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Chatbots Continue to Make Headway
The apartment industry has been using chatbots to assist on the front end of the leasing process for a few years, but the capabilities of these instant-message style bots continues to increase. As their AI-powered natural language processing becomes stronger, they are able to answer more detailed questions from prospects. Additionally, chatbots could serve as a key component of renewal efforts and maintenance processes as their capabilities increase. “We view our AI technology basically as another leasing agent,” said Bonnie Spinks, senior director of property marketing for Pegasus Residential.
3 Reasons Affordable Housing is Destined to Thrive
The pandemic had many impacts on the commercial real estate industry, including highlighting the need for more affordable housing. While retail and hospitality sectors continue to struggle, affordable housing sectors are outperforming many of their CRE counterparts. This is partly because general contractors were considered essential, but when the pandemic reaches the end, affordable housing will continue to expand within the industry for three reasons: an increase in the demand for affordable housing, affordable historically has been a strong performer and because contractors are finding unique and creative ways to respond to the supply shortages that have gripped the nation.
Here’s What California Senate Bill 1157 Means
Multifamily operators in California that receive federal, state or local subsidies now must offer residents in subsidized apartment homes the option of having their rental payments reported to a major credit bureau. That’s per SB 1157, a new California Senate Bill that took effect July 1. The first-of-its-kind bill, aimed to help lower-income renters build their credit histories, “starts to correct the longstanding inequity where those with the least resources have to fight the hardest to establish and improve their credit scores,” according to California State Senator Steven Bradford.
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As Affordability Declines, Gen Z Wants to Buy
Single-family home prices continue to increase faster than wages. In 61% of counties analyzed across the country, median prices have become less affordable than historical averages, with $305,000 now the average cost of a home. The largest price increases occurred in “sunbelt” counties that drew people in during the pandemic, like San Bernardino County and Maricopa County, which rose by 25% and 21%, respectively. That hasn’t yet deterred the Gen Z population from aspiring to purchase a home of their own in the future, with 43% of those surveyed hoping to enter the market within five years.
Aging Office Parks Offer Multifamily Opportunity
As business parks continue to fall out of favor, office-to-multifamily conversions are trending. Developers are transforming older office parks into mixed-use properties as the demand for suburban housing continues to climb. Such undertakings include a number of hurdles, and developers must account for regulatory issues, zoning, infrastructure improvements, traffic impacts, parking requirements and utility needs. But municipalities understand the escalating need for additional multifamily housing, as well as the potential sales-tax infusion provided by mixed-use properties, and are often amenable to such projects. Coupled with reasonable land acquisition costs, the proposition of repurposing defunct office park developments is becoming more popular and gradually reshaping the multifamily landscape.
Apartment Price Growth Eclipses Industrial Increases
Apartment price growth has surpassed industrial price increases in year-over-year growth. According to data from Real Capital Analytics, while apartment prices increased at 10.1%, industrial prices were up by 9.5%. Multifamily deal activity has eclipsed Q1 2020 numbers and volume from the years leading up to the pandemic. Multifamily properties also saw the sharpest decline in number of days-on-market in May, with average closing times declining by 16.75% from Q4 of 2020 to Q1 of 2021. Overall, CRE volume is expected to recover through 2023 to $590 billion, compared with $500 billion in 2021.