Multifamily Is in a Unique Spot. RKW’s Leader Tells Why.

Insights from Marcie Williams on trends and challenges in property management.

Marcie Williams on the challenges multifamily operators face today
The multifamily housing market is witnessing demographic shifts, notably with the aging population and the rise of Gen Z renters, prompting operators to adapt, said Williams. Image courtesy of RKW Residential

Three major trends—the supply-demand imbalance, economic unpredictability and demographic shifts— are prompting multifamily property managers today to refine their operations and recalibrate their business strategies. One of the solutions they found to the multitude of challenges they face is expanding into new segments. RKW Residential, a third-party property management company that oversees some 33,000 multifamily units across the Southeast, Northeast and Midwest, has recently grown its built-to-rent portfolio to more than 5,000 units under management or consulting.

Multi-Housing News caught up with CEO Marcie Williams to talk about how multifamily operators are adjusting their offerings to meet residents’ changing needs and lifestyle preferences. Williams has more than 25 years of multifamily experience, having been with RKW since the company’s infancy.

What trends do you currently see in the multifamily housing market?

Williams: The multifamily housing market is in a unique spot. While property supply is at a 37-year high, demand isn’t quite keeping pace, particularly in markets where product was built based on prior rent surges. To make matters more complex, multifamily operators are facing rising operational costs for expenses such as payroll, insurance and taxes. These factors, combined with fluctuating rent markets, are prompting a strategic shift. While national averages might still show rent increases, some specific markets are experiencing a decrease.

LISTEN TO: Podcast—Multifamily Is Still at the Top of the Food Chain

To what extent are high interest rates and the lack of economic predictability affecting multifamily operators’ strategic decision-making process?

Williams: The lack of economic predictability is significantly impacting multifamily operators’ decision-making processes. With maturing loans and high-interest rates, owners are faced with tough choices. While these rates inadvertently maintain apartment occupancy by deterring residents from homeownership, they also present challenges in realizing anticipated rent revenue increases.

Furthermore, economic unpredictability leads to delays for clients and developers, potentially causing loan issues and requiring owners to cover expenses out of pocket. Owners who bought properties during the pandemic now find themselves confronted with flattened or declining rent growth. As a result, operators are limited in their choices. They must either refinance at prohibitively high-interest rates, sell properties or seek partnerships to navigate through these uncertain times.

What are the main changes that multifamily operators are making to adapt to residents’ evolving needs?

Williams: Multifamily operators are adapting to residents’ evolving needs amid the rise of remote and hybrid work and changing lifestyle preferences. They have transitioned into a 24/7 business, offering availability around the clock to accommodate residents’ varied schedules. This entails providing spaces within apartment homes for remote work and ensuring residents can seamlessly switch between work and leisure. Operators also focus on mental health by creating environments where residents can comfortably balance work and social life, delineating workspaces from living areas.

How are demographic shifts, particularly the aging population and the rise of Gen Z renters, influencing the multifamily housing market, and how are operators responding to these changes?

Williams: The multifamily housing market is witnessing demographic shifts, notably with the aging population and the rise of Gen Z renters, prompting operators to adapt. Traditionally, residents transitioned from renting to homeownership after college, but now they’re staying in the rental market longer, possibly delaying homeownership. Additionally, many renters are getting pets before having children, driving demand for more spacious accommodations like build-to-rent developments, which provide a home-like experience without homeownership commitments.

In response, multifamily operators are adjusting their offerings. They incorporate features appealing to both demographics. RKW has notably expanded into the emerging BTR market segment, with more than 5,000 BTR units under management and consulting. This strategic pivot allows us to effectively cater to evolving renter preferences while maintaining competitiveness.

Lately, there’s been a growing emphasis on community engagement and social responsibility. How can multifamily operators contribute to fostering a sense of community and supporting local neighborhoods?

Williams: Multifamily operators play a crucial role in fostering a sense of community and supporting local neighborhoods. We achieve this through resident engagement platforms like resident apps, which facilitate connections, club formations and event RSVPs. These platforms also serve as avenues for actively promoting local businesses and services, further integrating residents into their neighborhood. Complementing these digital efforts, operators prioritize physical gathering spaces within communities, such as wine bars and fitness centers, to encourage resident interaction and socialization.

READ ALSO: Call for Submissions—2024 Top Property Management Firms

According to MHN’s top 50 multifamily property management firms of 2023, RKW Residential had a 94.8 percent portfolio occupancy rate. What’s your strategy for maintain a high occupancy rate?

Williams: Our strategy for high portfolio occupancy revolves around prioritizing resident satisfaction and retention. We place an emphasis on the renewal process, ensuring a seamless experience for our residents. Our strategy involves anticipating and addressing residents’ needs before they arise to provide exceptional care and elevate resident experiences. Additionally, we actively seek feedback from residents through reviews and surveys, enabling us to monitor satisfaction levels and make necessary adjustments proactively. By prioritizing residents’ preferences and concerns, we aim to foster long-term residency and maintain consistently high occupancy rates across our portfolio.

RKW Residential is celebrating its 10th anniversary this year. How has the journey been? What valuable lessons have you learned so far?

Williams: RKW Residential’s journey to our 10th anniversary has been marked by a people-first philosophy. Reflecting on our success, we’ve realized that our best decisions stemmed from the foundational focus on our people from the company’s inception. Throughout the years, we’ve learned valuable lessons about the importance of prioritizing our team and nurturing a supportive company culture. These principles have been integral to our growth and success, and they continue to guide us as we embark on the next decade of our journey.

Tell us more about your aspirations for the next decade. What drives you to continue pursuing new business opportunities? Are you interested in exploring other niches within the multifamily industry?

Williams: As we look ahead to the next decade, our goals are clear: sustaining success in our markets, fostering innovation and prioritizing team member development. While expansion is part of our strategy, we emphasize strategic growth over mere scale for the sake of scaling. This means focusing on creating meaningful opportunities for both our team and residents, ensuring our growth is purposeful. As we explore new ventures within the multifamily industry, our commitment to our core values remains the priority.

You May Also Like