When Stamford, Conn.-based Collins Properties opened Hudson Park, a 560-unit luxury riverfront apartment development in Yonkers, N.Y., the firm wanted to provide a community for new residents. “It was really important that we create an environment where people could meet new friends and find someone to walk, run, or bike with,” says Rona Siegal, vice president of operations at Collins, which operates a $200 million portfolio of assets in the Mid-Atlantic. “In a new area, that’s hard to do.”
To help, Collins turned to LifeAt, a New York City-based social networking company that focuses on creating private, online communities for apartment, condo, and single-family developments. Now, with a user name and password, residents can log on to a customized LifeAt Hudson Park Web site and view profiles of other residents, check out items their neighbors have for sale, or peruse the neighborhood guide for the best local stylist or closest hospital. More than 60 percent of residents are registered on the Hudson Park site. “It’s our new electronic social director,” Siegal says.
In Texarkana, Texas, online social networking is having a similar effect at Legacy at Pleasant Grove, a 208-unit apartment community managed by Winter Park, Fla.-based third-party manager Epoch Management. Pleasant Grove property manager Sherry Cheek says resident interaction has increased since Epoch signed the community up with Houston-based AptConnect’s portal application this spring. “It helps connect us with our residents, and residents with each other,” Cheek says.
Indeed, as mainstream social networking sites such as Facebook have exploded across the Internet, the multifamily industry has followed suit, launching narrowly focused, property-oriented networks. But the portals—with their inherent connectivity benefits—also pose distinct liability and safety challenges.
Right on Target
The social networking movement is catching on with owners and managers eager to boost resident interactivity. Matthew Goldstein, CEO of LifeAt, says his firm has registered 410 condo, single-family, and apartment communities in eight states and three countries. AptConnect president Brent Williams said his firm had rolled out a handful of beta sites.
The reason for the growth is simple: Facebook and MySpace boast nearly 200 million combined users. Plus, marketers are eager to tap into those audiences—43 percent of all Internet users age 18 to 24 (also a target renter demographic) log on to social networking sites, according to JupiterResearch.
Internet listing service ForRent.com has created MySpace and Facebook pages aimed at culling those young prospects and others. The response has been strong. “We had about 2.3 million views in [one month] alone,” says Brock MacLean, vice president of national sales at ForRent.com. “It’s creating unparalleled exposure for our communities.”
Apartments.com also launched a MySpace community, which they intend to be a national lead generator. “Nearly 60 percent of MySpace users between the ages of 21 and 34 rent,” says Kevin Doyle, general manager of Apartments.com. “We’re able to get our listings in front of a very relevant, targeted group.”
A tight-knit circle
Beyond marketing, the real benefit of social networking sites might end up being resident retention. The logic is simple: Apartment residents who play together, stay together.
“The more residents are connected to each other and have a sense of community, the more likely they are to stay in that community,” says Jeanne Hulbert, a sociology professor at Louisiana State University who has studied social networks for 20 years and also works as a consultant for her Baton Rouge, La.-based firm Optinet Resources. “Owners who implement these kinds of networks are going to have longer-term residents and less turnover.”
Indeed, AptConnect’s Williams says retention is the first—and best—reason to launch a network. “When you create emotional ties between residents, that’s going to positively impact their decision to renew,” he says. “If someone has three or four good friends in the community … it’s like you’ve created an internal sales force that tries to convince them to stay.”
Still, concrete data linking social networks to resident retention is not yet available. But Goldstein says residents are eager to know their neighbors: “They want to have wine and cheese parties and play dates for their kids.”
Despite these benefits, there are also potential risks—especially when a friendly connection turns into tragedy. For property owners and managers, such outcomes could translate into a legal liability. For that reason, Hulbert says owners need to use caution when going down this road. “The fact that everyone is in the same community means they can physically find each other. You have to be careful,” Hulbert says.
There’s also the fact that MySpace and Facebook have evolved as de facto dating sites for many users. While Goldstein says LifeAt hasn’t really been used for dating since the company launched in January 2007, he acknowledges that the possibility of romantic overtures from one resident to another—whether wanted or not—exists. “But you run the same risk if you meet someone in the lobby and ask them out for a drink,” Goldstein adds.
Both Goldstein and Williams say their sites never disclose personal information, such as residents’ last names, unit numbers, or e-mails. Participation is optional, and the networks can be monitored by on-site personnel for inappropriate or offensive content.
Williams says a little oversight also ensures that gripes about the community don’t get out of hand. With social networks, residents have a forum for airing complaints. “The bottom line is, if you don’t do this, the residents will do it [elsewhere],” Williams says. “But if you develop a forum, you’re taking control of the situation. And if there’s a problem, you can rectify it, rather than keeping your head in the sand.”
Matthew Zifrony, a real estate attorney in Fort Lauderdale, Fla., says any liability owners might face can likely be mitigated through the user agreements residents sign when they join. But whatever the risks, the proliferation of online social networks is inevitable. “If the business benefits outweigh the risks, they’re going to do it,” Zifrony says.
This article was first published in Multifamily Executive in July 2008.
Tried and True
Despite the buzz about social networking, multifamily firms engaged in online marketing prefer to stick with traditional techniques.
Internet listing services (ILSs)
Search engine optimization (SEO)
Sponsored link or ads
Pay per click
Source: 2009 MFE Strategies Survey