Amenities a good investment in residential market.

There's no doubt about it - the multifamily housing industry is changing. With little or no new construction going on in the state, multi-family housing owners must find Additional ways to remain successful and they are discovering that one way is by turning to existing properties and creating opportunities through internal renovations and expansion.

According to Richard Kurtz of The Kamson Corporation, "Right now there are just too many problems involved with the construction of apartments - it's too expensive, it's difficult to get the necessary approval and it just doesn't make sense to build, which is great news for existing multi-family housing units." As a result, the real estate executive noted that "wherever possible, companies are looking for opportunities to improve the living environment of residents."

Kurtz pointed out that the focus now should be on adding to and improving current properties with value-added amenities and services to keep them ahead of the competition. Such is the case at one of Kamson's own properties, Fox Meadow Apartments in Maple Shade, NJ. There, Kurtz has recently completed construction on a 26,000 square-foot shopping center on the grounds of Fox Meadow, a 1,492-unit complex. Full of service-oriented stores, the facility focuses on convenience for Fox Meadow residents and includes such businesses as a convenience store, a card & gift shop, a dry cleaner, hair salon and pizzeria. The crown jewel and mainstay of the building is the recently-opened 14,000 square-foot, one million dollar health and fitness complex - New Jersey Health & Fitness Center.

The increased importance of fitness in the everyday lives of people and the idea of convenience are two primary reasons behind Kurtz's decision to open the facility.

He noted that real estate owners are realizing that value-added amenities like the fitness and shopping centers are a valuable tool for marketing their properties and creating additional sources of income. Kurtz has received much positive feedback from current residents who have renewed leases solely because of the addition of the fitness center. And the fact that both facilities are open to the general public and non-residents alike (the facility fronts Route 73, a well-traveled venue used by commuters heading in and out of Philadelphia), allows them to act as their own profit center, bringing in revenue from membership fees, (Fox Meadow residents do receive discounts), and store space rental. In addition, the apartment complex benefits from increased exposure, as non-residents who shop in the stores and use the fitness facility have a chance to check out the apartments and the grounds, resulting in increased apartment rentals.

As well, both play an important role in resident retention. Residents begin to look to the fitness center not only as a place to keep fit, but also as a social center, and the same holds true for those residents who continually shop in the same stores and see the familiar faces of their neighbors time and again. Property managers point out that residents who spend time establishing themselves in a place are less likely to move, as they have built a cohesive unit and will be hesitant to move away from friends and people that they know.

The ever-growing importance exercise and a healthy lifestyle play in a person's everyday life encouraged Kurtz to build a fitness facility with the capacity to handle 2,000 members.

"The New Jersey Health & Fitness Complex was designed to accommodate the healthier lifestyle that people are demanding today," said Kurtz. "We felt that if we were truly going to provide the residents with everything they needed then the fitness center would have to be exceptional."

Kurtz pointed out that real estate owners and managers are increasingly becoming aware of the importance of having a state-of-the-art fitness facility, and as a result are making appropriate changes.

"In the 80s, when the fitness craze hit, everyone scrambled to include fitness rooms in their facilities. Most consisted of a few free weights, an exercise bike and a rowing machine. Now as we move into the 90s, we're finding that the public is much more educated in the area of fitness. They're looking for top-of-the-line Cybex equipment, a variety of cardiovascular equipment, and professional trainers and instructors. They're not settling for less and they're willing to pay for this quality. In fact, we're seeing many people using this as a deciding factor as to whether they will live on the property or not."

Currently he is the only apartment complex in his area to add such an elaborate facility, and he predicts that others will soon be taking steps to upgrade their fitness areas in response to the demand for quality fitness facilities. "It just makes sense," he noted. "We're adding to the overall quality of living, and adding convenience - two factors which are so important in today's fast-paced society. Combined with the shopping center, we've worked to create a real community atmosphere where residents can have everything they need within walking distance. We decided to restore that sense of community that was once commonplace in America by integrating all of today's conveniences with yesterday's ease of living."

What's next for Fox Meadow? By late Fall, Kurtz plans to have a day-care center operating on-site for the convenience of residents, and within the next two years, Kamson will be breaking ground for 152 townhouses planned on 30 acres adjacent to the rental community. These contemporary townhouses with open, high cathedral ceilings, modern appliances and private garages will give the public the opportunity for ownership in the same community.

"This rounds off the community concept that we have been creating. With turnover in townhouses in this area around 8-10 percent a year, there will always be the opportunity for residents of Fox Meadow apartments to move up to ownership while still enjoying the convenient lifestyle that they have grown accustomed to," Kurtz said.

As the multi-family housing market changes and competition grows, multifamily housing owners and managers will need to come up with innovative new ideas to remain competitive. Kurtz feels that the key is to run properties efficiently and to continuously upgrade the apartments. "Owners are simply going to have to look within to improve and add value to what they already have."