MHN recently sat down with Greystar CEO Bob Faith to discuss a wide range of topics, including the current state of the industry, the challenges the industry in general faces and the hurdles Greystar will have to surmount to witness continued growth.
Question: What do you see as the current state of the industry?
Faith: We continue to believe in the long-term fundamentals of the multifamily industry. We have secular tailwinds at our back, including the aging of Millennials, many of whom still live with their parents, widespread urbanization into markets with prohibitive costs of home ownership, and lifestyle changes delaying the move to single-family product. In addition, headwinds against widespread overdevelopment in the form of rising construction costs and disciplined capital markets make multifamily housing a very attractive asset class.
Question: What are the leading challenges the industry will face over the next five years and 10 years?
Faith: There are two challenges I see our industry facing and that we will continue to face in the near and long term:
First, as the apartment industry continues to grow, there is a huge need for us to attract and retain more talent as well. It has become a priority of ours to keep recruiting college graduates and other professionals into the industry and to articulate the positives of building a career in this sector. For a long time, the apartment business was perceived as not as glamorous as other options in the real estate industry, but I truly believe that the multifamily sector has really come into its own. In order to continue to drive business, we need to keep the flow of talent coming in.
In addition, perhaps over the longer term, it is important for us to be aware of the impact of the continuing shift the Millennial demographic has created in rental housing. In the past, we’ve seen people “age out,” so-to-say of renting apartments, but this segment of the population has an increasing propensity to remain urban as well as want more flexibility as a renter versus owner. Since Millennials will be driving most of our growth for the next 10 to 15 years, we will have to watch their behaviors closely.
Question: How will those challenges be surmounted?
Faith: For Greystar and for me personally, one of our major corporate initiatives is to attract talent in the industry and communicate what great careers are available in the multifamily sector. We will continue to work hard to recruit people directly out of college, focusing on training programs and creating roles that are exciting for Millennials.
This initiative is not just important for us internally, but something the whole industry has to be cognizant of and act upon.
Question: What hurdles does Greystar face on the way to achieving continued growth?
Faith: I think what’s most important is for us in order to achieve continued growth is to make sure we keep up with technology and the impact it has on all of our constituents—whether it’s what technologies residents are looking for in their homes, what our clients need to better communicate with us or how we internally use technology to become more efficient and utilize data to predict trends—we have to remain really open to being innovative and constantly bring new initiatives to the table.
For example, there’s been an increased demand of smart homes, where residents are able to monitor thermostats remotely and control appliances. We have also witnessed apps changing the way renters are finding apartments and identifying what is available. Technological advances literally impact every single aspect of our industry. To stay on top of it is vital to our advancement.