and then staff will help when needed,” says Berka. “We’re flipping the model on its head.”

While the Ltd. communities might not have all the bells and whistles of luxury buildings, Faith says he still sees value for the residents.

“We may not have a concierge, and we won’t have some of those things in a luxury building, but what we are going to have is a great high-quality product at an affordable price with a promise that you can stay in your home with rents that grow at [the greater of] CPI or 3%,” he says.

Ltd. Champions Ridge is bringing 330 units of attainable housing to Davenport, Florida, an Orlando suburb.
Greystar Ltd. Champions Ridge is bringing 330 units of attainable housing to Davenport, Florida, an Orlando suburb.

Work in Progress

Greystar has five Ltd.-branded communities underway in four cities, with approximately 1,600 units expected to come online in the next 18 months. Two of the communities are traditional builds, while the other three communities in the works will be modular.

Leasing has started at the two site-built communities–the 378-unit Ltd. MedCenter in Houston, which is over 70% leased, and the 330-unit Ltd. Champions Ridge, which is over 50% leased, in the Orlando, Florida, suburb of Davenport.

“We were so excited about the brand that we wanted to get a couple of projects up and running before the modular factory came online. They are really meant to be the flagship versions of the Ltd. brand and will help us engage and understand our target audience,” says Berka. “We’re offering a really specific benefit and still delivering on a great product. Lease-up is significantly above what we usually see.”

Residents began moving into the 378-unit Ltd. Med Center, this spring. Located near the Texas Medical Center and NRG Stadium in an area prime for growth, the community features two base floor plans in one- and two-bedroom layouts.

“In Houston and Orlando, the velocity [in leasing] that we’re getting is staggering,” says Faith. “That’s probably one of the things I’m most excited about. It’s still early, but those are exciting results so far.”

Two modular developments are slated for delivery in 2024—the 312-unit Ltd. Spring Run in Pennsylvania’s Allegheny County and the 224-unit Ltd. Chesapeake Club in Maryland’s Cecil County.

Mest says about 35 units already are in production for the Allegheny County garden-style community, which is located 94 miles from the factory. Greystar expects to break ground on the project in May, and the factory will spend the remainder of the year working on the 888 modules needed for it.

End Goals

With the demand for attainable housing supply across the nation, Faith says many different solutions are needed in both the private and public sectors.

“When I started Greystar, I didn’t set out to be the biggest operator of apartments in the U.S., but we did set out to be the best. By focusing on that, the numbers came,” says Faith. “[On attainable housing,] we will go as hard and as fast as we can responsibly go. The opportunity is just that big.”

He adds that there are lessons to be learned and shared—from the launch of the modular factory and the first few developments as well as the feedback from residents, investors, and lenders.

“Utilizing our knowledge, our global platform, and our competitive spirit, this is our unique way to address it,” Faith says. “We’re not going to solve the problem singlehandedly. Can we make a dent? Absolutely.”

Berka adds that he is hopeful Greystar’s efforts will be the start of “something that fundamentally changes housing in this country.”

“While that sounds wildly aspirational, that’s exactly what it is. That is all of our hope. We have a groundswell of excitement about what we’re doing at Greystar across these teams, and we’re at the precipice of getting that excitement outside of Greystar,” he says. “Hopefully five years from now, we can say this is the model where we can show what home means for the average American.”