Leading multifamily CEOs tackled several industry challenges and opportunities at the annual Multifamily Executive Conference in early October in Las Vegas.
Technology’s accelerated path was a leading theme for this panel as well as throughout the three-day conference.
Tom Toomey, CEO of publicly traded REIT UDR, says the biggest opportunity for disruption for the multifamily industry is a simple equation. “It’s where do I get the highest return on my technology investment. In our model, it’s in operations.”
He says this year’s technology investment number for the firm is $70 million, which could yield a $1 billion value for shareholders. He and his team have coined the phrase “technology is a force multiplier.”
While UDR has been invested in technology for 30 years at various stages, Toomey says the REIT backed up about a decade ago to examine its vision for the evolving space. Now, it looks at three critical drivers when making technology decisions: transparency, speed of information, and the elimination or reshaping of work.And when it comes to evolving, UDR listens to three primary groups—its customers (and the devices they are carrying), its associates and the work they are doing, and to capital partners and investors.
For Diane Batayeh, CEO of Village Green, striking the right balance between technology and the human touch point is one of the biggest challenges for the multifamily industry.
“There are absolutely efficiencies to be had through the use of technology,” she says, adding that it hinges on demographics and property types. Many renters, especially younger generations, seek everything electronically, from leasing an apartment to service requests.
“That’s great, and it does save you money when it comes to labor costs. I think where we see the need for the human touch point comes into play when it relates to building resident relationships and creating that emotional connection,” she says. “It’s a challenge to drive efficiencies and still drive rent increases and resident retention, and I think that’s a big challenge in our industry to figure out.”
Village Green uses technology at all levels from business analytics and all the data scraping to multiple operating platforms. Several years ago, the third-party management firm did an audit of every single software program being used at the firm and determined what was redundant and what was needed to run the business and be transparent to its stakeholders—the clients and owners.
“It’s something that is continuously evolving,” she says. “Understanding, streamlining, and having visibility are the key mantras to data and how we use it.”
Batayeh adds that technology isn’t without risks. “I can’t think of one bigger threat than cybersecurity in our industry,” she says.
With the amount of data housed at the both the property and enterprise levels in addition to the amount of money moving around, the industry is at threat for sophisticated phishing attempts and security breaches on a daily basis. “If you are going to invest time and resources to mitigate that risk, it is money well spent,” she notes. “It’s a matter of educating our people. It’s a huge risk, loss of money, and loss of data.”
For Bob Hart, president and CEO of TruAmerica, the biggest challenge is the nation’s labor shortage.
“If you don’t have the right people at the controls, you can’t make any of these other things work,” he says. “Without the right teams, being trained and supported, that’s the biggest source of vulnerability right now in this industry. There’s a high demand for workers and not enough people coming into the business at the entry level.”
Hart encourages more grassroots training to encourage younger people to enter the multifamily industry earlier, particularly at the property management level.
“Even at the owner/developer level, the more you can open the door to younger people through internships or entry-level positions, the greater chance you have of harvesting talent for the future and keep people interested in the business,” he says. “And frankly there’s the need for more minorities and more women in the industry, not just at the property management level but at the investment and ownership level, too.
