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The Demand Solutions Blog

The Demand Solutions Blog is written by multifamily industry experts specializing in pricing and revenue management, demand generation, sales and technology and industry trends.

From Imagination to Implementation – MICA in Review

MICA II 2019 (8 of 53)

As long-standing supporters of the annual AIM conference in Southern California, we had been looking forward to the launch of its south-eastern sister conference – MICA (Multifamily Innovation Conference Atlanta) – which took place last week.

The inaugural MICA event promised a showcase for innovation in one of the nation’s multifamily industry hotbeds, and it didn’t disappoint. An impressive crowd experienced a program that ranged from the creative, cutting edge of marketing to the nuts and bolts of implementing the innovations that residents are increasingly expecting of multifamily providers. 

First, the “Wow Factor” 

Day One featured – amongst other things - Frederik Eklund, uber-successful New York residential real estate broker and the star of Million Dollar Listing. Besides bringing some much-appreciated stardust to this new meeting, Frederik shared insights into brand-building in the New York luxury real estate market.

The themes are familiar: beyond location, location, location, high-end buildings are increasingly using hospitality-like services and experiences to attract buyers. The discussion on stage was punctuated by some quite beautiful examples of websites for multifamily properties. The content reminded us of the ways that immersive, persona-based branding is helping to establish the lifestyle experiences that attract today’s discerning residents.

Interestingly, the discussion turned at one point to self-show, and its appeal relative to current leasing experiences. A show of hands revealed that only one company represented in the audience was currently inviting prospects to conduct an unaccompanied tour. Those following this area of multifamily technology will be unsurprised to learn that it was a single-family housing company. 

(Sidebar: The dispersed nature of single-family portfolios has forced the pace of innovation in this sector - multifamily operators should take note!  We will return to this subject in the coming weeks). 

Short-Term Rentals Continue to Excite

If day one majored on marketing experiences, day two took an admirably practical focus on how to deliver some of the most popular innovations currently at play in the industry. The first two panels of the day gave short-term rentals (STR) the degree of detail and expertise that this burgeoning topic demands.

The first discussion, which included representatives of WhereIPark, DayDream, WhyHotel and Airbnb, focused on the varying circumstances under which it makes sense for properties to make inventory available for the sharing economy. WhyHotel, in particular, provides an example of how an innovative business model can solve a specific problem. Where units are being built faster than they can be leased (think high-development areas, for example), operators can switch temporarily to selling units as hotel rooms.

The second panel focused on the underwriting of STR income. As a long-time pricing geek, I have always seen STR from a pricing perspective – i.e., as a demand segment that can fill units at times when conventional demand is soft, and sometimes deliver a rent premium. This was nicely characterized as “fracking” by Eric Broughton of Expedia (now a player in multifamily through their acquisitions of Pillow and ApartmentJet last year).

The analogy to the unconventional gas industry resonates for a number of reasons.  It is revolutionary and has been made easier by some new processes and technologies, of which Pillow/ApartmentJet are examples.  Moreover, and most importantly, it frees pockets of value that were previously inaccessible.

As we have discussed previously on this blog, the involvement of Expedia in STR technology is all about finding ways to make more inventory available for its distribution channels.  As Eric shared a proforma sheet designed to capture all of the costs of STR units, we see the value-add of Expedia in helping owners and operators to exploit this opportunity.

In closing, one panelist shared the view that property managers will increasingly need to have an STR solution when they pitch their services to ownership.  It is an increasingly common and important question, and it is now safe to assume that competing operators are using their STR approach and expertise as a way to win new business.

A Great Inaugural Success

MICA offered more talking points than these – an excellent discussion of smart home technologies covered the customer experience, technical and legal considerations of this exciting breed of technologies. A reverse-speed-dating session gave attendees the ability to get close and personal with nine new services in small group discussions – an efficient use of time.

Overall, MICA delivered a high-quality discussion of highly-relevant content that engaged the audience throughout the program. We thank the Joshua Tree Conference Group for adding the show to the annual schedule and look forward to furthering the discussions that began in Atlanta last week.

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