NE Ohio build

Redwood Living of Independence is opening a new development of house-style apartment homes in Brunswick Hills. The company's portfolio now stands at 15,903 such single-story units. It exclusively builds rental housing for its portfolio and shuns acquiring completed projects.

Redwood Living, the apartment home builder based in Independence, is continuing to add new neighborhoods — its term for its projects — in Northeast Ohio as it adds new markets, such as Nebraska.

Nebraska? Yes, and it is making no little plans for its ninth state for construction and ownership.

Kevin Kwiatkowski, Redwood executive vice president of acquisitions and construction, said in a phone interview that Redwood has several reasons for establishing beachheads in Nebraska.

"There is not a lot of competition from national home builders there for land," Kwiatkowski said, and that helps control land prices and availability.

No other ground-up, build-to-rent operators of house-style, one-floor homes are active in the market, although multiple developers of garden-style apartments are there. Redwood sees tenants for three-story apartment buildings as a different target market than its own, he said.

"It's also a Midwest market. We've done well in Midwestern cities," Kwiatkowski said. "The demographics are similar to Cleveland and Akron. And the topography is similar to other parts of the Midwest."

Redwood also has its own operating rationale for entering the Nebraska market.

Nebraska is a direct flight from Chicago, where Redwood has established an office, and staff at its Chicago office can handle projects there. Kwiatkowski said Redwood sees its Chicago office as a core market and hub for additional expansion elsewhere. Redwood has three communities under construction in the Chicago area and three others in the land-development stage.

In Nebraska, Redwood has two sites in Omaha and one in Bellevue. Each of those communities will have 110 or more units. Streets are going in at the Omaha locations, and the first foundation just went in in Bellevue. Redwood expects to open its first Nebraska neighborhood later this year.

Closer to home, Redwood last month opened Redwood Brunswick Hills, 4356 Red Ivy Drive, where it has completed the first of 103 units. The side-by-side single-story units have five assorted designs, although all have two bedrooms and two bathrooms. Monthly rent starts at $1,749.

Brunswick Hills is Redwood's fifth neighborhood in Medina County, long a land-rich, fertile field for Northeast Ohio homebuilding.

Asked about saturating the market for such units in Medina, Kwiatkowski said Redwood only adds new neighborhoods when local demographics support more building.

"Demand is so strong in the (Brunswick) marketplace that it led us to add another property there," Kwiatkowski said.

Most Redwood residents come from within a five-mile radius, he said. The Brunswick Hills community is two miles from its Valley City development and seven from state Route 18 in Medina, where it has another three communities.

Redwood also has in the works a community in Norton that will open later this summer. And it opened a project in Chardon earlier this year.

Even though much of Redwood's growth is outside Northeast Ohio, it prizes building in its hometown.

"As Redwood continues to expand our portfolio across the country, there is always something special about welcoming a new neighborhood in our backyard," said Taylor Haley, director of property operations at Redwood, in the company's news release announcing the latest Medina County offering.

"The growing community of Brunswick Hills offers an ideal location for Redwood's single-story apartment homes, which create a comfortable and elevated living experience that stands apart from other rental options," Haley said.

At this stage, about 20% of Redwood's new developments are going into Northeast Ohio. The remainder are out of state.

Redwood completed 1,338 units in 2022, Kwiatkowski said, and its portfolio now stands at 15,903 units in more than 120 developments.

Constructing rental housing on such a scale gives Redwood perspective on building woes and the impact of rising interest rates.

Kwiatkowski said the company sees electric meter banks in short supply and transformers and water meters provided by utility providers as "scarce." Like other builders, the company has benefited from more normal lumber costs this past year. It also has yet to see swings in land prices.

On the interest rate side of building housing, rents that Redwood is receiving continue to support building as interest rates have climbed, Kwiatkowski said.