Lease-Ups in a Down Market
A dip in the market is inevitable at some point, and those best prepared to take it on will have a distinct advantage over their competitors. Megan Mahoney of LMC gives a few key pieces to consider when planning for unknown conditions.
By Megan Mahoney
Nearly everyone has enjoyed the sustained positive multifamily cycle, which has significantly boosted the industry and helped marketing efforts flow smoothly. But that doesn’t mean you shouldn’t be prepared for an eventual plateau or downturn.
A dip in the market is inevitable at some point, and those best prepared to take it on will have a distinct advantage over their competitors. Granted, it’s difficult to think about lease-ups in a down market when the market has been thriving for so long. But when considering that developments typically have an 18- to 24-month timeline, it is impossible to gauge the state of the market at the time of delivery.
That means marketers need to be ready for virtually any scenario, understanding that the timing of the lease-up, or the market itself, could go haywire. With that in mind, here are a few key pieces to consider when planning for unknown conditions.
Don’t bypass your processes
Regardless of market conditions, it’s always advisable to have your website operating about 60 days prior to the delivery of the first home, a leasing manager exclusively dedicated to driving leads and a leasing professional who can assist with lead generation. All your collateral, temporary signage and marketing materials should be ready to go. Weekly team calls that foster timely transitions and a seamless process are a must.
If you are scrambling to do this as the community is opening its doors, you’re probably too late—particularly if that lease-up is more of a challenge than most. That first push is integral in catapulting yourself to your eventual occupancy goal.
Engage in outreach marketing
Bringing your team on about 60 days before the leasing office is ready and functioning allows for a solid month of outreach. This is your opportunity to get to know the surrounding community, local companies and chamber of commerce at a time when there is some flexibility in the schedule. Building those relationships is much more cumbersome after the community opens its doors and traffic starts flowing in. Many disregard or overrate the importance of outreach marketing, but it’s an effective way to connect with your new neighborhood, get your name out there and generate preferred employers.
This is something that is often overlooked when it comes to a lease up marketing strategy. But the cost of outreach is relatively low in comparison with other lead generation strategies, and when done correctly, can bring huge impact to leasing velocity. Many are skeptical of outreach marketing and are discouraged if companies won’t open the door. But with some extra time built in, you can fortify those efforts and they can yield positive results. For instance, LMC focused on Preferred Employer outreach in Bloomington, Minn., and has over 60 residents living with them from their efforts.
Inject onsite teams with early ambition
You would like to believe that your onsite teams are naturally motivated, but there are ways you can cultivate that concept. That’s another benefit of starting 60 days early and hosting weekly marketing calls—you can instill an early sense of accomplishment.
At that point, the regional manager doesn’t want to hear how many leases you’ve generated, because you don’t have the ability to lease yet. They want to hear how many companies you’ve met with and how your conversations went. When your team members start seeing the results of their efforts, that’s what truly motivates them. At LMC, outreach marketing reaches far beyond passing out flyers. We ask our teams to develop relationships and start conversations about the community, such as sponsoring pay-it-forward events at local restaurants. This provides a social way for onsite team members to acquaint themselves with the local community without the pressure of a formal meeting. When every lease counts, it’s easy to measure progress.
Vary strategy by locale
You can’t go in with the approach that “every lease-up is going to run this way,” because in some cases it’s just not going to work. Sure, in some markets your corporate outreach might work. In others it will not. Having a strategy that fits the market is a must, because it’s seldom a one-size-fits-all approach when it comes to lease-ups. I always tell people the reason I travel so much is because, as a regional marketing director, I have to be able to understand the markets myself before passing along a strategy to my team.
You have to know where to delegate your efforts, and you can’t really do that without understanding your local and regional market. Learn as much as you can about your target demographic, employment climate, popular local businesses, history of the area, rent trends, how competitors are faring and anything else you think might help you better understand the submarket.
Create a smart budget
As you do your research, be thinking about the cost of your potential strategies. Do the work up front to know what the average PPC budget is in certain markets, understand the average lead volume from each ILS in that market and have a good understanding of your potential variables. The work you do ahead of time will help your team avoid budget overages. Of course, unforeseen obstacles can arise and it’s nearly impossible to be in control of every variable at every lease-up. Doing the budget research ahead of time also grants you a layer of insurance. If you have to go to your team and ask them to expand the budget, they will recognize that you proactively researched and did your best to account for possible overages.
In two years, the market might still be flourishing. Maybe it will have plateaued. Objectively, it could conceivably lose a step. Whichever the case, you have to be prepared for any scenario. Attack your lease-ups like you would in a struggling market, and be pleasantly surprised if the market remains solid.
Megan Mahoney has been a regional marketing director for LMC since May 2016 and currently heads the Central and East Coast regions. She broke into the industry as a leasing consultant with Post Properties in 2006 and transitioned into a marketing role over the Texas region while leading corporate outreach and community events for the market. She joined Monogram Residential in 2014 as the Regional Marketing Manager overseeing the West region, including Texas, Colorado, Nevada and California.