M.J. Peterson Corp. will spend $8.5 million to build 130 garden apartments on Chestnut Ridge Road in Amherst.
The real estate company sees no signs of saturation in the Amherst rental market. Some town leaders feared the market was getting overcrowded in the late 1990s after several developers built more than 1,000 new units.
Dennis Penman, executive vice president of M.J. Peterson, said his company sees demand for more apartments. "Our vacancy rates are relatively low in our existing portfolio, and the interest rates are favorable, so we decided it was a good time to build new units," he said.
The company will build the phased complex on 60 acres across Chestnut Ridge Road from its 168-unit London Towne development and the 112-unit Liberty Square complex.
The project will include four phases, and ultimately grow to 400 apartments, Penman said. The land already has the necessary zoning, but M.J. Peterson still needs site plan approval from the town.
This will be the first new apartment construction in 20 years for the real estate company that owns about 3,500 units.
Amherst has seen several other developers put up "luxury" apartment complexes in recent years, including the 154-unit Renaissance Place off Transit Road.
Clover Management President Michael Joseph, one of Amherst's largest apartment owners, said he also sees strong market demand.
"We're very encouraged about the market. I think many of the jobs being created in the area are renter's jobs. They're $20,000- to $35,000-a-year jobs and I think that's why the rental market is doing so well," Joseph said.
Clover Management's 2,700-unit portfolio is running at about 95 percent occupancy, Joseph said. The company is also building new apartments, but not in Amherst.
Clover Management recently broke ground for a $6.3 million, 113-unit complex in Lackawanna tailored for seniors. A similar $8 million, 116-unit facility opened in West Seneca last year and is almost completely full, Joseph said.
M.J. Peterson hopes to begin construction on its new project next spring. Rents on the one and two-bedroom units will run from $750 to $1,000 a month. The apartment complex will attempt to draw young couples and singles from the nearby University at Buffalo's Amherst campus and the Audubon Business Park, Penman said.