Here’s What’s Different About Owning Multifamily Now

Multifamily property ownership and management looks radically different in a post-pandemic landscape than it did just a few short years ago, industry experts at this month’s GlobeSt Multifamily conference agreed – and many of the changes are likely to persist.

“COVID has been a game changer for multifamily because it’s changed how people lived their lives,” said  Roger Daniel, president of Daniel Management Group Inc, adding that “the post-COVID landscape has made multifamily more valuable than ever.”

“People are spending more time in apartments,” he said. “There  may have been a dip in some rents for awhile, but most markets are at or above what rents were prior to COVID.”

Josh Welch, COO at Three Pillars Capital Group, said building a strong sense of community has become even more important following COVID, particularly in regions where lockdowns persisted well into late 2021.

“Everyone lost a lot in COVID,” Welch said. “We found you can really create value in communities by bringing people together. We can make up for a lot of that lost time and get good renewals and a good community. We view apartments not as a temporary place to live but a place to belong – so we want solid people who will continue to renew, and pay the rent increases. That’s why we’re pushed on getting the communities back to normal.”

In the throes of lockdowns, owners and managers were forced to contend with rent collection issues and helped residents navigate the various rent relief programs available at a local, state and federal level. Michele Hrivnak, managing director asset management at IMG, said her organization collected $3 million in rent relief over 5,500 units, an amount she said was “very significant.”

“We had to get good at walking people through these relief forms,” Welch said. “It really forced us to lean heavily on tech and leverage the tools available that we didn’t have to use before.”

That includes online collection tools, which Welch said was helpful in getting residents in Class B and C properties in particular to pay on time.

Staffing will continue to be a challenge, according to Welch, who says his company has “definitely outsourced more” post-COVID, including in the maintenance and housekeeping functions.

“That was eating us alive,” he said. “We’ve found it’s better to outsource that piece and run a lot leaner that way.”

Hrivnak said one of the lasting impacts of COVID will be enduring changes in how prospective renters view and tour properties.

“At first, we had to grapple with this idea of self-guided tours and how to use tech to communicate with renters,” she said. “As it’s sticking you’re seeing two separate groups of renters – the ones that want to come back to leasing office immediately and some that are like, thank goodness I don’t have to go back and see a leasing agent. I see that staying in place.” 

And as for work-from-home, “it’s going to stay,” Hrivnak said. “Zoom rooms in common area spaces sound like a great idea, but you still have to get ready and get dressed and go out there. So there will always be a need for desk space in apartments.”

Marketing will also continue to be incredibly important for owners, panelists agreed.

“It’s all about marketing,” Hrivnak said. “It’s how are we really target marketing the 25 year olds, the Gen Z residents, and are we utilizing a lot of influencer campaigns on Instagram and TikTok. As an industry, we’re still touring units like it’s 1982. That’s not interesting. So it’s about how do you differentiate yourself, and if you’re not in a Class A highrise, can you make it fun.”

And despite a gloomy economic backdrop, panelists also agreed that rent increases will likely continue to be the norm.

“We’ve been pushing rents so we’re still seeing increases,” Hrivnak said. “We are doing solid renewal increases. If you have all the amenities and your comps don’t, someone is not going to move for a 5 to 10% rent in some markets.”