ATLANTA — For the past few months, the apartment sector has been in an upswing from an owner and operator perspective. Rents are rising and occupancy rates are high. However, some fear that these positives in the real estate market are going to be short-lived and eventually come to an end. Kevin Owens, division president of RPM Living, said that when the hottest geographic markets start to slow down, then other markets are going to follow suit.
“Boise, Idaho is the hottest market from a rent growth standpoint in the country for the last few months, and it took a hit in November. So, if the hottest markets are going to start slowing down, then other markets are going to start slowing down. It’s just a natural progression,” said Owens.
Owens’ comment came from a panel titled: “A Report from the Frontlines: What is the Outlook for Leasing, Management & Operations in 2022?” The discussion was one of the many that occurred at France Media’s InterFace Multifamily Southeast conference at the Westin Buckhead hotel in Atlanta on Dec. 2.
The panel experts included moderator Craig Thompson, partner at Carr, Riggs & Ingram LLC; Kevin Owens, division president of RPM Living; Peter Roisman, president of REV Leasing Management Co.; Bryce Shew, managing director of Greystar Property Management Services; and Sherry Freitas, senior managing director and property management at RangeWater. The panelists discussed the changes in the leasing market, hiring issues and amenities design changes.
Leasing gone virtual
Most of the panelists mentioned the switch to more virtual leasing due to the COVID-19 pandemic. Owens said customer service is important no matter what channel is used for leasing.
“In these days, I think it’s more important that our teams are even more adept at customer service because not only are we meeting, greeting and working with customers at the door or in our communities, we’re doing it much more online via chat,” said Owens.
For some people, doing everything online may not work for them. Roisman said that it is hard for prospective renters to really get a feel on what an apartment is like by just looking at a virtual tour on a screen. For example, one can’t smell the hallways at an apartment complex via a virtual tour, nor can that person determine if the area around the apartment appears safe.
“It’s really hard using Google Maps to figure out if that’s where you want to live for the next year or so,” said Roisman.
Certain people may prefer to do everything online without much human interaction, while other people want to have face-to-face meetings during the leasing process. However, like all technology, virtual leasing is not foolproof, and so Freitas said apartment complexes still need people there running the leasing side.
“The most important part is that if there is a problem through the virtual leasing, we have somebody there to address it,” said Freitas.
Hiring, retention challenges
Employers across the country in almost every industry are struggling to find workers, and the apartment industry is no exception. Shew mentioned the hardest position to fill nowadays is maintenance.
Shew said Greystar has a monthly roundtable in which executives speak with leasing, maintenance and managers to find out what their career goals are and what positions they want to fill. For maintenance, he said it’s more limited because their options are really only to be a maintenance tech, maintenance supervisor or regional maintenance manager.
“We’re going to have to find a way to keep our maintenance guys engaged in a training path for them to go where they can be advanced to,” said Shew.
With such a plethora of job openings, some employees are also seeking higher wages. Owens said that the elephant in the room is pay.
“We’ve got to pay the people that work on these properties a wage that is indicative of the impact they have on your business, and in many cases, that’s just not happening today. Certainly, I understand the underwriting, certainly understand there’s return expectations, but at some point it’s going to be really tough to staff a property if you’re not paying adequately. So we have to pay well to compete in the marketplace,” said Owens.
Additionally, Owens said first impressions matter when retaining new employees, which is why RPM Living has an ambassador program where each new employee is paired with a mentor. The company does this in order to help the employees feel more comfortable at work. He said the first 90 days for a new employee are the most crucial.
“That associate is really making a decision about us as an organization during that time. We’ve got to make sure they like us because we’re in a market where if they don’t, they can go tomorrow down the street and be somewhere else,” said Owens.
Changes in amenities, apartment interiors
The COVID-19 pandemic created many changes to the multifamily sector. Renters want more work-from-home space. This includes work nooks on the apartment property or even an island or actual desk space inside the apartment unit.
A lot of people may have adopted a “pandemic pet” to keep them company when they were stuck at home during COVID-19 shutdowns. To accommodate these new pet owners, many apartment developers are adding more pet play space and amenities such as a pet spa.
Fitness centers have also become more advanced with more equipment and bigger fitness spaces. Shew said that even if most residents do not use the fitness centers, the space is vital for attracting new tenants.
“Everybody walks into the gym like me and says, ‘Oh, I’m going to get in shape now,’ and you have that dream in your head. In reality, it’s a great closing tool even if only about 20 to 30 percent of your residents use it,” said Shew.
Roisman said each apartment needs to have quality amenities.
“From a leasing perspective, just make sure you’re competitive in terms of your amenities. Because if you’re not, it could be the reason you’re not getting the leases,” said Roisman.
— Julia Sanders