Credit: Jack Hornady

Scott Duckett is the executive vice president and chief business development officer for Austin, Texas–based Campus Advantage and has 35,000 beds under management in and around university and college campuses in 18 states, putting him in a somewhat qualified position to handicap the multifamily market-rate winners and losers of the next decade. Expecting droves of those 80 million Gen Y renters? He’s already got communities full of them, and here’s what he knows: Having a green-certified community isn’t going to cut it. If you want the renters of tomorrow, green might help you get there, but it’s technology that will put you over the top. “We’re designing properties with built-in iPod and iPhone docks in the units, the buildings are all hard-wired (did someone say 1G per second?), and then also boosted with wireless overlay. You need high-tech fitness centers and, above all else, powerful cell reception,” Duckett says. “With technology changing as rapidly as it does, staying on top of that is critical, and buildings that lack the infrastructure necessary to use today’s technology are going to be at a market disadvantage.”

Not that Duckett’s warnings aren’t being heard on the market-rate side, but as the good times begin in terms of rent performance and NOI growth, investments into areas without an obvious link to revenue are sometimes overlooked. According to data from the National Multi Housing Council (NMHC), apartment firms are at least incrementally upping the ante when it comes to technology investments, spending 0.95 percent of gross revenue on IT initiatives in 2009, an increase from 0.7 percent in 2008. The NMHC also found that spending on discretionary IT projects and consultants dropped during the recession, while outsourcing IT nearly doubled from 12.6 percent in 2008 to 23.63 percent in 2009.

That could be a critical mistake when it comes to the greater demands of Gen Y renters, particularly when coupled with their demonstrated willingness to blog, Facebook, and tweet about anyone who doesn’t meet those demands. “When renters come out of student housing these days, they have certain expectations regarding what is going to be delivered,” says Doug Bibby, president of the Washington, D.C.–based NMHC. “You’ve got [tech] amenities in student housing that are just now starting to transfer over to apartments in general.”

When it comes to green, continued investment in sustainability seems to be edging toward the norm, particularly as codes begin to boost energy-efficiency requirements and operators see ROIs on green initiatives proving out amid lower up-front costs. “In many major urban markets, the building codes being implemented by the cities are requiring a standard of energy that is good enough already,” says Steven Fifield, chairman and CEO of Chicago-based Fifield Cos., which spent $3 million on a LEED Gold certification for Alta, the firm’s latest, 848-unit Windy City high-rise. “So over 848 units, you have an investment of around $3,500 a unit. If these developments cost $300,000 to $350,000 per unit all-in cost, what’s spending 1 percent?”

Even if your residents aren’t likely to pay for it in rent. Three separate studies at Campus Advantage have shown that while students will choose a green building over a conventional building at the same price point, they will not pay a premium to go green per se. Duckett says no matter: There’s already tremendous payoff from lower utility costs translating into a higher NOI, regardless of what certificate is on the door for residents to look at. More important is that those same residents see full bars on their phone and can download an episode of Boardwalk Empire while lounging out by the pool. “I don’t know that the market has to meet the demands and expectations of these residents,” Duckett says. “I just think that the wise investors who choose to meet their demands will be establishing much greater market share within what I ­believe will be a new paradigm for multifamily rental housing.” —C.W.