While lofts are often considered an art form of their own, making money selling lofts is the greatest art form. Consumers love to visit lofts because they enjoy the creative architecture, the playful interior merchandising, and often a unique variety of color applications both inside and outside. In addition, builders, designers and architects love to design loft products, as they provide a special outlet for creativity and design above and beyond more conventional housing designs. Here are some observations for added value to your next loft design opportunity:
The distinct characteristics of a loft-like space are its large open spaces, clean-line finishes, and volume in the most distinct spaces, such as great room and/or kitchen areas. In addition, the entire space of this home type is more commonly undefined versus the more conventional defined bedroom spaces of a suburban home. A loft or “soft loft” can be either single-story or multi-level product.
As a result of the more undefined bedroom configuration associated with lofts, the buyer profile is traditionally a younger buyer under 35 without children. In addition, the buyers tend to have more of an artistic relationship to what they do for a living; for example: designers, architects, those in the entertainment industry, etc. The locations abundant with this buyer profile tend to be in urban infill locations nearest cultural, entertainment and art districts. Despite the more urban location, this buyer is more commonly a price-sensitive buyer.
What Buyers Love
Consumers love the voluminous open spaces found in lofts, as they allow for an abundance of natural light. There is a tremendous appeal for a strong relationship between the indoor and outdoor experience, so large windows are essential because they help to foster those natural relationships between the indoor and outdoor spaces.
Much like a conventional home, the kitchen remains the heart of a loft product and is traditionally located in the center. However, the kitchen tends to be simplified in design with little definition surrounding it. Formal spaces are not important to this buyer. Unique – yet functional – spaces add to the appeal of this product type.
Interior appointments should be clean, simple and sharp. Natural materials and styles are very important to this buyer profile. Design should lean toward simplicity with style at the forefront. This style will last longer and has a more universal appeal.
What Buyers Don’t Love
While consumers love the large open spaces found in a loft, they expect to pay less for less definition, so sensitivity to price is critical. Loft buyers are attracted to the more unique and creative style that is found in their loft first – it is a reflection of who they are. However, they often revert back to the need for the practicality of closets, storage and defined bedroom space. Consider including some of the functionality of these features while still holding to the unique style that a loft offers. Buyers will pay extra for savvy design, but they want function too.
Demand For Lofts
Lofts are intriguing to new home buyer traffic, as they are fun to visit. It can be as entertaining as visiting some art galleries. However, the demand for this type of product can be very thin. Here’s why:
Sophisticated buyers know the value and investment of real estate, and loft buyers are investment-oriented too. Values in most locations are often driven by bedroom count, and large studio spaces more commonly sell for a lower price when competing with a similar-sized home with more defined spaces like a bedroom or den. One-bedroom and “studio” spaces (undefined bedrooms) are always the toughest to sell no matter how great the spaces feel, and they can be discounted by a solid 10%. Two- and three-bedroom homes are largely more successful, even among non-family buyers.
Opportunities For Lofts
Be careful not to fall in love with the idea of designing and creating loft-like communities. It sounds really cool, but – from a developer’s perspective – the true loft concept is often a struggle on the financial side when comparing the achieved values to more conventional products.
However, if you can take the “true loft” concept and blend it with some of the more conventional functions like a bedroom or built storage, that can be a winning success. The beauty in this is that you will expand the buying pool tremendously by serving the profile defined above, as well as a more-affluent buyer who is looking for a unique and design-savvy home.
Another more profitable approach to loft is a “soft loft” configuration. This configuration is typically a two- or three-story product with defined bedrooms on the first or third level. The main level holds the wide-open space with the “great space” and volume associated with a traditional loft. Soft lofts are the best of both worlds, and people tend to pay more for these spaces when compared to a traditional townhome or flat due to the magnificent spaces with large volume and light. This configuration can be done in an on-grade configuration ranging from 25-35/acre. Santiago Street Lofts in Santa Ana, California is a good example of this kind of loft. You can visitwww.designlens.com for more information about this product and other products.
In conclusion, do your market research, don’t let costs determine your revenue projections and require a higher return if this is a higher-than-usual risk