For many institutional apartment operators, the pandemic brought a tsunami of issues to their doors: Expenses went up through increased spend on personal protective equipment, cleaning, and signage, while rent collections dipped as some residents struggled with a sudden loss of work. Giving those tenants a streamlined way to pay also came with a price.
“We paid our residents’ credit card fees for a few months in 2020 to make it easier for them to pay rent online,” says Jeffrey Callan, chief information officer at King of Prussia, Pennsylvania-based Morgan Properties, which operates 90,000 units. “That adds to operating costs.”
At Atlas Real Estate in Denver, a manager of 3,400 units, vice president Mike Hills relays how virus hesitancy resulted in increased costs with turnovers.
“We typically begin marketing a property within five days of receiving the notice to vacate, but many residents would not allow us in their homes to take photos, let alone do showings, which I completely understand,” Hills says. “That pulled our lease-up velocity down, which was more costly and took extra effort and staff hours to overcome.”
Then, there was all the extra cleaning.
“Housekeeping and maintenance skyrocketed,” says Zain Jaffer, CEO of San Francisco-based Zain Ventures, an operator of 400 units. “The need for new and more frequent cleaning protocols have increased costs and decreased margins.”
To deal with the issue, leading operators are leaning into tech even more to help them keep expenses in check, while ensuring they maintain both their properties, and residents’ needs.
“Saving money is often about doing more with less,” says Callan. “We are making use of additional functionality within our already-existing systems to allow residents to access our services and amenities.”
For example, the firm has been driving more resident-staff interaction to its existing Morgan Properties app, which has been racking up high ratings in online app stores, while allowing reservations for its fitness centers to ensure capacity limits are enforced, without needing to dedicate staff to the task.
“It helps us satisfy resident desires to access the amenity, without having to allocate personnel and payroll costs to actively manage our fitness centers,” Callan says.
At Chicago-based Equity Residential, senior vice president of national facilities Steve Dybowski says by constantly evolving its tools, the company’s technology now adds up to more than just the sum of its parts.
“Each tech initiative we have deployed incrementally adds value to our operating platform,” Dybowski says. “When we combine smart building technology, a service mobility platform, resident portal, and CRM tools, we create holistic visibility and efficiency to maximize productivity day in and day out. It enables our teams to work smarter, not harder.”
Dybowski says the firm’s SightPlan facilities app helped it catalogue features at its properties, such as square footage of fitness centers, or which properties had touchless bathroom fixtures, during the pandemic so it could establish national guidance for its reopening efforts
“Through this process, we completed over 4,500 inspections, answered 50,000 questions, and documented 35,000 photos in about two weeks’ time,” Dybowski says.
Some firms are using tech to help staff not work at all. That’s true at Zain Ventures, where cleaning robotics from Friendly Robots and Peanut Robotics have supplemented janitorial staff.
“Introducing robotics into cleaning protocols is a great way to cut expenses, medium and long term,” says Jaffer, while noting costs for robotics have decreased significantly in recent years. “Cleaning bots are helping to improve the rate of cleaning routines while reducing the risk of viral transmission among our janitorial staff.”
Virtual and self-tours, which necessitated an additional investment for many operators, have also helped cut personnel costs, while increasing the number of leads coming in the digital door.
“Even though we invested more upfront, the addition of our self-guided, video and virtual tours has definitely helped to keep costs low when it comes to logistics and time management of our leasing team,” says Laura Malagari, head of leasing and property management at Baltimore-based Chasen Cos., a boutique operator of 500 units. “We went from roughly five in-person tours per day to today’s average of 50 to 100 virtually.”
By leveraging the technology they already had, while adding strategic solutions to help protect residents and staff, leading multifamily operators have been able to combat rising expenses, without sacrificing service.