Subtext, a St. Louis-based vertically integrated developer of multifamily and student housing, focuses on markets where it sees a runway for growth. The firm has completed projects to date in 10 states, housing over 7,000 residents. MFE caught up with partner and chief operating officer Marina Malomud about what’s in the development pipeline.

MFE: What sets Subtext apart in the student and multifamily housing industries?

Malomud: We’re building thoughtfully designed buildings in the most coveted locations, and we do it by leveraging data—both to identify the best locations and the programming our tenants want.

We use a wide range of metrics that encompass not only conventional variables like population growth and income, but also factors such as educational attainment and projected growth in targeted employment sectors.

Once we decide to pursue a new market, we dive deep to identify neighborhood growth patterns influenced by demographics, employment trends, and consumer preferences. This approach yields statistically significant and forward-looking insights into the trajectory and value of a given location. But it’s not just about site selection, it’s also about using the power of data and psychographic segmentation to analyze consumer habits and lifestyle choices. We conduct this analysis based on extensive consumer spending data to identify the programming and amenities that are most important and impactful for our residents, such as an in-building coffee shop for the ‘laptop and lattes’ crowd, yoga classes, a meditation room, etc.

MFE: Tell me about Subtext’s development pipeline.

Malomud: We are actively pursuing new sites and developments in cities and on campuses that meet our criteria throughout the United States. We currently have five projects under construction, representing 1,012 units in five states.

On the multifamily side, these criteria include projected Gen Z and millennial population growth, and strong labor growth in industries such as health care, technology, and professional services.

On the student side, we develop at Power 5 conference and Carnegie R1 universities with strong supply and demand fundamentals, rent growth, and limited projected pipeline.

Validating our data-driven approach, the markets we are pursuing for first-time and repeat projects have seen substantial rent growth over the past few years.

MFE: What developments are you starting construction on this summer?

Malomud: Below is a roundup of projects where we are starting construction this summer:

  • LOCAL Tampa is an eight-story mixed-use multifamily community located on Kennedy Boulevard in the vibrant North Hyde Park community in Tampa, Florida. The project features ground-floor retail, a curated coffee bar, a state-of-the-art fitness center, expansive co-working and entertainment spaces, and multiple outdoor sundecks with a resort-style pool and hot tub.
  • LOCAL Phoenix is a sixth-story mixed-use multifamily community located at Osborn Road and 4th Avenue in Midtown Phoenix. State-of-the-art amenity spaces total almost 15,000 square feet and include an active lobby with a curated coffee bar, accessible and dynamic fitness, expansive co-working and entertainment spaces, private co-working offices for lease, and a sky lounge with mountain views. The community also includes 30,000 square feet of outdoor amenity space, including a resort-style pool and hot tub, fire pits, grilling stations, covered terraces, green spaces, a sky deck, and a dog run.
  • LOCAL Fairview is a seven-story mixed-use multifamily community with 8,500 square feet of ground-floor restaurant and retail space located along Fairview Avenue in Boise, Idaho. State-of-the-art amenity spaces totaling over 11,000 square feet include an active lobby with a curated coffee bar, accessible and dynamic fitness, expansive co-working and entertainment spaces, and a sky lounge with mountain views. The community features 19,000 square feet of outdoor amenity space, including a resort-style pool and hot tub, fire pits, grilling stations, covered terraces, green spaces, a sky deck, and a dog run.
  • VERVE Ann Arbor is a 12-story student housing community located two blocks from the University of Michigan campus. State-of-the-art amenity spaces feature over 13,500 square feet of space dedicated to fitness, wellness, and study that includes a full-service coffee shop, a two-story fitness center and wellness suite, a self-service micro-market, and expansive open and private study rooms. In addition to the indoor amenities, VERVE Ann Arbor boasts over 14,000 square feet of outdoor amenity space, including a rooftop resort-style pool and hot tub, fire pits, grilling stations, covered terraces, green spaces, a sky deck, and a dog run.

MFE: What is keeping you up at night?

Malomud: The availability and cost of capital is an industrywide concern. That said, our unique development and site selection approach, which focuses on high-growth cities and pedestrian-to-campus locations at core universities, has allowed us to navigate the challenging financing environment.

MFE: How are you navigating today’s development challenges?

Malomud: Our biggest challenges are high construction and capital costs. To manage high construction costs, we adopt a proactive stance by purchasing materials early and exploring alternative procurement methods to secure favorable pricing. Additionally, we have extended timelines on certain projects, allowing construction costs to stabilize. We also place great emphasis on maintaining strong relationships with our capital partners. By engaging in open and regular communication, we can address challenges and work together to find solutions that best serve our development goals.

Entitlements can be a challenge, and we address this by taking a proactive approach to actively engage with neighborhoods and city council members, seeking their input and feedback on our projects. This collaborative approach allows us to understand and address the concerns of the community, making necessary changes to align our developments with their needs and priorities. Our willingness to adapt and adjust based on community feedback has played a significant role in successfully obtaining approvals for our projects.

MFE: What’s your favorite amenity to add into a development?

Malomud: We take a holistic approach to wellness amenities, focusing on our residents’ physical, mental, and emotional well-being. From a physical wellness perspective, we typically have state-of-the-art indoor/outdoor fitness with a group fitness space, as well as sauna and private yoga and meditation rooms.

Personally, one of my favorite amenities is our small group collaboration nooks. These spaces are particularly beneficial for students because they provide a perfect environment for study groups in student housing. Beyond the traditional study areas, we also provide substantial open study space and six to eight private study rooms with smart TVs and white boards. The versatility of these spaces extends beyond academia since they are also utilized in our multifamily housing communities for various activities like book groups and game nights. These collaboration nooks foster social interactions among neighbors, allowing them to connect and form meaningful relationships outside of their individual units. The simplicity of this amenity enhances the sense of community, making our apartment community a true home for our residents.

MFE: What other industry trends are on your radar?

Malomud: One trend we don’t hear talked about a lot is the fact that there is a loneliness epidemic in this country. Despite our constant connectedness in social media, people of all ages and demographics are craving more connection with one another IRL—in the real world. Using our research-based approach to community design, we incorporate features and amenities for many different personality types (aka, introverts, extroverts, and so on) in our developments, so everyone is supported in their style of connecting with their neighbors.