LOS ANGELES, CA / ACCESSWIRE / July 13, 2018 The multifamily sector needs to embrace innovations that are already in place across several other industries. This will allow the industry to shield itself from the risk of intermarket forces more effectively than it is doing today. After developing over $2 billion of multifamily in Los Angeles through multiple cycles, I've witnessed the evolution of multifamily demand. Today's renters aren't just looking for a place to "hang their hat" — they're looking for experience and innovation. Below are two ways multifamily developers can prepare for the renter of tomorrow:
Invest In The Customer Experience
Firms operating in the multifamily sector need to take steps to keep up with the revolutions that are already being implemented heavily in other industries such as transportation, retail, demographics and psychographics. Today, we have a population of renters that is aging and growing more diverse more quickly than any other time in history. Therefore, in order for our industry to stay viable, we need to adapt and build to meet the needs and desires of future residents.
Specifically, one area we must focus on is projects with service amenities that embrace the shared economy and on-demand living. One study found that 80% of customer satisfaction within the targeted apartment communities came from socially-oriented and service-oriented amenities. More amenities led to a 5.1% premium increase over projects with fewer amenities and a 5% increase in lease-up. However, too many social amenities had diminishing returns and actually decreased the price per unit in a sale. In summary, today's renter will place a premium on experiential living.
In addition, I have also found that consumers do not exactly have a clear definition as to what the term "innovative" actually looks like in an apartment setting. In fact, I believe that many residents have immense difficulty describing what an innovative and futuristic apartment would look or be like. The top two improvements I believe developers should make to apartment layouts for residents are the convenience of the living space and the convertibility of rooms that would allow tenants to transform their space to meet their particular and often temporary, needs.
Embrace Innovation And Smart Home Technology
While I believe that several million apartment units will need to be added to the Los Angeles stock over the next decade or so, anything being built today will not see its first resident until at least the early 2020s. Scott Walter, a former colleague of mine and a Los Angeles multifamily developer, told me that developers must be extremely anticipatory, progressive and innovative to survive the changing market forces that will emerge over the next several years. Scott believes smart home technology will not only reduce his operating expenses but also increase customer retention and is developing projects utilizing smart home technology, flexible lease terms and micro-unit layouts to attract different demographics.
SOURCE: NMS Properties, Inc.