Multifamily Industry Needs to Adapt to the Sharing Economy, Say InterFace Panelists
How are apartment communities adapting to the sharing economy? That’s the central question that multifamily developers need to ask themselves going forward, according to Wes Taubel, co-founder and managing partner of TWO Capital Partners, a private multifamily developer and investor based in Atlanta. The sharing economy is a term given to the online-driven practices of consumers shopping and ordering food online, renting out their apartment or house via AirBNB and uploading their experiences via social media.
“From a development perspective, the biggest thing is a holistic assessment of how you design your community to incorporate the renters’ lifestyle. We’re working with hotel and office interior designers to think about how do we authentically design our amenity and community offerings that work with how this group lives their lives,” said Taubel, who spoke at the seventh-annual InterFace Multifamily Southeast conference on Thursday, Dec. 1 at the Westin Buckhead.
Taubel served as a speaker on the development panel entitled “Walking the Tightrope: Will New Development Stay in Balance or Is There Too Much Supply Coming? An Overview of Today’s Development Environment,” which was moderated by Ron Cameron, senior vice president and principal of Colliers International.
The sharing economy also includes co-working office spaces that companies like WeWork, Regus and ShareDesk provide. Taubel said that his firm has consulted with such providers to build separate areas where residents can work in an office environment without leaving their community, and renters will pay a premium to live in a community that provides that service.
“It’s similar to building high-end fitness centers and charging a higher rent with the justification that it’s a replacement for a gym membership,” said Taubel.
More than 400 multifamily owners, investors, brokers, developers, operators, lenders and financial intermediaries attended the full-day conference, which featured a keynote address from Michael Wood, co-founder of 747 Insights, and nine panel discussions on all aspects of the multifamily industry.
Wood’s company, 747 Insights, is a boutique research firm that educates businesses and institutions on the patterns and behaviors of Millennials and Generation Z (or post-Millennials), which is of particular importance to the multifamily industry as they make up a bulk of the renting cohort.
Wood’s presentation included audience participation a la the old game show “Card Sharks” and a clip from “Saturday Night Live” about Swiftamine, a medicine that helps adults cope with vertigo caused by the realization that they actually like Taylor Swift’s music. The fake commercial highlighted Wood’s point that the generational gap between Baby Boomers, Generation X, Millennials and Generation Z isn’t as pronounced as it seems.
Millennials and Generation Z grew up in the sharing economy and have certain expectations about where they live, according to Wood. The keynote speaker addressed certain items for owners, managers and developers to consider in their communities, such as inbound deliveries from Amazon and other e-commerce retailers.
“Millennials are doing more online shopping than ever before. This obviously has implications on the design, facilities and services you’re providing within your communities,” said Wood. “Are you set up and equipped to handle all this inbound flow of packages from Amazon and deliveries of food from local restaurants? Is it seamless for residents to receive those deliveries or is it difficult?”
Wood also addressed the customer service aspect of apartment management and the importance of making processes easier for the residents, such as online applications without a million pages of required information, or making moving day easier by setting up a place where residents can donate their unwanted furniture or appliances.
“Multifamily owners and operators need to simplify their strategy and all processes,” urged Wood.
One of the key pioneers of the sharing economy is AirBNB, and multifamily owners and managers are having to make decisions on whether their communities will embrace the room-sharing forum.
“In the age of the sharing economy, [residents] will be looking at your policies for room-sharing services at your communities,” said Wood. “That’s the world that they live in.”
In addition to these considerations, developers are trying to meet the high standards set by the student housing industry. While attending college, Millennials and Generation Z lived in developments with top-of-the-line amenities and were walkable to campus, and they expect similar amenities in their current communities. Taubel believes that the design and function of new multifamily product deals more with these factors than the growing presence of online influences like Amazon and AirBNB.
“Whether you partner with AirBNB or you don’t, whether you refuse to accept packages or fully embrace it, those
considerations are in the margins. They will just become the norm because that’s the way the world works now. Over time, these factors will get ‘user-reviewed’ into something that becomes common practice,” said Taubel. “We are getting to the root cause of what these communities are and resisting the temptation to just play in the margins.”
— John Nelson