From the developer ’ s perspective , the units capture higher rents per square foot , almost 50 percent more . With land costs skyrocketing in markets like New York , Los Angeles , and the San Francisco Bay area , it has become cost prohibitive for developers to build multifamily rental projects . Building micro-units , especially when combined with 80 / 20 tax credits and EB-5 funds , are one way developers can justify building multifamily rental projects , instead of multi-million dollar condos . Micro-unit projects are a win-win concept for tenants and developers alike .
Simon Baron is one developer who has embraced the trend , realizing the potential of building micro-unit multifamily projects . The firm is currently developing a micro-unit concept in downtown Los Angeles . Simon Baron previously built their own micro-unit project in the Upper West side of Manhattan called the AMSTRDM . Simon Baron fully leased the AMSTRDM and decided to partner with Ollie™ on their new Los Angeles development . The project that was once the historic Cecil Hotel has had a cult following and has been featured on the television show American Horror Story . It is a 600-room historic hotel that was constructed in the 1920s . Simon Baron is redeveloping the property into 299 hotel rooms and 301 micro units . Los Angeles , like New York City , is a market where high rents have made apartments unaffordable for many young professionals .
The new Ollie™ location , which is within walking distance from LA Live and a new wave of redevelopment projects in downtown Los Angeles , is anticipated to hit the market starting at $ 1,350 per month — notable for a neighborhood where studio apartments with far less amenities typically rent for $ 2,000 per month or more .
Increasingly , millennials are choosing to live in urban areas and in locales that have comprehensive lifestyle options , as opposed to moving to the suburbs like prior generations . For renters who work in downtown Los Angeles and hope to avoid rush hour traffic , these kinds of units eliminate hours of drive time , something typically unheard of in Los Angeles . Young professionals working in the downtown area can live in these units and walk to work . Millennials are also more likely to use car services like Uber and Lyft and may not need to rely on a car for their primary means of transportation .
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EB5 INVESTORS MAGAZINE