During the COVID-19 pandemic, many workers around the world left crowded metropolitan areas as companies adopted remote or hybrid working models to discourage the spread of the disease.
What started as a decision motivated by health has now become an economic consideration as the flexible working arrangements have provided families and individuals greater freedom to choose where they live, with many opting to relocate to more affordable areas further away from city centers.
This shift is at the heart of Harbor Custom Development Inc. (NASDAQ:HCDI)’s business model as the company works to address the country's housing supply shortage through the development of multi-family projects located a short commute from urban cores.
READ: Harbor Custom Development lists six Western Washington apartment projects totaling 734 units for a combined value of $278M with Kidder Mathews
The company recently listed six multi-family projects in the Puget Sound region of western Washington, comprising 734 units totaling $278 million.
Harbor CEO Sterling Griffin told Proactive in a recent interview that the six projects under construction were listed to help the investment community gain a better understanding of the company's asset base and its potential to meet the growing demand for multi-family real estate.
“This is just the start for us. We have 600-plus units behind them,” Griffin said.
He added that rising rental rates, combined with low capitalization rates, created significant value for multi-family and other income properties in western Washington.
Griffin highlighted how the country’s housing shortage - which started over a decade ago with the 2008 financial crisis and exacerbated by the COVID-19 pandemic - and the surge in housing prices drove demand for multi-family properties as families and individuals opt for apartments over other property segments.
“It’s an almost once-in-a-lifetime opportunity in this sector,” he said. “You have this great opportunity for companies like us that understand the multi-family market and are able to execute quickly.”
'An economic decision'
Harbor’s business model is to build multi-family properties that are a 20-to-60-minute commute from urban job corridors.
Griffin said the company’s business model synced well with the impact of the pandemic, which has driven people to areas outside of urban cores as more employees take up the option to work from home.
“What started as a flight from cities, fleeing the virus, has become an economic decision. Why live in downtown Seattle or any other major city and pay 20% to 25% more in rent if you can work from home?” Griffin said.
In addition to its real estate developments in western Washington, Harbor is also focused on projects in no income tax states such as Texas, Florida, and Tennessee which are seeing a significant influx of businesses and individuals looking for opportunities under a different tax structure.
“They are the fastest-growing states in the country by far. That’s where we want to be,” Griffin said.
Harbor Custom Development is a real estate development company involved in all aspects of the land development cycle for various residential projects in western Washington’s Puget Sound region; Sacramento, California; Austin, Texas, and Punta Gorda, Florida.
Contact Emily at emily.jarvie@proactiveinvestors.com
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