HOT & RELEVANT TOPICS
The Continuing Evolution of Performance Metrics
Operators are using new data to improve decision-making, enhance ROI and position associates for success in a tech-driven world. Panelists in NAA’s APTvirtual session, “The Evolution of Performance Metrics,” discussed the rapidly evolving metrics used in the rental industry. Kicked into overdrive by COVID-19, companies are tapping new performance data to improve training, operating procedures and engagement. As technology evolved during the pandemic, it allowed operators to view more layers in the customer lifecycle and attain a better understanding of the marketing strategies required.
Developer Pivots for 2021
The challenges faced by the multifamily industry in 2020 required flexibility, and those who successfully pivoted last year are in position to capitalize on the opportunities arriving in 2021. Developers who were able to navigate the scrutiny applied to financing during 2020 and remain bullish in the market capitalized on multifamily’s stability and liquidity. Operators who made the upfront investment in virtual reality PropTech also found themselves in an enviable position entering 2021, as the technology is locked in as a leasing tool moving forward. Developers who tracked new data points to better gauge the market and identify the changing priorities of renters are likewise poised to succeed in a post-COVID world.
Vanquishing the Myths on Pet Size Restrictions
While breed restrictions have been a debated topic in the apartment industry, size and weight restrictions also have been a compelling—if less controversial—issue. Many apartment operators are starting to veer away from weight restrictions, simply because no concrete data supports the claim that larger animals cause more damage or disruptions. By doing so, operators are increasing their level of pet-friendliness and making their homes available to a wider segment of residents. The move to eliminate size restrictions is part of the industry’s overhaul of antiquated policies, many of which originated in the 1990s.
IN THE NEWS
Is a Land Bubble Forming for Single-Family Rentals?
With single-family rentals already one of the hottest commodities in the industry entering the New Year, available land for these developments has become quickly acquired. Multiple bidders often compete for land for single-family projects, according to Michael Carey, senior director at Atlus Group. As such, developers will have to settle for smaller land spaces—meaning smaller developments—in top-tier suburbs and will have to move farther away from large cities in hopes of building larger communities. That said, reasons for optimism exist for single-family rentals. The emerging work-from-home trend has made these types of homes more compelling.
2021 Multifamily Outlook: Suburban Strength
Most multifamily firms reported a rebound in the second half of 2020, due to the sector’s buoyancy compared with other real estate classes during the pandemic. The pent-up demand for multifamily investment opportunities during the second-quarter stall created a rush back into the market by the year’s end. Healthy development pipelines are keeping builders busy. The heaviest activity has been found in suburban areas due to an outbound urban population migrating due to COVID concerns and a desire to reduce monthly payments in an unstable economy. Firms that can adapt without being reactive may still capitalize on resilient urban markets in years to come.
Prices for Construction Materials Increase as Lumber Rebounds
Although overall construction levels subsided in 2020, prices for materials continue to rise. A recent report from the Bureau of Labor Statistics indicates that cost for materials in Dec. 2020 were 5.2% higher than it’s year-earlier level and were 0.8% higher than the previous month. Softwood lumber and soft plywood products experienced the greatest uptick (more than a 50% year-over-year increase) while materials such as millworks, steel bars and plumbing fixtures remained relatively flat.