With much talk surrounding multifamily investment trends, many are left wondering what is happening at the property level. Irvine, California–based Western National Property Management, the residential real estate management arm of Western National Group, currently oversees the management of 23,600 apartment units in 162 communities throughout Orange County, the Inland Empire, Los Angeles, Northern California, and Las Vegas. SoCal Real Estate spoke with Cindy Wick, regional VP of the firm, about property-level trends as well as what multifamily owners and managers can expect for the remainder of 2018.
SoCal Real Estate: What property-level trends are shaping the multifamily market in 2018?
Wick: With multifamily vacancy rising to 4.7 percent in Q1, now is the opportune time for property owners and managers to focus on the amenities that will set their multifamily community apart from the rest. Convenience-focused amenities are in particularly high demand. Because Millennials continue to dominate the market, property owners and managers are implementing various app-related services to make life easier for their residents. For example, properties are increasingly beginning to provide residents with services such as valet trash, laundry and dry cleaning, and grocery delivery, all of which can be requested with the press of a button.
Are you anticipating any shifts that might affect these trends?
As Gen Z begins to enter the renter pool, a slight shift is occurring, as technology-based amenities and services rise in demand. While Millennial renters helped set the tone for convenience-focused and digitally integrated properties, Gen Z is taking this a step further. Because this new generation grew up completely immersed in technology, they crave a convenient and high-tech lifestyle. Multifamily owners can appease Gen Z residents by ensuring that properties are digitally connected and offer the very latest in technology-focused services. For example, while many properties already provide the option for potential residents to apply online, multifamily owners might consider implementing more advanced technology to stand out among the competition.
Shopping for apartments is another place where innovative technology can help a property stand out. Companies such as Matterport offer virtual reality tours of apartments, giving potential residents a fresh, tech-focused way to see all that a property has to offer.
How can property owners/managers continue to attract varying renter demographics?
To appeal to today’s diverse pool of renters, property owners and managers must pay close attention to regional trends and interests. Geographic location plays a major role in resident demographics, and many multifamily communities are home to a wide range of renters, from Baby Boomers to Gen Z. To cater to each generation, managers and owners must think strategically. While Millennial and Gen Z residents may demand amenities such as keyless entry, free WiFi, and USB ports throughout the property, Baby Boomers are more concerned with communal space and upkept landscaping.
Property owners and managers need to find the right mix of amenities for each generation’s needs. While this is not a perfect science, the more owners pay attention to resident mix and demographics and implement strategies to meet resident needs, the more profitable a property can become.
What are your projections for the remainder of the year?
Despite rising vacancy, we expect that the multifamily market will continue to perform well in 2018 and beyond. Rent growth remains strong, reaching 2.3 percent in Q1, which represents a healthy ongoing demand for apartments.
Moving forward, technological advancements will continue to be integrated into multifamily communities. The renter pool will continue to evolve, and more Gen Z renters will enter the market, creating a greater shift in demand for owners to navigate.
Property owners and managers who work to stay ahead of these ever-changing trends, embrace new amenities, and work to accommodate the needs of their specific residents will be able to increase resident satisfaction and retention, ultimately maximizing NOI for the long-term.