3-2-1: Three Innovative Real Estate Companies, Solutioning 501 Main's Final Floor Plans, Kitchen Layouts, & More
Week #18
Happy Monday —
Here are 3 things from others, 2 things from me, and 1 picture related to incremental real estate development.
Enjoy!
3 THINGS FROM OTHERS
Today’s 3 Things From Others are three companies I discovered recently that are shaking things up in the incremental real estate development world.
I. RNDSQR
The first is RNDSQR (“round square”), a design-centric real estate developer in Calgary, Alberta (Canada).
“RNDSQR builds up inner-cities through thoughtful placemaking. We build more than simply four walls; we use design as a tool to promote collision points and opportunities for collaboration.”
What I love:
The designs of their projects are impeccable, from the contrasts in materiality to the sizing of windows and shapes of the roof line. Just take a look at this 4-plex they completed in 2018.
Their dedication to customer experience is straight out of the big tech playbook, something that is often overlooked in real estate development. Resident touch points are meticulously choreographed as the building comes to life: online bookings for walkthroughs, the connection to the community, and their customer service have residents clamoring for more.
II. OBY House
Next up—OBY House, a California-based developer of Accessory Dwelling Units (ADUs).
Own a house with a backyard? OBY will sign a 99-year lease for the space, build a 575 SF ADU, rent it out, and split the proceeds with you. Up to $500/mo.
What I love:
They’re a cooperative. Meaning employees and community members are able to participate in ownership and profit sharing.
They’re hyper-focused on ADUs. In many US cities, 75% of the land is zoned for single-family homes. Of the 138M homes nationwide, only 1.4% of them have ADUs. That’s a staggering opportunity from both a business and housing activist perspective.
Their ADUs are standardized (not custom). This allows for repeatable, modular construction offsite, helping drive cost down for the end user.
OBY even partners with a cooperative general contracting company to handle the end-to-end construction and installation of the ADUs.
OBY House reminds me of another west-coast ADU developer: Dweller. A similar concept without the cooperative structure.
III. CoEverything
Last, but not least—CoEverything.
Founded by the same entrepreneur behind OBY House, CoEverything supports the infusion of the cooperative business model across the real estate industry. They effectively lend their expertise in a consulting capacity to groups looking to establish worker, housing, investment, or consumer co-ops (just to name a few).
What I love:
Their exploration into crowdsourcing small-scale construction. No, not just another Angie’s List: a marketplace that only further commoditizes trade labor. Think Gig Economy + Ikea + prefab construction. A distributed prefabrication model where carpenters could build panels to spec in their garages, driveways, or at home in exchange for payment.
Their commitment to the triple bottom line: people, planet, and prosperity. 3BL is a framework established in the early 1990s that provides a holistic lens for how to conduct for-profit business. I like to think of it as moral capitalism.
Check out their blog for in-depth articles about building a sustainable and affordable future for housing.
2 THINGS FROM ME
I. Solutioning the Final Floor Plans
We’re getting close to finalizing floor plans for 501 Main.
At 1,400 SF per floor, space is tight. We’ve had to get creative with layouts, systems, and appliances. And we’re now at the point in the process where everyone is scrutinizing the plans: architects, engineers (mechanical, structural, fire suppression), electrician, plumber, and HVAC contractor.
Here are some examples of the types of issues we’re collectively working through:
Because we’re building such a tight envelope, mechanical ventilation is needed. Do we go with an Energy Recovery Ventilator (ERV) or a Heat Recovery Ventilator (HRV)? Individual units per apartment or a central ducted system in the basement? Each option has downstream implications for air sealing, moisture control, and framing.
We chose a central HRV system (HRV because we want to expel excess moisture in the winter; central system to minimize number of holes in the outside assembly and reduce maintenance requirements), but that requires ductwork. The 16” x 16” chase originally built into the plans isn’t big enough so where can we capture an additional 12” x 12” of space to run the ducts?
The ground floor plan was so tight it became difficult to accommodate the basement staircase. We opted to go with a bulkhead on the back of the building. This adds scope (concrete work, materials, complexity), but frees up high-value interior space that can be absorbed by one of the apartments.
Vermont building code requires both of the ground floor apartments to comply with the Fair Housing Act for handicap accessibility. The fact that the federal government has a 334 page design manual says it all. Accessible design is not a walk in the park and careful attention must be given to the guidelines upfront to avoid rework later on.
All this optimization of spatial arrangements has made two things clear to me.
Development of small apartments causes brain damage. Each tweak in the design requires intense rationalizing. Every component is interconnected to the extent that even a slight modification in floor plan could have major downstream impacts. Want to move that wall back six inches? Watch out that it doesn’t affect the load transfer from the roof or interfere with plumbing runs or handicap requirements. Numerous stakeholders now need to be consulted each time a change is proposed (engineers, architects, contractors, etc). This is normal for any development, but is more pronounced when size constraints are introduced and there is inherently less flexibility.
Decisions need to be made using a cost-benefit lens. At $2.50/SF/mo in rents, residential space generates 2.5x more revenue than retail ($1.00/SF/mo) in my area. Hallways and common areas generate $0.00/SF/mo. The way the numbers work for 501 Main, we simply cannot afford to keep the entire first floor as retail—there has to be a residential component. But, retail is critical to fostering a great village center so it becomes this careful balance of what ratio is both appropriate and affordable. Every decision needs to tie back to some tangible (i.e. financial) metric that aligns with the goals of the project.
What to take a look at the latest floor plans? Check ‘em out here.
II. PowerPoint and Kitchen Layouts
Another problem now in need of a solution at 501 Main is kitchen layout and appliance selection.
I allotted each apartment roughly 10 feet of kitchen space. Apartment 1 (above) is special, and was generously awarded almost 14 feet. But most of the others clock in at 10’.
Keep in mind we’re working with unit sizes between 350-500 SF. Unfortunately, we lack the luxury of offering anything as decadent as a kitchen island. Instead, we need to scale back appliance sizes and drive efficient usage of space.
Each kitchen will include a clothes washer, a heat pump ventless dryer, an electric range, and a refrigerator. EnergyStar, compact appliances and WaterSense fixtures where applicable. Dishwashers were a nice-to-have but, given the space constraints, they were the first piece of fat to get trimmed.
I struggled initially on how to best communicate my ideas for interior layouts to the kitchen supplier and architects. Small apartments are not as common here as in urban areas, and I was concerned that my proposed 10’ kitchen may be interpreted as the equivalent of a dog cage in a crawl space. I know based on my own apartment experiences that small kitchens can be successful (without any resemblance to a dog cage) but I recognize that I’m not in the majority here.
Enter PowerPoint, my old friend. I continue to be amazed with how flexible of a tool it is. I spent five years in consulting using it to prepare client presentations and thought I would put it to rest—or at least on the back burner—as I pivoted into real estate development. I thoroughly missed the mark there.
PowerPoint not only allowed me to shape my investor and lender pitch deck, but also provided me with a way to update the site and floor plans on the fly, create draft roof assemblies, and now communicate ideas for interior elevations (to scale, by the way). Sure, there are more specialized, professional tools that an architect or interior designer will pay for. But, as a small development shop trying to keep costs down, I don’t need all that. I just need a way to effectively share my vision and direction.
If PowerPoint isn’t in your toolbox, you may want to reconsider.
1 PICTURE
I. Marblehead, MA
Dense & walkable,
A variety of housing types with a mix of apartments, condos and single family homes, and
Mixed uses with plenty of space for locally owned small businesses.
We just don’t build suburbs like we used to…
From: @berkie1
That’s it for today. Thanks for reading. If you haven’t yet, go ahead and subscribe here:
About me: I’m Jonah Richard, a small-scale real estate developer in Vermont. With my company, Village Ventures, I’m currently getting my hands dirty redeveloping mixed-use buildings along Main Street while trying to pick apart and replicate what makes other communities thrive.
Want to learn more about my projects and incremental real estate development? Connect with me on LinkedIn, Instagram, or Twitter.
Two thoughts: a stacked washer dryer in the bathroom is a more user friendly approach-having your dirty and clean clothes in the kitchen is kinda embarrassing, not so much in the bathroom. A shared utility wall would let you run all the power, sewage, supply, heat ducts, in one fat wall.