Young real estate developers are using young investors’ money to put young people in young neighborhoods.
John Chaffetz is showing off an apartment building that his development firm, Timberlane Partners, just bought for $7.2 million. He admits it doesn’t look so hot. “This has been treated like a prison camp,” he says of the 32-unit building in Los Angeles’s Echo Park neighborhood. Steel bars stick out of a cinder-block fence, threatening to impale someone. The front door is an ugly metal gate.
But an organic supermarket opened around the corner in November, and a Blue Bottle Coffee just arrived down the block. There’s a farmers market nearby each Friday, and five minutes up Sunset Boulevard is the Silver Lake neighborhood, a nest of hipster cafes and places to buy rare cheese and handmade clothes. Timberlane plans to tear down the building’s security fencing, put terracotta back on the roof, and repair windows that date to its pre-1930 construction. “The goal,” Chaffetz says, “is for this to look like a Moroccan boutique hotel.”
If you’re the sort of twentysomething who needs rhubarb bitters in her cocktail, you’re not going to live just anywhere—and Timberlane co-founders Chaffetz, 32, and Dave Enslow, 37, are counting on that. Much of their Seattle- and Los Angeles-based firm’s strategy is straight out of the developer playbook: buy neglected apartment buildings in promising neighborhoods, renovate, raise rents, and fill them with young professionals. But when fixing up a property, Timberlane takes extra care to provide touches it can market specifically to the perceived whims of millennial tenants. Historically accurate details are a priority. Midcentury Palm Springs architecture inspired the revamp of one dated building, replacing “a lobby that looked like a 1982 funeral home,” Chaffetz says. The company will typically expose brick walls and refinish hardwood floors rather than slap down carpet. It adds amenities for healthier lifestyles. At one site, Timberlane sacrificed five apartments to create a 3,000-square-foot gym with a yoga studio and climbing wall. A building on a popular Seattle bike path got a large bicycle storage and repair room. Where older renters might value ease of parking, millennials want walkable neighborhoods. “They want to drop off their car on a Friday and not see it again until Monday,” Enslow says.