Multifamily Development Strategy

The needs of residents within the greater Los Angeles market are ever changing.  Whether those changes are life stage changes or even technology shifts, developers should consider developing products that can accommodate a wide variety of prospective tenants.  For Jannone Development we have embraced the demands of tenants through an approach that takes into consideration neighborhoods with continued growth potential as well as developing products that allow for tenants at varying life stages.

Neighborhoods with Strong Growth

As a mature region, Los Angeles county has some neighborhoods that don’t lend themselves to new multifamily developments.  At Jannone Development we identify and build in neighborhoods where there is strong growth forecasted over the next 10+ years.  Looking at longer horizons allows us to select the right projects, deliver strong returns to our investors, and offer products that are attractive to institutional investors.

In order to enter into a given market we have developed models that take into consideration a number of factors to ensure we can match vision with performance.  We invite you to examine a few of the components below that we analyze as we develop in a given market.

• New Developments in Pipeline – A healthy pipeline of developments across a wide variety of developers is healthy for a market.  We believe in developing new multifamily housing where there are other developers building a variety of products from mixed-use developments, office, and even other multifamily.  The number of developments in an area, combined with absorption rate and other key factors all contribute to how we evaluate neighborhoods for development.
• Price Per Sq Ft –  For multifamily development a key component for the end value is the lease per sq ft metric.  We evaluate the lease per sq ft from a historical perspective, today’s rates, as well as what the projected growth for a given neighborhood/region.  When values for the lease per sq ft align for strong growth, even given a variety of economic factors, we know it is a market that can support our development goals.
• Civic Projects – Where a city is investing 10’s of millions or even billions in infrastructure then there is an opportunity to align the right multifamily product with the city’s investment.  Cities such as Los Angeles and Long Beach have been investing heavily in infrastructure from mass transit and more which gives us confidence to invest in those markets as well.

High Demand Rental Markets

In each given submarket throughout LA County there are varying levels of demand for rentals.  To ensure our projects deliver the forecasted value we identify high demand rental markets with factors such as:

• Net Absorption Rate – How many square feet are developed and leased vs. the square footage that is no longer leased.  We identify submarkets where the net absorption rate is high which allows us to develop in the strongest markets. 
• Vacancy Factor – Multifamily yields can achieve their maximum potential when vacancy is at its lowest.  High demand markets traditionally have <5% vacancy. 
• Product Variety – A market that has long term growth will provide opportunity for its residents to remain in the area as they hit different life stages.  For example someone starting fresh out of college may desire a micro-unit, and then as time progresses graduate to a larger 2 or 3 bedroom property.  We identify high demand rental markets where we can help residents remain throughout their different life stages by identifying if there is demand across the different product types.

Ready to Issue Plans

Bringing new developments to market is a multiyear process and that can make it difficult to provide the returns to our investors.  To minimize the development life cycle Jannone Development selects what is commonly known as “RTI” (Ready to Issue) projects.  By carefully evaluating RTI projects we can quickly identify which projects align with our model, are truly shovel ready, and reduce development time by years when you compare it to starting without plans.

While many developers avoid RTI projects because they don’t want to build someone else’s concept, Jannone Development, has developed methods of integrating our vision with existing plans to create a truly unique product.  Integrating our necessary elements combined with effective budget management allows us to be competitive in bringing projects to market that are distinct while still providing a strong return to our investors.

Active Projects