HOT & RELEVANT TOPICS
The Contactless Community Hype: Take a Deep Breath
Contactless has certainly become a 2020 buzzword. And while many apartment operators are using technology in hopes of making their communities completely touch-free, it might be a hasty approach, according to CJ Edmonds. While eliminating a variety of touch points is commendable, the cost of doing so in 100% fashion might be a budget breaker. Additionally, any competitive advantage gained by such measures will likely be obsolete within a year or two. While not advocating avoiding these types of technologies, Edmonds recommends a smart approach in selecting contactless options that truly matter.
Apartment Industry Reassesses Data-Sharing Processes
Many apartment operators continue to believe that proprietary information results in a competitive edge. That old-school mentality is starting to shift in multifamily, as more and more operators are opting for integration-based platforms. Open systems foster collaboration, help optimize technological resources and aid in key decision-making initiatives. Brent Schackmann of Roscoe Property Management is among those who believe data sharing is helping reshape operations and making a pronounced impact. As part of this shift, vendors with data-sharing capabilities are becoming more attractive partners.
The Benefits of Eliminating Pet Breed Restrictions
Breed restrictions represent a very 1990s-era apartment stance. In the current climate and with the technology resources available, communities are slowly, but surely moving to a model in which the pet is evaluated on an individual basis rather than solely on preexisting characteristics. When done responsibly, the elimination or reduction of breed restrictions has numerous benefits for apartment communities. These include a bigger pool of potential residents, longer average stays, increased pet revenue and improved occupancy rates.
IN THE NEWS
New Fund Aims to Create Middle-Income Housing Opportunities
Urban Housing Ventures—a fund partnership with Microsoft, Washington Federal, Washington Trust and Stream Real Estate—is giving middle-income housing a boost in Washington. The fund acquired three Class-A multifamily communities in Bellevue and Kirkland, Wash., with the intention of converting 40% of the apartments to target renters earning 60% to 80% of the area’s median income. Middle-income renters typically earn too much to qualify for affordable housing, leaving them to struggle to afford lease payments in pricey housing markets like the Pacific Northwest. UHV is a privately funded company, with financing provided by Berkadia and Freddie Mac.
Apartment Investors Mull Opportunities in Distressed Malls
There are currently more than 125 distressed shopping mall properties in the U.S that are either currently involved in ongoing mixed-use redevelopment projects or set to move forward with redevelopment. The number of sites considering this type of redevelopment has multiplied roughly three to four times since the start of the pandemic, as developers seek to take advantage of prime locations struggling for retail relevancy. As a result of consumer reluctance to shop in person during the pandemic, a vast majority of malls and retail shopping centers have lost at least one of their anchor stores in the past nine months. Apartment communities are going up in abandoned mall parking lots while demolition on those big-box stores is still taking place.
Apartment Values are Coming Back
From an investor perspective, multifamily has proven resilient during the pandemic. Following a short period during the summer where 5% to 10% discounts could be found in the apartment market, cap rates returned to pre-COVID levels. With a few market-specific exceptions, multifamily property values are roughly the same as they were prior to the pandemic. Unlike other sectors like hospitality or commercial real estate, most multifamily residents are making their rent payments. However, data shows that renters working from home are leaving expensive coastal markets in search of cheaper rent in the Sun Belt, which is where investors are now focusing.