Following 2020 and 2021’s historically low interest rates, the steep climb in mortgage rates that began in March 2022 contributed to a cooling multifamily market. And despite 2023’s continued mortgage rate fluctuations, many real estate professionals remain optimistic about the state of multifamily markets today, thanks in part to the positive gross income growth anticipated this year.
There are a few contributing factors to this positive market outlook to consider. Remote and hybrid work have proven their staying power, which has encouraged renters in high-priced urban market to relocate to less populated areas — often at the benefit of more space and more competitive rent. At the same time, positive job growth in major metropolitan areas has contributed to increased demand for multifamily rental property units. Amidst these fluctuations in consumer interest, one fact remains certain: multifamily properties will have to reimagine how they attract and retain tenants.
In today’s multifamily market, the key is to elevate the tenant experience by rethinking condo and apartment amenities and layouts, taking service to new levels, and prioritizing multifamily maintenance.
1. Reconsider Your Amenities
Although the safety regulations introduced during the COVID-19 pandemic have mostly expired, these guidelines are still reshaping the expectations tenants hold for the places where they live. Spurred by heightened awareness of cleaning protocols and best practices, health and wellness continue to be leading priorities for multifamily tenants.
While some properties have added air filtration systems, antibacterial countertops, and ultraviolet lamps to their amenities, your baseline cleaning regimen — including vacuuming hallway floors, tending to trash, and dusting common areas — is still vitally important to get right. Your management team should additionally consider how you can keep high-trafficked shared spaces and amenities clean and hygienic, as these are the areas of your properties that are most likely to accumulate dirt, debris, and germs.
In addition to building cleanliness, smart connectivity systems, from digital locks to smart thermostats, also remain a leading demand for multifamily units. These technology solutions are quickly becoming a mainstream expectation, and coupled with the steady popularity of remote work, will require developers to prioritize WiFi and 5G connectivity. As residents have increasingly used delivery services for groceries, medical supplies, and other personal packages, smart delivery locker systems are another high-demand tech amenity that can set your building apart.
2. Rethink Your Layouts
To meet the demands of today’s tenants, multifamily property owners and management teams will need to re-envision what their properties can and should look like. Many COVID-era buildings created layouts with social distancing in mind, including touchless elevators, partitioned common areas with more private lounges over massive gathering spaces, and separate entrances. But in 2023, potential tenants are seeking living spaces that are flexible, multipurpose, and communal.
Remote work may have skyrocketed in popularity during the pandemic, but 2023 estimates show no signs of the work-from-home trend slowing down. In fact, Gartner estimates that nearly 40% of knowledge workers (high-level workers whose job is to “think” for a living) will work hybrid in some capacity by the end of 2023. That’s why remote-friendly spaces and layouts to accommodate home offices have become critical differentiators. Some developers are swapping out entertainment amenities to provide coworking spaces. Others are simply outfitting existing space with greenscreens or nooks that support workstations.
Additionally, easing COVID restrictions means that many tenants have renewed their interest in connecting with other members of their community. Outdoor community spaces, such as pickleball or tennis courts, are having a resurgence in popularity, while indoor wellness centers — including saunas, meditation centers, and yoga studios — encourage residents to connect with others and prioritize their personal wellbeing.
3. Reorient Your Approach to Service
While multifamily developments may not compete with homes sales or rentals on space, they have a tremendous competitive edge when it comes to service.
Multifamily Executive reports that the demographics moving into condos and apartments today are more laser-focused on work. As a result, they want to spend free time doing activities they enjoy, not chores. Adding apartment amenities meets this trend partway. However, multifamily properties can also help alleviate the burden of chores by providing more supporting services for their tenants. AvalonBay Communities, for example, is partnering with local providers to help with everything from dog walking to house cleaning to laundry services.
Other property managers are providing these services in-house. To balance this demand on staff, many property managers turn to technology-based solutions to help free up their team members’ time. For example, commercial robot vacuums like Whiz and robotic floor scrubbers like the Scrubber 50 Pro can take on time-consuming cleaning tasks, freeing staff to tackle new value-added services that elevate the tenant experience.
4. Reprioritize Multifamily Maintenance
Aging rental units were facing a $45 billion repair backlog according to a 2019 analysis by the Federal Reserve Bank of Philadelphia and PolicyMap. Nearly 40% of renters that year lived in housing built before 1970. Harvard University’s Joint Center for Housing Studies notes that these older units are more likely to have structural deficiencies, pose health hazards, and lack accessibility features than newer units.
While local inspectors may focus on foundations and life safety features, tenants will be watching for features that include the cleanliness of typical condo and apartment amenities and the speed of maintenance response time. Response time, in particular, will be critical, since more individuals working from their condo or apartment homes (or your coworking spaces) means more maintenance calls.
Now is the time to set aside funds to address repairs and take routine maintenance to the next level. Managers that communicate the steps they’re taking to keep multifamily properties clean, healthy, and in good repair may be surprised to find how attractive routine maintenance can be.
Autonomous solutions, like Whiz, can help property managers communicate their commitment to wellness and tenant experience. As it quietly navigates common spaces and hallways, it’s a visible reminder of your commitment to tenant experience investments. Through the Whiz Connect dashboard, multifamily property owners and managers gain actionable data analytics-based insights on productivity, efficiency, and Whiz’s effectiveness. Through this data collection dashboard, you can give tenants visibility into cleaning operations and confidence in their environment’s health and cleanliness.
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