Developer brings by-the-bedroom leases with Walnut Quads project

Miller-O’Reilly Co. Inc. is adding a different leasing arrangement to its apartment-leasing repertoire with Walnut Quads, its latest multifamily development.

Now under construction at 450 E. Walnut St., Walnut Quads is a four-story apartment development with eight four-bedroom units of roughly 1,400 square feet apiece. But unlike the company’s other apartment developments – including Eko Park and The Fremont – Walnut Quads features bedrooms that will be individually leased.

Each bedroom will lease for $495, including cable, Internet and utilities. Each bedroom will have its own bathroom and locks for privacy.

Tenants – most likely students – will share common kitchen and living room areas, said developer Matt Miller, and interested tenants can search for roommates on Walnut Quads’ Facebook page.

Miller said such lease-by-the-bedroom arrangements are common in U.S. college towns, where most often, parents lease the bedrooms for their college-bound children.

Miller saw an opportunity for a new development in Springfield, where student populations include Missouri State, Drury and Evangel universities, as well as Ozarks Technical Community College.

“This is a massively successful business model. All I’ve done is hook onto it and say I’m going to do what everybody else is doing and do that in Springfield,” he said. “There was a niche that I was totally missing.”

Shannon Handwerker, property manager with Magers Management Co., said her company has been leasing student housing within walking distance of MSU for about 30 years, but has never offered the lease-by-the bedroom option.

She said Magers Management Co. has 100 student-housing units – all occupied – in that area, from one-bedroom units that lease for $400 to four-bedroom units that lease for $1,600 a month. Magers’ four-bedroom units are usually shared by roommates, she said, but it’s up to the tenants to decide to live together and approach the company about a lease.

“Each kid pays $400, but we pay all of their utilities, and we provide the washer and dryer inside their units,” she said. “The groups come to us.”

Mark Tendai, owner of Metro Housing, a free rental-finding service, said he knows of area property owners who use individual leases for four-bedroom units, primarily for legal reasons and so that cosigners – often required for students – don’t have to worry about signing a group lease and getting stuck with the full lease amount if some of the parties decide not to pay.

“(The) leases were broken apart, because cosigners were very unwilling to sign for kids that they didn’t know,” Tendai said. “If two guys from St. Louis hook up with two guys from Kansas City, the St. Louis mother doesn’t know anything about these kids that their kids are living with … or their ability to pay. Parents stand up and clap.”

Build LLC is the general contractor for Walnut Quads, which, like Eko Park, has environmentally friendly features, including Energy Star washers and dryers, low-flow showerheads, programmable thermostats and mechanical units with high ratings for seasonal energy efficiency.

“Redeveloping urban space, in itself, is a green activity,” Miller said. “It doesn’t require the creation of new roads or new infrastructure.

Walnut Quads, slated for completion July 1, comprises 12,500 square feet and has an estimated construction cost of $1 million, financed by Springfield First Community Bank, according to past Springfield Business Journal coverage.

Walnut Quads isn’t Miller’s first foray into Springfield’s housing market. Though he’s partners with Pat O’Reilly in Miller-O’Reilly Co., Miller is the sole owner of Miller Commerce LLC, developer of properties including Six23 Condos and Walnut Alley Townhomes, and he’s also a partner in The Matt Miller Co./Blueblock Lofts with Jeff Schrag and Matthew Miller. That venture’s developments include Founders Park Lofts and Brick City.

Matt Miller said his Walnut Alley Townhomes, at 710 W. Walnut Street, as well as Six23 Condos, 623 W. Walnut St., were a rarity in that they were new residential construction in downtown Springfield.

“I hopped in and took a little bit of a risk and that was successful … so I built the condos down the road and now I’m building another (development),” he said.

And while Walnut Quads is bringing a new lease option to the market, Miller-O’Reilly Co. isn’t alone in its efforts to break from tradition to entice apartment renters.

TLC Properties, which has 2,569 units in 14 properties, including Coryell Crossing and Sherwood Village, for example, has added an iPhone application for its tenants, many of whom are college students.

“From your phone, you can pay your rent, you can contact your manager with an e-mail, submit a maintenance request, you can view a copy of your a lease for your file, and you can also search for (available) apartments,” he said, noting that the app has been downloaded more than 1,000 times and warranted mention in Multi-Housing News Magazine.

Harvey said TLC’s occupancy rate is 95 percent, with units ranging from studios that lease for $450 a month to four-bedroom units that run $1,200 a month.

In August 2009, TLC added a shuttle service for its student tenants, who can catch rides to and from campus for a one-time fee of $10. That service, which uses two shuttles, is available at 10 of the company’s properties, Harvey said.

Features Editor Maria Hoover contributed to this story.[[In-content Ad]]