At the Multifamily Executive Conference last week, it was hard not to feel the positive energy. Setting a record attendance, over 780 apartment executives came together at Bellagio in Las Vegas Sept. 18 to 20 to discuss industry conditions and forecasts and how to meet the urgent market demand.
The conference, whose theme was "Multifamily’s 2020 Vision: Planning for What’s Next," kicked off with a video that quickly cut to the chase, delivering a strong message that the industry needs to devise new solutions to supply the amount of housing that will be needed in the next decade.
Many ideas were presented throughout the conference, one of which puts a new twist on an old concept—co-living. Brad Hargreaves, founder of co-living start-up Common, discussed in his keynote address how sharing a rental unit appeals to the convenience, sense of community, and flexibility that today’s renters seek. With affordability dominating the housing headlines, Common's co-living approach creates savings of more than 20%, Hargreaves notes, especially important in the urban markets where so many millennials want to live.
While co-living is one way to arrive at a denser resident base, another conference session, "Under the Radar Markets," took a different tack in analyzing the current multifamily landscape and how it should develop in the short term. Matthew Vance, economist and director, research and analysis, at CBRE revealed new data on defining urban markets and how this information plays into the development of suburban areas. Jay Parsons, vice president of MPF Yieldstar, then presented a very credible case for the value of suburban business, comparing barriers to entry, rent growth, occupancy levels, lease renewals, and lease rates in both central business districts and suburbs. In all cases, suburbs came out on top.
During the annual economic outlook session, Ryan Severino, chief economist at JLL, and John Sebree, first vice president and national director of the National Multihousing Group at Marcus & Millichap, reviewed the key data points indicating the current urgency of demand. Sebree compared employment by metro with apartment completions and further layered in the locations where college graduates are moving. Severino looked at the opposite end of the spectrum, labeled "the boomer tsunami," and how it will impact housing. He highlighted a few markets whose performance he says will stand out—Seattle; Tacoma, Wash.; Colorado Springs, Colo.; Fort Worth, Texas; and Atlanta.
MFE editorial director and Residential Group vice president John McManus hosted an enlightened conversation with some of the industry’s most well-known and -regarded CEOs: Gables' Susan Ansel, Bozzuto Group's Toby Bozzuto, and LMC's Todd Farrell, who each shared strategies and initiatives heading into 2020.
There was a consensus among the panel that peak supply will occur between now and 2018, and that there's still room for rent growth. As Ansel said, renters can afford it, so you have to give them what they want. Big concerns are getting the right people in the right seats. Farrell said it’s not going to get any easier to build. Each developer, therefore, is looking at new construction processes, efficiencies, and technologies.
Much of the talk at the conference focused on a risky, yet innovative, approach to overcoming labor challenges and increasing consumer demand: prefabrication. Erik Earnshaw of BGO Architects and Chuck Berberich of JPI presented the 2017 MFE Concept Community, revealing a master-planned community with four building types that were designed virtually, and compared conventional construction time frames with those using shipping containers or prefabricated components.
This session was just an appetizer for another presentation focused on modular construction, in which four experienced builders shared their processes and expertise with the audience. Roger Krulak, CEO at Full Stack Modular; John Vanker, co-founder of Prescient; William Finfrock, president of Finfrock; and Christopher Schmidt, regional business development, Northern California, Guerdon Modular Buildings, spoke of their unique approaches to the prefab process and how modular building can cut time lines, on average, 25%—just what the industry needs to maintain margins amid tight labor conditions and rising construction costs.
Technology was a critical touch point in every discussion at the event, from using dashboards effectively to capturing new residents in the social space. And, speaking of social media, the conference finished up on day three with a panel of operators and marketers who are using social media for everything from adding curb appeal to hiring top personnel.
With her presentation on the Gables Loyalty Program, Gigi Giannoni explained how important it is to instill brand loyalty among residents. Among her company's findings:
- 70% of residents are willing to engage online, but only 10% of them will initiate the conversation on their own;
- Over 38% of residents engage with property management via a "gamification" or appreciation strategy.
- More than 50% will refer if an incentive or recognition applies;
- 75% of residents use online ratings and reviews multiple times during their apartment search;
- 92% of consumers believe in ratings and reviews from friends and family over all forms of advertising; and
- 75% of U.S. companies with loyalty programs generate a return on investment.
In the coming weeks, we'll delve further into the many discussions and presentations that took place at the conference. So check back often for greater detail on the strategies, success stories, and cost-saving ideas presented at this year's event!