a Young Urban Community_sm

A Young Urban Community_sm is American’s concept. The Glendale Project will be the first Young Urban Community. 

With 500,000 to 600,000 births in California for the last 20 years, the State is assured of a continue flow of young tenants into the bottom of the market each year. The number of singles in this young market has grown from 67% in 1990 to 81% currently, which prolongs the courtship period for this generation.

Given city requirements and high land prices in desirable infill urban locations, and with the 2007 debt equity ratio of 90/10 it was very difficult to provide one bedroom apartments with rents much less than $2,000 a month and projects with average rents much below $2,400 a month (assuming a near even split of one and two bedroom units). With even the best current debt equity ratio of (60/40) one bedroom rents need to be well above $2,000 a month. 

Even those in the top 30% of the income bracket of this young adult market (those with incomes between $50,000 and $75,000) can’t afford these rents without roommating, which two thirds of this group find a compromising lifestyle.

Sixty two percent of the respondents of our national survey of young adults stated that they would rather live in a studio they could afford on their own and would be willing to pay $50 to $300 a month more to do so (our data did not distinguish whether the one third that indicated they would rather roommate were responding to the survey with wisdom gained from roommating experience). As a whole, the industry has ignored this reality and continued to produce apartment projects with one and two bedroom configurations.

Another fact that most apartment developers have overlooked is that studios rent quicker and turnover at the same rate or less frequently than one and two bedroom units.

American first discovered this while conducting an Orange County Survey of existing apartment projects. This was again confirmed while performing a national market survey for studios in urban amenity rich locations (see the Market Survey Section of this Offering).

American’s concept for Young Urban Communities is further rooted in the realization that a large portion of this market does not want to waste time commuting from suburban communities and wants to live in areas with concentrations of other young adults where they could easily connect. These concentrations occur in areas with a high number of shops, restaurants, and entertainment opportunities, areas where these young adults and others in their generation currently play.

Meeting the demand for young urban professional housing in these high priced areas with a product that meets the expectations and budgets of this group requires small units in high density, in architecturally distinguished projects, like the Broadway Lofts Project in Downtown Glendale.

Older, rundown, downtown areas have single room occupancy hotels and rundown apartment projects with rents the target market can afford. However, these projects are unattractive to young urban professionals because of their tenant profiles, the immediate surroundings of most of these projects, their condition, and their general lack of ambiance. Particularly, the top 30% wage earners in this market segment have upper middle income parents and their expectations of ambiance, levels of finish, and location can not be met with these under-maintained projects.

Project Summary

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