Three Key Trends to Monitor in Philadelphia’s Multifamily Market
By Christine Beechan, area vice president, Morgan Properties
If there’s one certainty about the unusual year that is 2020, it’s that COVID-19 has significantly impacted every industry across the globe.
For apartment owners and operators, we’ve entered uncharted territory in terms of changing renter demands, unconventional leasing methods and new operational procedures. Consequently, it’s especially important right now for apartment professionals to understand the complexities of the current state of the market and where it’s heading.
As 2021 is fast approaching, here are three key trends we can expect to see in the Philadelphia multifamily market for the remainder of 2020 and into the new year.
Demand Remains Stable
When the pandemic initially hit, we noticed a decrease in leasing because Pennsylvania was under strict orders to shelter-in-place. Because of this uncertainty, people wanted to see how the pandemic would shake out and ultimately decided to stay put, affecting markets across the nation.
However, as those restrictions were lifted and the economy started to stabilize, we noticed people felt more comfortable moving into new units, which is typical during the summer season prior to school commencing. Unlike most cities, both urban and suburban parts of Philadelphia have seen accelerated growth in multifamily demand and absorption through the summer, proving a steady stream of interest in both regions.
Since June, our leasing activity has returned to a normal volume. We’ve seen a substantial influx of new residents in our Philadelphia-area properties and expect our properties in other markets to see the same levels of interest.
As people have assimilated to the current environment and economy, we have noticed that renters are demanding larger, more affordable apartment spaces in the work-from-home environment. We’ve also observed that demand for Class B apartment units has stabilized.
As a result, we can expect to see local properties maintaining strong leasing efforts and achieving their occupancy goals well into the future.
Safety Comes First
Now more than ever before, the safety and wellness of residents and employees is a top priority.
As a result of COVID-19, apartment owners and managers have had to closely follow guidelines provided by the Centers for Disease Control & Prevention (CDC) and state officials and implement a variety of protocols to ensure they can continue to serve residents in a timely manner without compromising the safety of employees.
Since March, apartment owners have been instrumental in implementing top-of-the-line sanitation methods in all communities to ensure all renters belong to an environment where they feel safe and comfortable.
Steps taken include making prevention supplies and materials such as masks and hand sanitizer available, limiting visitations by outside vendors and increasing the cleaning of high-touch surface areas.
It has been a challenge for everyone to service residents with work orders, but owners have managed to reduce maintenance requests and streamline the system in order to maintain social distancing measures while still servicing customers’ needs. One perk of living in a garden-style walk-up community versus a high-rise apartment tower is there are fewer touch points — a layout option more residents are seeking to limit their risk and exposure.
New cleaning practices and repair protocols will remain high priorities for owners and tacit expectations from renters and will certainly evolve as we adjust to our new reality.
Great Outdoor Amenities
Not only has COVID-19 altered the way apartment owners and managers clean and operate, it has also spotlighted the need to temporarily close communal amenities like business centers, lobbies and gyms to stop the spread.
As stay-at-home orders have restricted residents’ extracurricular activities and travel plans, we’ve seen residents rethink the way they spend their free time; therefore apartment owners and managers have had to rethink their amenity spaces.
Residents are embracing a more active lifestyle and value spending time in nature; many even feel safer outside. In response, we’re seeing outdoor exercise workstations, putting greens, resort-style gaming areas, fire pits, grill stations, soccer fields, bike-share concepts and walking trails becoming more desirable. However, as the colder months approach, this may present a challenge for local owners and managers, so it’s important to keep in mind that many people will seek to be inside during the winter.
While many apartment owners will still maintain traditional amenities like gyms and business centers that are expected at Class A apartment communities, we should start to see the implementation of more outdoor activities as part of amenity packages.
All owners and operators will have to take a look at current offerings at their communities and continue to adapt to the “new normal” of the future. The ability to safely experience the great outdoors with social distancing top of mind is a trend that’s here to stay.
Moving Forward to Thrive
The pandemic has had an adverse impact on the entire globe and will forever affect how people live, work and play. As housing is an essential business, we have a responsibility to prioritize the safety and well-being of all of our residents, not only during a pandemic but also throughout their entire time living in our communities.
We must continue to stay strong and adapt and act every day to meet the new demands and standards of leasing, operations, cleaning and amenities in order to best serve our communities.
It’s equally critical to reflect on the key learnings from the pandemic so that we can pivot, adjust and adapt, and ultimately emerge stronger and better with our new insights from this crisis and forge a bright future ahead.