Welcome back to the UK Build to Rent Q&A series. Last Monday, we shared our first management Q&A with Pierre Melhado. If you’ve missed any of the Q&A’s so far, you can find them all here. This week, we’re returning for our second design focused Q&A. We hope you enjoy the fascinating responses provided by John Badman at CRTKL.
CallisonRTKL (CRTKL), a global architecture, planning and design practice, began over seven decades ago and has evolved into a cultural agency to advance positive outcomes in our local and global communities. Through a human-centric design approach our team addresses the imperatives of resiliency, wellbeing and technology and their influence in the built environment.
About
John Badman has been at the forefront of the Build to Rent (BtR) sector since its UK inception in 2009. Contributing to both editions of the ULI Best Practice BtR Design Guides, he sits across multiple BTR committees and informs the development of lifestyle-led residential investment product.
As a Director of CallisonRTKL (CRTKL), John leads the global architecture and design firm’s residential team across the UK and Europe. Having shaped over 8,000 BtR units across the UK, his commercial acumen and human centric design approach are well documented. As is his ability to bring together cross-sector expertise within the firm to create solutions of increased value.
In addition to his BtR portfolio, John is one of CRTKL’s collective of specialist architects driving new opportunities for retail and commercial assets. The group is advising clients on the diversification of their portfolios and their expansion into the residential market and other sector classes.
Q: What is the most overlooked or under-designed aspect of a BTR development and what can you tell us about why it has such importance?
A: The population of the Build to Rent (BTR) developments during the day is set to increase dramatically in a post-covid world. How and where we work has changed forever in the minds of both employer and our employee. Working from home – or working from anywhere – is no longer a special case, but a given. It is a trend that has been accelerated and accepted through the period of lockdown, and going forward our homes, and our buildings and local neighbourhood will become as important to our working life as our central city offices once were.
This changes the brief for what is needed from Build to Rent and shifts the emphasis from the home just being a place a to sleep, eat, dress, wash and socialise with other building residents, to a product that must also now accommodate a working population of residents.
Co-working spaces, print rooms, stationary cupboards, video call booths on corridors, meeting rooms and collaboration spaces will all become the norm for BTR amenities.
Residents will invite colleagues over the way they do friends, only now the shared amenities they will seek out will be the collaborative open spaces and high-tech meeting rooms rather than gyms or cinemas rooms.
The BTR developments of the future have an opportunity to be curated around not just a social community, but around a generation of home workers who spend considerably more time in their buildings, through choice, than they ever did before.
Q: If you could recommend 1-3 developments for someone to visit that would provide a masterclass in BTR best practice design – which would they be and what makes them so unique?
A: I have been fortunate to visit many BTR developments in the UK and many more multifamily schemes across the US, here are the standouts for me:
In the US, just outside Washington DC is the recently completed Origin at Ballston Quarter in Arlington. Developed and managed by Brookfield, and yes, designed by CallisonRTKL (CRTKL) this property ticks every box. Cross the threshold of the lobby and find fabulous shared spaces that are both easy to navigate and well varied with amenities that facilitate living, working and social activities. Meanwhile, the unit layouts and provisions within the apartments are carefully considered to make living easy across its roof terraces and multiple levels.
Beyond what can be experienced at the surface, it is the masterplan that underpins it all that makes Ballston Quarter a real success. Born out of an old shopping centre, this mixed-use development cut into its retail space and removed its roof to make room for multiple uses that blur seamlessly within the buildings and lobbies that makes the resulting project feel like more than just an apartment block. This place is part of a thriving leisure and retail environment that plays host to a concert one night, and an arts festival the next.
As a resident, the ability to have such a multi-dimensional programme and amenity-rich offering on their doorstep makes these some of the most highly sought after and well tenured apartments in the area.
In the UK, when we are doing tours around best in class developments, I always take people to Vantage Point by Essential Living. It was a front runner in the UK BTR movement, and while it has been open some five years now, it does still stand the test of time.
From its fitness suite, home working facilities, social space, library and top floor dining rooms; to the terraces overlooking London complete with herb gardens and BBQ deck.
The reuse of the existing office block here also gives you a sense of the way the property world is turning with focus on the adaptive re-use of this huge existing structure in north London, far better for the planet and the area’s character than its demolition would have been.
If we take a closer look at the apartments themselves, we can provide further insight on the Essential Living product we were involved in the creation of some eight years ago. The prototype apartments for this went on to be built here at Vantage Point, where three units with different finishes and different layouts were tested by real residents and then improved upon based on their feedback. The efforts are evident with the product continuing to uphold a high-quality development with what to my mind is an extremely forward thinking provision of resident space.
Q: Without mentioning amenity space… What do you think we will see as defining features of a BTR’s unique selling point once the sector has reached further maturity in areas of steep BTR competition?
A: When the competition comes and residents are given a choice, differentiation for BTR will come down to service and convenience.
This will shift the preconceptions of this offering being a luxury product, to it being the norm and a way of life that all renters can enjoy.
The people and the management of a BTR building will become its USP – and we aren’t talking about how smart staff are dressed or whether there is a concierge sitting behind a desk or not.
I have spent a lot of time with Lincoln Property Company both in the US and UK in recent years, developing their first UK development at Station Hill in Reading and one of the key things I’ve seen differentiate them in the US, is their front of house, day to day connection with their resident community. Their property managers are residents of the development themselves, usually found in T-shirt and jeans, sitting on a sofa in the lobby. Discrete but utterly welcoming and extremely enthusiastic, they are Lincoln’s in-house advocates and as proud as them of the building and just as passionate about the community they are curating. That has a big impact on the leasing walk – they set the tone of the development and the custodians of resident culture.
Design works in tandem to set this tone and culture, with the interiors and layouts of a building actively influencing this management style. Familiarity doesn’t just happen, it needs to be designed in from the beginning, into the layout of all the shared spaces and into the recruitment process of the property manager. These details make all the difference, working quietly on under the surface, they will define the vibe and be the differentiator that competitors can’t quite put their finger on or emulate.
Q: Often development designs need to be scaled back to achieve better financial metrics. What is the most difficult part of creating a BTR development that both meets the tenants needs and investors budget and how do you ensure you reach that balance?
A: 60% of the cost of a BTR building cannot be seen or experienced by the resident, with the remaining 40% being equally split between the façade and finishes internally. Residents are buying a product, and the product is something that is seen and touched – directly experienced with all the senses.
With that in mind, for the cost plan, focus extremely hard on the unseen, those elements that are not experienced – drive the engineers hard, work the form and layout to your advantage with designs that bring efficiency and make the biggest dent in the cost plan. That way you won’t have to comprise on the wooden floor, or kitchen surface, or amenity provision.
By working the design smarter not harder, you are able to deliver a product that appeals to both residents and your bottom line, because the truth is they don’t care about the reinforcement detailing in the floor slab, the size of the plant room or the foundation solution, so that is where you should be looking for cost efficiencies.
The aim is balance, a word we use regularly in all parts of the design process with our BTR schemes, with the focus placed heavily on how to balance out the financial model. There are three constitute parts of this financial model – build cost, operational cost, and VALUE. It is the value that is often overlooked, as with any pioneering sector, the true value isn’t evident until after opening. It is a prediction and aspiration for the product that it will deliver on the anticipated rents. The point we need to get to with this is a very granular and transparent conversation about value – what will people pay for, what do residents value, where is the money best spent, etc. We have all asked these questions for many years now, with the answers something our operators can help provide as they continue to gather data from their operating assets and report back on the design decisions that deliver the best return.
HomeViews’ entry into the BTR market will also support this and help create the feedback loop our industry needs. Real, measurable results and analysis from these two groups will eliminate guess work and preconceived ideas. Rather than making design decisions based on how they affect the cost plan, with this intel we can instead ground such decisions in their return on investment, which can be measured by the value they bring or are attributed by residents. For example, private balconies, larger windows, walk-in showers, shoe storage drawers under kitchen units, refuse chutes, acoustic perfections, etc. all cost more. They are non-essential and easily stripped out of a cost plan, and yet it is these same ‘optional extras’ that generate a higher rental return on investment and contribute to an apartment fetching a premium. The value they generate in the form of rent is worth more than their initial impact to the cost plan, so the sooner we have a way of validating this with real facts and figures, the better.
Q: What has been your biggest lesson in BTR design over your career?
A: There is no formula. Every client, every site, every location is different.
In the early days, there seemed to be one – sharers and millennials in dumbbell flats with amenities and a concierge. Tick those boxes, and there you go, it was the paint by numbers equivalent to BTR! How wrong that proved to be, with the variety of product, the range of price points, the difference of locations and character of neighbourhoods all instead adding up to different solutions.
And yet, I am still asked every week, how much amenity should we have? My answer is always the same – know your neighbourhood, know your future residents, and tailor your product to their needs and wants. BTR is not a tick-box exercise, it requires a deep understanding of the place you are looking to create, and knowledge of an operator’s business model, so you can make the right decisions along the way. What is right in one instance might not be so in the next, the solution will be different every time.
Q: Just because it’s such a hot topic – to rubbish chute or not to rubbish chute?
A: Rubbish chute – no question. Who wants to stand in a slimy puddle from a dripping bin bag in the lift on the way back from work?!
Q: Anything else you would like to add on a personal note?
A: I love working in this sector for one reason – everyone has an interest in the product being as good as it can be – the resident, the operator, the local authority, the neighbours, the funders – everyone wants it to thrive. Long may it continue.
The BTR sector has such a big role to play in the future normal of our cities and towns.
In a post pandemic world, where working practices and attitudes will change significantly, BTR developments have an opportunity to become focal points of their neighbourhoods and active participants in their local high streets.
Blended buildings are the future and as we have seen from the recent changes in legislation, they will be supported by evolving trends and conditions across all asset types.
Thank you kindly to John for providing us with his time & insights. We hope you found this Q&A with John as interesting as we did. Thank you for reading & we welcome any feedback you have regarding this series.
Have a good week & don’t forget to join us next Monday for our upcoming investment Q&A.
UK Build to Rent Team
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