How Multifamily Pandemic Investments Are Changing the Industry Forever
Like any industry, residential building operators saw their entire work lives change in a matter of weeks at the onset of the pandemic. There were obstacles aplenty. Managers had to adjust to working with smaller property management teams—or in some cases, with teams almost exclusively offsite—while dealing with higher occupancy levels than ever. There was also a lot of turnover to deal with. A recent survey by Entrata, a multifamily property management software provider, found that COVID-19 had a significant impact on nearly half (42 percent) of renter's short-term housing plans, including the need to pursue cheaper rental accommodations or move in with relatives or friends.
To help overcome these new challenges property companies found ways to adopt technology into their workflow and maintain their operations. These same investments that are helping building managers get through the pandemic will also pay dividends in the new normal that we will eventually be entering into—whatever that might be.
Tour yourself
"Pivot" became a regular part of the vernacular in the rental-housing world, as property teams clamored to find new ways to offer tours without the benefit of an accompanying leasing agent. Pegasus Residential, a third-party apartment operator, fast-tracked several new processes, including the utilization of self-guided tours. They were able to help keep both the residents and the leasing agents properly distanced by using apps to verify IDs upon arriving at the community and receive a code to open a lockbox with a key inside.
"Thankfully we started investing in technology pre-COVID," said Yakov Belousov, executive director of operations for Pegasus Residential. "We saw an opportunity to show apartments at times when our onsite team was super busy, or during times when the office was not open." This new ability became invaluable once the world locked down.
Shortly after deploying virtual tours Pegasus realized it was closing more leases with the new tech than without. One of the keys for adoption, the Pegasus team realized, was the ability for their platform to be flexible to how the user wanted to access the tours. They needed to be able to support desktop, mobile, Apple, Android, even Facebook. Now their leasing strategy post-COVID will have virtual and self-guided tours as a central part of it.
Screen machine
With apartment hunters often arriving at the property solo and performing a remote check-in process for a self-guided tour, the onus on ID verification became amplified. Pegasus Residential relied on a quick-scan platform to verify identity, income, and other pertinent background information.
The company also leveraged automated application processing in a forensic-type analysis of the applicant. When a prospect provides proof of employment, the platform can verify whether it's legitimate. Pegasus used both of these products pre-pandemic, as well, and then rolled them out at a large portion of the portfolio afterward.
It was part of an industry-wide effort to expedite the verification process. Several additional apartment operators—including Greystar and RangeWater Real Estate—have made use of verification technologies which combine screening and data-collection measures into the application process for quicker results.
Learn as you go
Pegasus Residential started a lease-up on a new building during the height of the pandemic and attempted something a little different. The company utilized remote leasing consultants hundreds of miles from the office and, remarkably, was able to secure several leases from afar. With fewer onsite associates, Pegasus exhibited an increased reliance on AI-fueled products, including chatbots and Alexa-style virtual assistants.
"Since it's an AI, it is continually evolving and learning," Belousov said. "So as our prospects call and ask questions, the AI is gathering data as it chats with them and is continually improving. People chatting with the AI often have a hard time realizing they are talking with an AI. And prospects always have the option of saying that they want to speak with a live representative."
The industry has also experienced an uptick in the use of interactive maps that help teams observe the property in a more granular fashion. Old-school spreadsheets have been eschewed for map-based visualizations that highlight critical metrics and foster better decision-making. Maps as a service help prospects understand their location within the community while on a self-guided tour. They help delivery drivers—and more importantly, first responders—find the correct unit.
When paired with AI, these 3D maps provide key metrics that were previously unavailable in the industry. For instance, properties can determine which types of residents are more likely to utilize a property's ancillary services. They can gain insights into unique property trends, such as whether mountain views or proximity to the pool are more enticing to renters, and use the insights to drive premiums.
"The demand for map-based insights skyrocketed in 2020, as the rental-housing industry had to make astute decisions through the chaos. With insights such as which residents are more likely to rent storage units or why two-bedroom homes on the south side of a property are more sought after, properties have the ability to more effectively price their homes and ancillary offerings."
Founder & CEO, Engrain
Communication station
As a third-party operator, Pegasus Residential does not own the communities it manages. To effectively communicate with property owners, the company developed an app to relay the latest pandemic-related changes to ownership groups in swift fashion. Pegasus had to sharpen its communication tactics with residents, as well. The team made use of a number of technologies to provide pertinent updates, enable residents to submit service requests, pay rent online and perform other community-related tasks.
"This was super helpful, because during the height of the pandemic we wanted to make sure we were being very careful with how we interacted with our residents," Belousov said. "We made certain to be respectful and understand that certain residents didn't want us in their apartments to complete service requests."
As such Pegasus often used video to interact with residents and help them through some of the simpler service requests. The company also made several quick how-to videos for simple maintenance tasks and would drop off replacement products at the door.
Additionally, Pegasus assisted residents directly impacted by the pandemic by providing resources for local rent-relief programs. A designated resident ambassador would reach out and provide programs to consider. For instance, 24 rent-relief programs were available in one Texas municipality.
Students become the teachers
The student housing industry has the yearly challenge of onboarding and communicating with new residents—renters are there for the school year and then gone in the summer. When things were thrown into turmoil last March, the offseason started a bit earlier.
"To us, this was just an expansion of what normally we do when the spring semester ends and the majority of students return home," said Jonathan Jeans, vice president of operations for B.HOM Student Living. "So we just had to ramp it up and get accustomed to the fact that we were going to have to leverage everything within our means more than ever before—text messaging, DMing people on Instagram, and other forms of technology to really keep them engaged as institutions were ending even earlier due to the pandemic."
B.HOM also pushed residents to adopt the onsite resident portal and experienced a sharp spike in usage. Communication became more vital than ever with local health guidelines updated regularly—sometimes on a daily basis—and with offices limited or completely shut down. B.HOM had the challenge not only of communicating with residents but also parents and associates, so all communication techniques were needed—both online and in-person.
"One other thing we realized with everything being remote, restaurants, gyms, and everything else, everyone was getting a wave of texts and emails, as well as ads on social media," Jeans said. "So in addition to our digital efforts, we took it back to a grassroots concept and just called them. What we realized is that people were so much more open to taking a phone call during these times, after getting bombarded by texts and emails from many different businesses."
It was a counterintuitive approach, but it worked. Remarkably, leasing performance at B.HOM was strong heading into 2021 and delinquency rates were decreasing compared to the start of 2020.
Overall, apartment operators appear to have done a commendable job in response to the pandemic. The Entrata survey indicates that 82% of renters were satisfied with management's overall response to COVID-19. The percentages of those dissatisfied with management's overall communication (33%) and overall safety measures (45%) were higher, but still less than half.
Those multifamily operators that invested in technology—and those able to effectively fast-track implementation of new platforms—most likely outperformed the rest of the pack in 2020. Odds are, they are a leg up on the competition in the early stages of 2021, as well.