HOT & RELEVANT TOPICS
Crisis Communication: Starting with Values
To say that communication is difficult for multifamily owners and operators in the midst of protests against racial injustice and the pandemic would be worse than an understatement. Communication is downright daunting and seemingly never-ending. Often, it can feel as though companies are ill-equipped to communicate in these difficult circumstances. Fortunately, many apartment owner/operators are plenty equipped. They’re equipped with their values and human resources policies that reject discrimination and racism and put the well-being and safety of your residents and teams first.
Call to Action: End Racism and Social Injustice
The framework to combat systemic discrimination in the multifamily industry has been put into place. Tammy K. Jones, cofounder and chief executive officer of Basis Investment Group, recently provided an in-depth discussion of her five-step initiative with Doug Bibby, president of the National Multifamily Housing Council. Steps recommended to apartment operators included the development of a diversity business plan, the creation of a diversity ecosystem, increased minority spend, increased access to capital and to leverage strategic partnerships. “And in those initiatives, be bold,” Jones said.
Don’t be the Victim of a Zombie Account Invasion
Zombie account horror stories include former associates accessing and depleting corporate bank accounts, internal smear campaigns against management or ownership, and efforts to alienate customers. More common results of zombie attacks, such as intellectual property breaches and data leaks, can still cause substantial and lasting damage. So, what are the risks and how can they be avoided? We’ll take a look at a few solutions and best practices to avoid a zombie invasion.
IN THE NEWS
Multifamily Recruiting in Covid-19 Era and Beyond
While the national unemployment rate has skyrocketed, the commercial real estate sector has been relatively immune. The national rate climbed to 13% this month while CRE experienced only 4% unemployment. Pre-pandemic, the national rate hovered around 4% while CRE was at 2%. The current 4% rate is a win-win for both associates and apartment operators as competition for jobs remains fierce. On the employee side, qualified workers remain in high demand, which isn’t the case in all industries. On the operator side, the slightly wider unemployment pool means candidates have less leverage to demand perks and extended benefits. Hiring qualifications will now further include qualities such as flexibility and resilience.
Construction Costs Expected to Ease For Apartment Developers
For the past few years, one of the primary concerns for apartment developers has been the rising cost of construction materials and labor. A reprieve in those costs is soon to come, although not in the way the industry envisioned. Due to the pandemic, many developments have been delayed or indefinitely put on hold. With projects halted, construction materials and workers are now readily available, and the premium costs of each have been put on hold due to the tepid demand. On the flipside, costs of certain materials have risen due to pandemic-related shortages and delivery logistics.
Multifamily Poised for a Reversal of Fortune
The end to supplemental unemployment payments and rising COVID-19 infections could knock multifamily down a few notches, according to Ivan Kaufman, CEO at Arbor Realty Trust. So far, multifamily has fared well during the pandemic, with most renters making their monthly lease payments. However, the recent surge in infections could end up keeping some businesses closed or force those that had reopened to shutter their doors once again. Schools not reopening as usual will pose income challenges for large percentage of renters, as well. While occupancy rates could drop by another 7%, the demand for multifamily assets remains high, and liquidity continues to provide consistency.