Hamilton Herald Masthead


Front Page - Friday, April 9, 2021

Filling a rental market niche

Collier development gives underserved segment some welcome options

Chattanooga builder Ethan Collier was tossing around names for his new residential development in Red Bank when he realized he was living with the perfect one.

Collier has two children: Caleb, 14, and Julia, 12. He named his newest community for his daughter, not because he favors her over his son but because he says he believes it’s the kind of neighborhood where she would flourish.

“Julia has a tremendous amount of energy; she’s also very positive and she loves people,” Collier adds. “When we’re picking her up from school and driving her out of the parking lot, she knows every student’s name, their parents’ names and their dog’s name. She’s just a people person.”

Collier and his family live in an urban environment similar to many of his developments in the downtown Chattanooga area, such as Main Street Townhomes, Harper Street and Reside North.

But Collier says Julia’s Park, which is located off Delaschmitt Road, is the kind of suburban neighborhood where families can gather on deep front porches and in roomy backyards to socialize as their children ride bikes up and down the street.

“Julia would thrive in a neighborhood like this,” he says from inside the model home. “She would know every person and be welcome in every house.”

Collier is known for building dense urban products, making Julia’s Park, which spreads 34 homes across 9 acres of Red Bank soil, a departure for his company, Collier Construction. Houses are set at the ends of long driveways, and there’s enough room between each residence to foster a sense of privacy.

“We’d normally put 100 houses on 9 acres, but that doesn’t work for everyone,” Collier notes. “A lot of our buyers are young and want to live in a neighborhood where they can comfortably raise a family.”

In another nod to traditional suburban neighborhoods, each front yard sports a sapling of the tree after which the home’s floor plan was named, whether it was the Birch, Oak, Maple or Poplar plan.

Collier is also taking advantage of changes in elevation, flipping floor plans and giving each home exterior a unique color to avoid the cookie cutter appearance of some suburban neighborhoods. Instead of looking like a community built in one fell swoop, Julia’s Park looks like it could have developed over time, house by house.

Despite offering a respite from the buzz of downtown Chattanooga, Julia’s Park is located only a short drive from the heart of the city.

“We’re probably 10 minutes from downtown, but also close to all the amenities that come with the suburbs,” Collier boasts. “Red Bank has positioned itself well as a city.”

Julia’s Park also represents a second departure for Collier: Instead of selling the houses, he’s partnered with Texas-based developer RoseRock to create a rental product.

Todd Womack, founder of Generation Property Management in Chattanooga, introduced Collier to RoseRock early last year. As Collier talked with CEO John Jordan, executive vice president Tyler Coats and others, he identified several values and interests his company shares with the Lone Star State operation, including the desire to build great neighborhoods.

“RoseRock wants to do the same things we’ve been doing in the for-sale market, but offer their product for rent, so it felt like a natural fit,” Collier says.

Julia’s Park was about 70% complete when Collier Construction and RoseRock started discussing turning it into a rental product.

With buyers in Chattanooga snapping up houses before they hit the market, Collier says he’s confident he’d be able to sell out Julia’s Park, but he says building a for-lease community allows his company to help fill a void in new rental product in Chattanooga.

“Finding a single-family, detached rental house in Chattanooga is almost impossible,” Collier advances. “And good luck trying to find one that’s not at least 10 years old. North Chattanooga, Highland Park and other places in Red Bank have plenty of rental houses, but they’re 40 years old, they don’t have garages or open floor plans and the closets are small.

“This,” Collier says as he gestures toward the interior of the home, “is impossible to find in Chattanooga.”

Although Collier is seated in the living room, the floor plan allows him to see through the dining area and into kitchen. From his vantage point, he also has quick access to a two-car garage, a half-bath and the master bedroom, which contains a full bath.

“We brought the master of the main in a lot of our product, which is not the case in a lot of new construction,” he notes.

Sunlight is beaming through a window above the front door and coming to rest on a Samsung stove in the kitchen. Along the way, it illuminates hardwood floors and pricey-looking cabinets, countertops and plumbing fixtures.

Collier confirms his company spared no expense when building the homes in Julia’s Park. “These are the same finishes we would include with a $350,000 house. We didn’t say, ‘This is a cheap product, so it gets cheap materials.’”

Three more bedrooms and two more full bathrooms occupy the second floor, which begins on the top side of the 10-foot ceilings. All told, the model home offers 1,775 square feet of living and storage space. Coats, who’s seated near Collier, insists it feels like more.

“We spent a lot of time on the efficiency of the floor plans, so our 1,775 square-foot house feels more like a 2,000 square-foot house.”

RoseRock comes to Chattanooga with a history of commercial real estate development but only one other residential community under construction. The venture into residential projects occurred when the company decided to approach housing with a commercial mindset, meaning it’s looking to take on projects that cost between $10 million and $12 million and take about a year to complete.

The company’s principals identified Chattanooga as prime spot for rental homes due to its high demand for housing and the large number of people who are relocating to the city.

“People will benefit from Julia’s Park being here, whether they need somewhere to live while they build a house, or they have moved to Chattanooga but don’t know where in town they want to live, or they will be here only temporarily,” Coats suggests. “Before they decide where their kids are going to go to school or where they are going to build their home, this is a great place for them.”

Coats says Julia’s Park will also appeal to older individuals who travel extensively or prefer not to deal with maintenance and repairs.

Jordan, who joins the conversation virtually from Texas, says RoseRock did its due diligence before embarking on its new venture.

“We’ve watched the data now for about three and a half years, and with only 19% of baby boomers desiring home ownership and a growing number of millennials no longer seeing home ownership as the way to build their net worth, there’s a growing pool of people who desire the convenience of a rental as opposed to home ownership,” he says.

“So our idea was to partner with the best in class – a Collier Construction and a Generation Property Management – in Chattanooga and create a traditional neighborhood. We felt like we could curate a beautiful neighborhood if we could professionally manage the exteriors and yards.”

When it comes to population growth, the U.S. Census lines up with what Coats and Jordan are saying: Between 2010 and 2019, Chattanooga’s population grew from 170,000-plus to nearly 183,000, or 7.3%.

However, the 2021 Home Buyers and Sellers Generational Trends Report from the National Association of Realtors suggests a large percentage of millennials still want to own a home. Released March 16, the report shows millennials make up the largest share of current homebuyers at 37%.

Moreover, a HousingWire article published Feb. 20, 2020 cites a NerdWallet Home Buyer Report that states buying a home is a priority for 84% of Americans. The report estimates that nearly 100 million Americans plan on purchasing a home in the next five years.

Regardless, there are also people who want convenience and therefore choose to rent, Jordan continues.

“All we’re doing in Julia’s Park and other neighborhoods around the country is selling quality, convenience and service. And home ownership is everything but convenient because you’re always making repairs and mowing and painting.”

RoseRock’s brand of convenience does have a price, though. In Julia’s Park, it’s $2,200 to $2,500 a month for 1,486 to 1,775 square feet of home.

The market – not RoseRock – dictates this price, Coats says. So far, the company appears to be hitting the bullseye, as residents have already leased and moved into several of the houses, even though the community might not be finished until mid-July.

Meanwhile, RoseRock and Collier Construction are eyeing different sites in the Chattanooga area for additional rental projects – even as Collier also continues to build homes for sale.

Whether Collier earns as healthy a return on his investment on Julia’s Park could depend on how negotiations proceed with his daughter, he jokes.

“Julia has indicated she would like royalties. Every time she sees her name in a newspaper, she asks me for money.”