Exploring Development Strategies in a Shifting Multifamily Landscape

At the recent InterFace Multifamily Southeast Conference panel discussion “How to Find & Entitle Sites, Finance and Execute on Development Opportunities in Today’s Challenging Environment,” industry leaders shared invaluable insights into navigating the complexities of multifamily housing development.

Moderated by Bohler’s Chad Riddle, Branch Manager, the conversation explored topics ranging from equity challenges to site selection and construction trends.

Here is a recap of the key themes, challenges, and trends to look out for in 2025.

Navigating Capital Constraints

Equity remains a significant hurdle for launching new projects. Panelists, including Derek Hutchison of Terwilliger Pappas and Mark Wyzykowski of Related Group, highlighted the importance of waiting for equity availability while leveraging market conditions to secure capital.

Impacts of Interest Rate Changes

Though the 2024 interest rate reductions provided some relief, Andrew Costas of Landmark Properties noted that real movement hinges on transaction activity for stabilized projects. Wyzykowski emphasized the need for developers to convince capital partners of the long-term viability of opportunities.

Adapting Design to Economic Realities

Costas explained that recent economic shifts have pushed developers to rethink project scope. Extraneous amenities are being pared down in favor of essentials, such as appropriately sized units and practical community spaces, to keep rents competitive.

Absorbing Atlanta’s Supply Surge

With over 22,000 units delivered in 2023 and another 34,000 slated for 2024-2025, absorption rates are under pressure in certain submarkets. Hutchison noted that while temporary supply gluts exist, these should normalize by 2025, with suburban markets showing resilience.

Targeting Ideal Sites

Panelists agreed that the most desirable sites are increasingly difficult to find. Ian Hunter of dwell design studio discussed creating prototypes that accommodate hilly terrains to minimize grading costs. Hutchison and Wyzykowski emphasized the potential of redeveloping outdated office sites, despite the trade-offs in demolition and conversion costs.

Shifting Project Funding Dynamics

In 2023 and 2024, phased project funding became the norm, reflecting cautious market sentiment. However, Hunter observed a gradual return to more traditional funding structures, while others, like Matthew McGough, Director of Acquisition and Development for Tynes Development, and Hutchison, noted the continued need for careful pre-development spending management.

Revisiting Dormant Projects

With stabilized construction pricing, developers are revisiting shelved projects. Hunter highlighted three approaches: reactivating designs as-is, modifying them for cost efficiency, or completely reimagining prototypes to fit current conditions.

Looking Ahead

As the multifamily development landscape evolves, success lies in adaptability, creative problem-solving, and collaboration. By aligning projects with market demands, securing strategic partnerships, and proactively communicating with stakeholders, developers can navigate the challenges ahead and seize emerging opportunities.

Ready to thrive in 2025? Connect with Chad.