Property Management Expert on Portland’s Multifamily Market: Q&A
- Aug 19, 2020
Portland developers completed a total of almost 10,000 units in 2018 and 2019—the best two years for deliveries in the last decade—according to a recent Yardi Matrix report. This year, the inability to work due to shutdowns and shelter-in-place rules has had a notable impact on the metro’s multifamily market. However, Portland’s relative affordability compared to other coastal metros, continues to attract both developers and investors.
Sunrise Management recently opened a new office in Portland and hired Dennis Mitchell as the regional vice president to overlook the company’s expansion in the metro. Mitchell brings more than 13 years of multifamily and commercial property management experience in directing long-term marketing, strategic planning, operations and day-to-day activities. In the interview below, he discusses the impact of COVID-19 on Portland’s multifamily market and provides tips on what property managers should do in these difficult times.
How would you describe Portland’s multifamily market in the new economic context?
Mitchell: While the pandemic has certainly changed the way any market operates, I’ve noticed that tech-forward companies were well equipped to adapt to the sudden shift in the leasing experience. There was a short lull in leasing in March and April, but the market seems to have bounced back for new leases since.
People still need a place to live and companies willing to be creative with leasing strategies have done relatively well, all things considered. The market as a whole is projected to see declining rents in the near term, primarily due to the number of deliveries in the past 12 months—7,200 units—and the slowing of in-migration due to the pandemic. However, the Portland market is strong and still an affordable hotspot on the West Coast—I certainly see it bouncing back.
Concerns related to safety and social distancing amid the crisis have accelerated the ever-evolving high-tech boom. What steps did Sunrise Management take in this direction?
Mitchell: Even before the coronavirus outbreak, a range of new technologies were changing the face of the multifamily industry. We have never been afraid to embrace new technologies and products that work. Virtual tours and videos were already in place at our properties, so it was more of just shifting to those marketing tools.
Prospective residents quickly adapted to this new way of taking tours and viewing apartments. Sunrise has taken steps to ramp up the number of Matterport tours at its communities, engaged ID verification companies to combat the recent pandemic-related fraud cases and made a point to produce fun and creative video tours. It was easy to embrace with the tech boom triggered by the pandemic because we were already there.
What are the top things property managers should focus on in these trying times?
Mitchell: Communication, communication, communication. Every facet of successfully navigating this pandemic has boiled down to thoughtful, constant and sometimes frank communication. Whether it be reaching out to check on residents that have been furloughed or laid off due to the pandemic to offer thoughtful solutions and referrals to resources, or continually updating the client with collections, local employment trends etc. It all comes down to staying in constant contact with the full circle.
What are your expectations for Portland rent collections going forward?
Mitchell: We’ve seen rent collections vary widely depending on the asset class. As a whole, we have seen them trend down slightly month-over-month since the beginning of the pandemic. I expect rent collections to start bouncing back, with recent jobless claims in the U.S. falling under one million in a week and businesses beginning to operate again, albeit in a modified fashion. The state of Oregon has allowed for pandemic-related deferred rents to be paid back up until March 31, 2021, so we should see at least a portion of those deferred rents start to flow back in.
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What has been most difficult for you during the pandemic?
Mitchell: At the core of our mission is the positive living experience (PLX). We operate with a hospitality style. With that, we love our residents, love seeing and interacting with them, and enjoy hosting events for them. The pandemic has struck an obvious blow in that regard, so refocusing our efforts to provide the PLX has been a fun challenge. It has been a pleasure seeing how creative and innovative our industry can be with providing a variety of virtual events, which shows the determination of industry professionals to overcome challenges and still deliver an optimum experience to residents.
What type of assets are you looking for in Portland and why?
Mitchell: We are primarily targeting Class A and B type assets, ranging from garden-style up to high-rise with retail. We also have a high level of experience repositioning Class C assets through renovation programs. Additionally, we have a strong background in various affordable housing programs.
What are Sunrise Management’s plans in the Portland market?
Mitchell: Sunrise saw a need for new blood in the Portland market. Our company has performed phenomenally well in recent markets it has entered due to its robust marketing approach, client-centric business plans and the PLX model it has fostered. We plan to continually grow in the Pacific Northwest by adapting that same approach—ideally emerging as a market leader.