HOT & RELEVANT TOPICS
Addressing the Overlooked Pain Points of Work from Home
With more residents working or taking classes from home, what they need from their apartment homes and common-area amenities has changed. In-home offices, study nooks and socially distanced workspaces are now in demand. And while owners and operators are trying to meet these needs, new construction and renovations can’t be completed overnight. In the meantime, apartment communities should focus on immediately addressing some of the more subtle pain points that work-from-home residents are experiencing. To do this, they should start by asking themselves, “Aside from workspaces, what did employers and schools provide that residents no longer have access to?”
2020: A Year of Innovation for Multifamily Operators
The apartment industry doesn’t have a reputation for moving quickly to implement new technology and processes. But last year – as the pandemic completely changed the leasing landscape – operators across the country had to do exactly that. And while self-guided and video tours are some of the more commonly discussed adaptations, they are just two examples of the many ways property managers innovated and modernized their operations in 2020.
The Value of Supplier Partners With Apartment Operations Background
Many operators have come to realize that working with supplier partners that don’t have extensive backgrounds in the apartment industry can be a wildly frustrating experience and a costly mistake. For starters, these companies don’t understand the day-to-day challenges faced by onsite teams, and they don’t have an appreciation of multifamily workflows. But operators don’t have to settle for these problems. That’s because there are a growing number of multifamily supplier partners founded by people who not only understand the industry but have personally worked in apartment operations.
IN THE NEWS
Apartment Construction to Decline in 2021
For a variety of reasons – including regulatory hurdles, sluggish rent growth and growing vacancies – multifamily starts are expected to dip this year. That’s the word from economists at the National Association of Home Builders, who discussed their projections during the virtual 2021 NAHB International Builders’ Show. The economists are predicting that starts will decrease by 11% this year when compared to 2020. “Though the multifamily sector is performing much better than nonresidential construction, developers are facing stiff headwinds in 2021,” said Robert Dietz, chief economist at NAHB.
Multifamily Investors Target Smaller Metros at Record Rate
Multifamily buyers spent nearly 76% of their dollars in 2020 in smaller metro areas, says a report from Newmark. According to GlobeSt.com, “this is the highest investment allocation outside of big cities on record.” And while the pandemic and accompanying economic slowdown have encouraged renters to move to smaller cities, investors were growing more interested in non-gateway markets before the coronavirus. “Over the last five years, investment into non-major markets has increased 13.9%,” GlobeSt.com notes.
Resident Retention Grows More Challenging in Gateway Markets
In the early stages of the pandemic, resident retention rates reached historic levels as renters facing expiring leases and unprecedented economic uncertainty opted to stay in place, even if they just signed a short-term lease extension. As 2020 unfolded, however, retention rates began to drop, especially in gateway metros. “This pattern reflects resident loss to more affordable parts of the country in some cases,” says a GlobeSt.com article. “Perhaps more significantly, however, remaining renters are moving around more frequently than ever before within these markets, taking advantage of now sharply discounted rents.”