March-April 2022 | Home & Garden

The wave of luxury apartment buildings

Why some millennials and empty-nesters are driving the demand for apartments with hotel-style services and amenities

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Victor Hernandez and his wife, Maria, at the sky bridge at The Elm, a luxury apartment building in Bethesda. Photo by Michael Ventura

On his daily walks through downtown Bethesda, Victor Hernandez routinely passed the construction site of a major residential project on Wisconsin Avenue. He watched it go from a hole in the ground to a pair of high-rise luxury apartment buildings called The Elm. He never thought that one day he would call one of the buildings home.

The 37-year-old New Orleans native had for three years been renting an English basement apartment in a nearby house. When COVID-19 hit, he craved a sense of connection and started to look for a different type of living situation. “I work remotely, and I really needed a community and a place where I could see people on a regular basis,” he says. He considered properties in Washington, D.C., and Arlington before deciding to check out The Elm, and he moved into an 860-square-foot, one-bedroom unit there in the spring of 2021.

In recent years it seems as if luxury apartment buildings are cropping up on every block in the Bethesda area. Ten residential projects have been built in the last decade, and four luxury apartment buildings opened in 2021 alone in downtown Bethesda—The Elm, with 456 units; Maizon, a 229-unit structure on Moorland Lane; The Edge on Edgemoor Lane with 154 units; and 8001 Woodmont on Woodmont Avenue with 322 units.

The rooftop terrace at The Elm. Inviting outdoor spaces are featured at many of the area’s new luxury apartment complexes. Photo by Jeffrey Sauers, CPI Productions

“During the pandemic, we thought we’d see growth stop, but that’s not been the case,” says Robert Kronenberg, deputy director for Montgomery Planning. “Development has continued across the county in places like Bethesda, Silver Spring and the Pike District.”

Developers are building luxury rental properties near transit hubs and within walking distance of retail establishments and restaurants, and outfitting them with high-end amenities to satisfy consumer demand. More residential projects are planned over the next 10 to 15 years, including 1,100 new units in Bethesda’s soon-to-be-revamped Battery Lane District and 2,000 at Rose Village (at Executive Boulevard and Montrose Parkway), part of a mixed-use development in North Bethesda’s Pike District.

Montgomery County’s urban centers and mixed-used developments are attracting renters who want the ease of in-town living with easy access to the Beltway and Metro, and a wide array of restaurants. Downtown Bethesda is thriving, in part thanks to a Montgomery County Nighttime Economy Task Force that was formed in 2013 and suggested ways to improve nightlife options in the county’s urban areas. That work led to legislation making it easier for restaurants and entertainment-oriented businesses to succeed. The Bethesda Urban Partnership has also made concerted efforts to create an appealing urban center. “Ten years ago we started talking about how to attract millennials,” says Stephanie Coppula, BUP’s director of marketing and communications. BUP improved streetscapes, advocated for more bike lanes and dog parks, and sponsored family-friendly events, live music, and “yappy hours” for pet owners.

Opened in 2021, the luxury apartment tower 8001 Woodmont features 322 units. Photo courtesy of JBG Smith

When a desirable community is created, people will pay more to live near the center of the action. At The Edge, a two-bedroom, 1,328-square-foot corner apartment goes for $4,675 a month, and you’ll pay as much as $5,485 for a two-bedroom, two-bath unit with a den. A three-bedroom, three-bath, 1,874-square-foot apartment at Maizon rents for $8,440 a month. And at The Elm, a 1,330-square-foot apartment with two bedrooms, two baths and a den rents for $6,165 a month. But even at those prices, demand appears to be high.

“There has been a lot of interest, which is surprising when there is so much competition,” says Juliana Thomas, a regional vice president with the Bozzuto Group, which manages The Elm. Hernandez moved there in March 2021, a month after it opened, and received two rent-free months, which was an incentive for him to sign a 15-month lease, instead of a 12-month commitment.

From mid-2020 to mid-2021, the apartment market in the D.C. metro area took a hit in terms of the percentage of vacancies and rental prices. But according to third-quarter data in 2021 from the D.C.-based National Multifamily Housing Council, the market is rebounding. The data shows that prices for studio and one-bedroom units haven’t returned to pre-pandemic levels, but that prices for two- and three-bedroom apartments have recovered. “There’s been a shift in preferences toward larger units,” says Christopher Bruen, senior director of research at NMHC. “The conventional wisdom is that it’s because of COVID and the need for home offices.”

In response, developers plan to offer a more diverse array of floor plans in future luxury apartment buildings. “There’s a lot of money, effort and creativity being put into the types of proposed units,” says Kronenberg. “We’re seeing a lot of families with children in Bethesda’s downtown market, and these larger units may be a transitional approach to a single-family home.”

Photo courtesy of JBG Smith

Millennials and empty nesters are driving the demand for luxury apartments. “We’ve studied how different generations transitioned from renters to owners, and every generation takes a little bit longer to do so,” Bruen says. U.S. Census Bureau data shows that people are marrying later, which is the best predictor of homeownership. As millennials age, the need for single-family homes will increase, but many of them are content to remain renters for now.

“Clearly, we are seeing a younger crowd coming into these buildings,” Kronenberg says. At 70 million strong, millennials are the largest generational group in the U.S. This diverse cohort, ages 26 to 41, is in various stages of life and habitation. Some are young and single with jobs and relationships in transition, and the older ones are established in careers, getting married and starting families. “There are a lot of young people coming into the housing market for the first time, and they haven’t built up equity,” says Jane Fairweather, a real estate agent with Long & Foster.

“Millennials are waiting [to purchase a home] because they’ve been priced out of the market in the last 18 months.”

Millennials often are unwilling to engage in bidding wars for homes. “Single-family homes, especially in neighborhoods with good schools, are in short supply and people are overpaying substantially,” Fairweather says.

Many millennials are willing to rent until the market corrects. “The market is crazy right now,” says Hernandez, who got married last November and plans to save for a couple of years before buying. In the meantime, he and his wife are enjoying their rental lifestyle. “This has been one of my best housing decisions,” he says.

PerSei, at Pike & Rose, features a pool and 174 units. Photo courtesy of PerSei at Pike & Rose

Allison Slavin isn’t ready to settle down, either. Last July she moved to PerSei, a 174-unit building at Pike & Rose in North Bethesda. The single 35-year-old was born and raised in North Bethesda and has lived in several rental buildings in the area since returning from college. Her job in human resources is based in McLean, but she can work remotely.

Slavin pays $2,100 a month for a 1,000-square-foot, one-bedroom unit with a balcony overlooking the pool. She pays an extra $125 a month for parking, although she rarely uses her car. “It’s right under the building; I take an elevator up to my floor and I feel very safe,” she says. If she goes into the District to a show or a restaurant, she takes an Uber or catches the Metro at the White Flint station (soon to be called North Bethesda).

Slavin says she has considered homeownership and had been watching the market for several years. “I don’t want a condo, I want a house, and I don’t want roommates,” she says. “I travel a lot, and this is a good home base. I will buy something when I am more settled, but for right now I am free.”

Photo courtesy of PerSei at Pike & Rose

Many of the empty nesters who are moving into luxury apartment buildings sold their homes to take advantage of the hot single-family home market and are biding their time until they decide on their next move. “The very-high-end units, which lease for $5,000 to $7,000 a month, are generally going to people who have sold their suburban homes but still have ties to the area and don’t want to move away completely,” Fairweather says. “It’s a volatile time to throw yourself into a purchase, and they don’t want to commit to owning anything else right now.”

Marcus Lai, an executive with developer JBG Smith, says about a third of residents at 8001 Woodmont are over 50. Many have sold houses recently, while others “have homes elsewhere and a place here to be close to their grandchildren,” he says.

Finding quarters to fit two people running a consulting business from home full time was a priority for Renee and Mark Wiskup. The couple, whose primary residence is in Tampa, Florida, wanted to set up a second household in Bethesda to be near their daughter, her husband and their new baby, who live in the District.

At first, they opted for a small apartment complex, and thought that a two- bedroom, two-bath unit would be enough. “It was too small, and we were on top of each other,” Renee says. Mark does much of his work on Zoom, so they needed two offices. Their new home away from home is a 1,400-square-foot, three-bedroom, 2½-bath penthouse on the 25th floor of The Elm. The apartment has an open floor plan, big windows and a view of the Washington Monument and the U.S. Capitol.

Hernandez moved into The Elm in the spring of 2021 and proposed there to his now-wife, Maria. Photo by Michael Ventura

High rents come with expectations of perks, and luxury apartment buildings are offering big amenity packages to meet consumer demand. “At this price point, it’s definitely a ‘higher touch’ customer,” says Thomas of the Bozzuto Group.

Personalized hotel-style services such as 24-hour concierges and emergency maintenance are standard. “I put in a maintenance request, and they come fix it and leave; it’s joyful,” Slavin says. With deliveries to residences at an all-time high, package control has become an issue, and many buildings provide storage areas for large items, individual lockers, cold storage for groceries, and dedicated areas where carryout food can be dropped off. The Elm uses Luxer One, a package management system that alerts residents with an email and access code when something arrives and has been placed in their locker.

Many millennials strive for a work/life balance, so developers are responding with amenities that focus on health and wellness. There are large state-of-the-art fitness centers with treadmills, Pelotons, dedicated spin rooms and yoga studios, and on-demand exercise classes. Bicycle storage rooms are popular, including space to maintain residents’ bikes, as are amenities that cater to pets. The Lindley, in Chevy Chase, offers a pet play area and an on-site dog-washing station.

With so many people reporting feelings of isolation as a result of COVID-19, the social aspect of life in these buildings is more important than ever. “The pandemic reinforced the desire to be together and increased demand for small group gathering areas,” says Caren Garfield, vice president of multifamily development at EYA, a Bethesda-based developer of mixed-use communities across the D.C. region. Lounges, libraries, billiard rooms, and management-sponsored get-togethers such as holiday parties and wine tastings provide opportunities for residents to meet.

“There are lots of events for young professionals” at PerSei and in Pike & Rose in general, Slavin says. “There’s a good vibe and it’s very social.”

High-quality outdoor space is another must-have at a luxury building. “We’re incorporating courtyards, roof decks, pools, any place that gives people access to light and air,” Garfield says. Residents can mingle, entertain friends, or have a staycation experience with rooftop infinity pools and cabanas, and decks outfitted with tables, chairs, hammocks, grills and firepits.

With a community garden and a saltwater pool, there is a special focus on sustainability at The Pearl in downtown Silver Spring. To appeal to eco-conscious tenants, 8001 Woodmont offers eight Blink electrical vehicle charging stations in the garage. “People want these, and we have the flexibility to install more if the demand increases,” Lai says.

Hernandez and his wife are making friends and memories at The Elm, and he even proposed to her on the building’s 17th-floor terrace. It was a balmy evening with a gentle breeze, branzino on the grill, and soft music and lighting for the perfect ambience. Hernandez enlisted General Manager Kristin Fitzgerald to take photos of his girlfriend’s expression when he popped the question. “I could have gone to a restaurant, but I decided to propose here,” he says. “It’s a beautiful location and the place where we are going to start our life together.”


Rendering of 8787 Georgia Avenue. Photo courtesy of KTGY Architects

Upcoming luxury apartment projects

The Claude at Chevy Chase Lake

  • Part of a mixed-use community from Bozzuto Development with a 1-acre park, retail, restaurants and Ritz-Carlton condominiums.
  • An 11-story building with 186 units (studios to three bedrooms).
  • The building is expected to open in 2023.

Harwood Flats

  • Developed by Foulger-Pratt at 5454 Nicholson Lane in North Bethesda.
  • Phase one is a six-story, 335-unit apartment building with 4,500 square feet of retail space on 5 acres.
  • It will feature one-, two- and three-bedroom units.
  • The anticipated completion date is early 2022.

8787 Georgia Avenue

  • This mixed-use project from Bozzuto is on the former site of the Maryland-National Capital Park and Planning Commission in Silver Spring.
  • The residential component will include two six- and seven-story buildings with 360 apartments, several townhomes and retail space anchored by MOM’s Organic Market.
  • The anticipated completion date is fall 2023.

Solaire

  • The 22-story residential building will be constructed at 7607 Old Georgetown Road in Bethesda.
  • The developer is Washington Property Co.
  • 198 apartments and 1,500 square feet of retail are planned.
  • The expected completion date is 2023.

Carolyn Weber lives in Silver Spring and frequently writes about architecture and home design.