Multifamily Industry News and Trends

A very long time ago (circa 2008) the leasing world was a simpler place. Place an ad on Craigslist or in a newspaper, and sit back and watch the renter leads flow in. The most complicated it ever got was when you wanted to add a template to Craigslist. Those were what I would call "the good old days."  Flash forward ten years and the leasing world could not be more complicated. From ILS sites, listing syndication systems, Social Media, Blogs, Google Adwords, Remarketing and more, there are numerous marketing channels to choose from. However, there is one area that could be the most important, but seldom gets the attention it deserves, Search Engine Optimization (SEO). Curiously most apartment communities either don't think SEO can have a significant impact, or are dissuaded by trying to compete with the "big boys." Whatever the reason, SEO needs to be the next step in your apartment communities marketing efforts.  What is Search Engine Optimization (SEO)?  Search Engine Optimization is the process of building a strong search engine presence to ensure visitors can more easily find your website amongst all your competitors online. The primary aim is to improve your websites page ranking so that renters will see your website when they type specific keywords or phrases into search engines like Google.  In simplest terms, it's getting your website to the top of search engine results for searches that your renters conduct (i.e., apartments in Charlotte, rentals in San Antonio, etc.) Why is Search Engine......

With April showers comes new rental housing legislation. Among bills proposing rent control, additional rental housing development funds, and new eviction procedures, Californian legislators are anxious to reform old rental housing regulations and create new requirements. While the majority of this year's proposed laws are still on the chopping block (for better or worse), if passed, these bills will significantly effect the rental housing industry in California.    IN EFFECT: Water Saving Fixtures (SB 407) Be aware that the deadline to switch your plumbing fixtures to meet California’s water-saving standards is January 1, 2019. This applies to pre-1994 multifamily housing and is a part of SB 407, which was passed October of 2009. PENDING: Accessory Dwelling Units (SB 831) SB 831 eliminates some of the regulations and fees regarding accessory dwelling units (also known as granny flats or in-law units). These include eliminating all local agency, school district, special district and water corporation fees, requiring an accessory dwelling unit application to be automatically approved if a local agency does not act within 120 days, and allow for the creation of an accessory dwelling unit on lots with existing or proposed homes. If this bill passes setbacks will be no greater than 5 feet and create an amnesty program that would ease the permitting process (active until 2026). PENDING: Withholding Transportation Funds until Housing Quota Met (AB 1759) This bill would require each city or county to meet the minimum housing production goal (as is written in their general development plan) in order to be e......

Commercial Brokers International CEO, George Pino, breaks down commercial real estate's first quarter marketplace. He also looks into his crystal ball for predictions of what is to come in the rest of the fiscal year. Stayed tuned. Feel free to contact him.

Last year alone, Americans spent a staggering $485 billion on rent, a record high. Factors such as the youngest generation of renters carrying heavy student debt and increased construction can be pointed to as obvious markers for the sharp increase, but the growing rent purse also suggests that a shift in the renter demo is currently taking place. Below, we discuss the evolving American rental demographic to inform how apartment communities across the country can prepare themselves for the continued uptick in numbers over the next decade.   The Rise of the Renter More Americans are flocking to rentals than we’ve seen in decades. With the housing crisis still in the not-so-distant rearview mirrors of millions of Americans, more U.S. households are headed by renters than at any point since 1965, according to a Pew Research Center analysis of Census Bureau housing data. While recent trend pieces point to historical data suggesting an upcoming stagnation in the apartment market, with nearly 39 million Americans (1 out of every 8) calling apartments home, it’s becoming increasingly difficult to refute the demand for apartments.   A Stagnant Income While more Americans are flocking to rentals than ever before, the median income of an apartment household has fallen by $3,000 since 1985. Couple this with an overall stagnation in income for many households, and you have a mixture worth keeping an eye on. After adjusting for inflation, wages are just 10% higher in 2017 than they were in 1973, amounting to real annual wage gro......

In 2017, our Online Renter Study determined that social media was not a key influencer with renters.  During the search for a new home, only 14.1% of renters said they used a community’s social media page as a source for information.  And when asked if the community’s social media presence factored into the overall decision to lease, the consensus was “no”; placing social media at #46 out of 48 in terms of importance.  So, if social media holds little value for prospects, does the same hold true for existing residents?  Our Annual Satisfaction Survey helps connect the dots even further.  We know, based on 1.6 million survey responses, the #1 driver for resident satisfaction is perception of value.  Bottom line, residents want to know they are getting their money’s worth where they live.  But what drives value?  What are the things teams should focus on to convince residents to accept a rent increase and stay another year? Perception of value is tricky because value itself is subjective.  Consumers in general would gladly pay more for certain purchases because in their eyes, it’s worth it.  Whether that is a certain brand of coffee or the top of the line SUV, price is only an issue in the absence of value. Every 6 months we examine the correlation between the survey questions of our Annual Satisfaction Survey and perception of value. After our most recent analysis, we were surprised at the results.  The #2 driver for perception of value was social media.  What stunned us ......

By George Pino From demographics to understanding the permitting and planning processes of each city, there is much to consider when foreign companies look to expand into America. We’ve all heard it before… “The American Dream” and “America the Land of Opportunity.” We have heard it so often that it has all but become a cliché; however, it would seem the entire world has heard the saying and in many ways have taken it up as a call to action. Over the last decade, we have seen an unprecedented amount of foreign investment into the United States, not just in dollars, but in companies looking to expand into different markets.  For many foreign companies, the US has become their “emerging market.” Although the recipe for the American Dream is easier than in most other countries around the world, it still does require hard work, persistence, and a little luck.  For foreign companies and concepts looking to expand into America must also keep in mind other pitfalls, especially when it comes to commercial real estate and leasing. First and foremost is the securitization of the lease.  Many times a newly formed US-based subsidiary looking to lease commercial property may not have independent financials, credit history, or significant assets in the US. This may lead to some landlords requesting guarantees from the foreign parent.  Although this sounds like a pretty easy and straight forward solution many landlords will not accept a foreign entity to securitize a commercial lease as they are concerned about the collecta......

The Affordable Housing Act which was presented by Assemblymembers Richard Bloom and David Chiu as AB 1506, died in the Assembly’s housing committee earlier in the month. Now a new proposed ballot measure plans to repeal the 1995 Costa-Hawkins Rental Housing Act. Costa-Hawkins Act, the state law which more directly effects 5 of the 15 California cities with rent control, applies to large housing developments built prior to 1995 and does not include single-family homes, condos, and duplexes. Currently, in these markets, the landlord has the right to raise rents upon a tenant moving out and second, prevents the capping of rent on units constructed after February 1995. In Los Angeles City, rent control is applied to units constructed prior to October 1979, under the Rent Stabilization Ordinance, and yearly increases are capped at 3 to 8 percent (as set by the Rent Control Board) for the controlled units.   As a self-described union for renters, the Alliance of Californians for Community Empowerment (ACCE), filed the paperwork along with Michael Weinstein, President of AIDS Healthcare Foundation. Citing that California is facing a growing demand for affordable housing, a rise in homelessness and the historic housing crisis is pushing out low- and middle-income renters out, at times even in cities with some rent control. Supporters like the ACCE, say they have been gathering signatures easily, as people are expressing enthusiasm for the proposed November ballot. They have already collected 100,000 signatures, of the total 365,880 signatures needed by June to qualify for the ballot.   Critics like the California A......

  Blockchain is an emerging technology which will transform the way we buy, sell and lease real estate. “A blockchain is a digitized, decentralized, public ledger of all cryptocurrency transactions. Constantly growing as ‘completed’ blocks (the most recent transactions) are recorded and added to it in chronological order.  It allows market participants to keep track of digital currency transactions without central recordkeeping. Each node (a computer connected to the network) gets a copy of the blockchain, which is downloaded automatically. Originally developed as the accounting method for the virtual currency Bitcoin, blockchains – which use what’s known as distributed ledger technology (DLT) – are appearing in a variety of commercial applications today. Currently, the technology is primarily used to verify transactions, within digital currencies though it is possible to digitize, code and insert practically any document into the blockchain. Doing so creates an indelible record which cannot be changed; furthermore, the record’s authenticity can be verified by the entire community using the blockchain instead of a single centralized authority.” (1) Real estate will not be passed over when it comes to the blockchain disruption either. There will be a need for education in order to transition from the current standard analog norms into the digital space for high value assets such as real estate. Blockchain technology introduces smart contracts on its platform. This allows assets like real estate to be tokenized, and be traded in the same vain as cryptocurrencies, like bitcoin and others. You will be able track all information on real estate,......

Having your tenants pay their rent on time is key for successful investing; incentivizing them to pay can sometimes be worthwhile. Here are a few ways that we have found to be the most effective. Incentivize them to pay early by offering a discount Let your tenants know that if rent is paid in full on or before the first of the month, they can deduct a certain discounted amount.  If they chose to pay rent after the first of the month, the standard rent is due.  Always be sure your offering is clearly defined so there is no confusion.   Have a point system that allows for upgrades. Create a system for each time they pay on time they receive a certain number of points toward an upgrade ie: accent wall, new flooring, or maybe a gift card to home depot for their unit.   Offer A Community Drawing Every Few Months Create a system that when they pay their rent on time they receive a token/ticket of some kind to throw into a drawing. Individuals who have more tokens/tickets will have a better chance of winning over someone that doesn’t.   Make It Easy For Them To Pay The easier it is for them to pay the better, online or automatic payments simplify the process.   Send Reminders Sometimes, a tenant misses a payment because they’ve simply forgotten the exact date that rent is due. Send your tenants a gentle monthly email reminder a couple days prior to the ren......

Apartment staffing can be tricky business. Over the years, I have managed and hired hundreds of Leasing Agents. It can be tough trying to find the right candidate. Early in my career, I made many mistakes when it came to hiring.  Some candidates I thought would be great turned out to be all talk and no action, while others who I thought we be just “ok,” turned out to be excellent employees.  But one of the biggest mistakes I made was presuming that because a candidate was “nice,” that they would be a great Leasing Agent.  However, what I found is that while “nice” individuals are perfectly acceptable, all of the “great” leasing agents I ever hired were very “kind” people.   What's The Difference Between "Kind" and Being "Nice"? It's a common misconception that being "nice" and being "kind" are the same thing. People tend to confuse the two. They are in fact two separate traits that can make a big difference in an employee's performance.  Individuals that are "nice," tend to be very polite, are well-liked, show common courtesy and are very personable. Most of the agents I come across fall into this category.  On the other hand, "kind" individuals are the ones that always show empathy for others, try to help wherever they can and always seem to put other people's interest above their well being. This shows in their sales techniques (i.e., connecting with renters), their role within the organization, their willingness to help fellow employees and most importantly, t......