Tackling Challenges in Smart Tech’s New Era
- Nov 06, 2020
Among all the takeaways that multifamily operators and managers will eventually glean from the twists, turns and unprecedented events of 2020, the industry’s accelerated use of technology will certainly rank high.
Virtual leasing has been widely cited by industry leaders as a tool that will outlast the pandemic. Keyless entry has become a must-have for many operators. And the ability for renters to do everything from set the temperature of their home to pay their monthly rent from the palm of their hands has become the ultimate competitive edge.
But with all change comes challenges. For companies big and small, adapting quickly to a new reality where smart tech is in demand more than ever has come with roadblocks and struggles.
Person vs. screen
One of the biggest and most immediate challenges multifamily operators have been faced with is moving from in-person to virtual contact. The industry is a people business, and the change, which has in many cases been mandatory, has been difficult.
“In traditional multifamily, you’re depending on leasing with an army of people coming in and out of a space,” said Rui Barros, CEO of Quarters, a co-living company. “You might have a digital platform, but you’re really still dependent on human interaction. That’s a challenge.”
For companies making the adjustment, options are limited to finding an off-the-shelf, plug-and-play product, or building something, which can be expensive and time-consuming. At Bozzuto, the aim is not to shift the model completely, but instead to marry the in-person model with cutting-edge technology.
“We’re asking, how can we enhance … that high-touch human relationship culture we so value, while providing a state-of-the-art living experience,” said Chad Cooley, the firm’s managing director of strategic business solutions. “I firmly believe you can create sanctuary, strengthen human relationships and utilize smart tech in our industry.”
Bozzuto uses an internal program, SPIN, that was implemented prior to the pandemic. The virtual leasing tool guides prospective residents in a way that Cooley calls “warm and welcoming.” Bozzuto also uses Facetime, Zoom and even a good-old-fashioned phone call to communicate with residents more personally.
The quality of customer service can often be the difference between a prospective resident choosing one community rather than another. That’s why RKW Residential President Marcie Williams says that balancing in-person interactions with smart tech will be important. “I still think what’s equally important is customer service,” said Williams. “Personal touches can be differentiators. We don’t want to close our buildings and only have self-guided tours and have everything from leasing to maintenance online. We want to have a human touch.”
The right tech
A telling pattern of priorities emerges from the 2019 annual report on renter preferences conducted by the National Multifamily Housing Council and Kingsley Associates. Based on input from 372,000 respondents, the survey was described by its sponsors as the largest ever of its kind.
A key, if unsurprising, finding is that residents favor money-saving solutions. Seventy-one percent of survey respondents expressed interest in smart thermostats, 67 percent in smart lighting and 63 percent in smart locks. Of least interest were smart or dynamic glass and virtual assistants.
Choosing the right features—the ones renters really want—should be top of mind for all operators, Cooley contends. “Smart tech, in order to be successful, needs to be convenient, needs to be accessible, needs to be intuitive, needs to solve a problem or create an efficiency that enhances someone’s living experience and sense of sanctuary,” he said. “We focus on resident experience. Tech just for the sake of tech is less interesting for us.”
Smart locks, virtual tours and package lockers are the right fit for Andrew Goldfarb, manager of New Rochelle, N.Y.-based Goldfarb Properties. The firm manages 6,500 apartment units in New York City and surrounding areas including Westchester County and New Jersey.
At the outset of the pandemic, deploying smart locks was a challenge, but the firm’s familiarity with smart tech has proved helpful, Goldfarb noted. “The real estate industry has been around forever and getting everyone on board to innovate was a challenge,” he said. “People are stuck in their old ways.”
The company has also started adding package lockers at its properties in order to keep up with the uptick in online shopping. When a parcel arrives, recipients are notified via app so they can retrieve it. Goldfarb said it’s great for security, eliminates any missing package issues and is easier for the handler.
“A lot of times you can create tech that’s great for one generation, while for another generation, it’s not as easy,” said Goldfarb. “We’re constantly looking to make it an easy process.”
With a variety of smart tech systems available for everything from lights to locks, connecting everything through one platform is the goal for many multifamily operators. A seamless experience provides ease of use to not only the renter but to the operator. And Internet of Things-enabled devices can increase energy efficiency and reduce utility costs. But getting each element in a system to connect is a challenge.
“There are a lot of players out there and they don’t always want to play nice with each other,” observed Goldfarb, who added that operators have to be strategic in choosing what to rely on a partner for and what to handle in-house.
“It’s tricky to make everything fluid, but I’m optimistic that as time goes by, there are more and more solutions out there and I’m hoping it will be easier for landlords to adopt those solutions,” he said.
However, with a higher volume of data flowing through more Wi-Fi connected systems, every multifamily firm should be thinking about the threat of data breaches. Security breaches of personal data and protecting residents is one of the biggest challenges in smart tech, said Kim Bender, executive vice president of property management at Fairfield Residential.
“It’s always the biggest thing,” said Bender, who serves on the Institute of Real Estate Management’s tech advisory board. “Getting IT and legal and risk (management) comfortable with what smart tech will be deployed and who we’ll partner with, that’s the toughest part of what I do.”
Demand for smart tech features from multifamily’s largest customer base—the 25-32 cohort—is one that needs to be met, but operators have to figure out a way to get past the pivotal security and privacy issues that keep coming to the forefront, said Bender.
“The more connected an apartment becomes, the higher the potential for unauthorized use of personal information,” said Raymond van Beveren, senior vice president of construction and facilities management at Pinnacle.
Always be innovating
After a wildly unpredictable year like 2020, it’s hard to predict what the future will bring. But in technology, perpetual change is a certainty. For multifamily owners and managers, a capacity to roll with the changes and update technology is key to staying competitive and meeting renters’ expectations.
“We believe you innovate, or you die,” said Cooley of Bozzuto’s mindset. “I think we’re only recently seeing a collective surge in innovation. And I think our current and future residents expect it and are going to be expecting it.”
According to van Beveren, the global smart home sector is expected to rise exponentially, from a $78 billion industry today to a $135 billion industry over the next 25 years. As the segment grows, the number of affordable devices that can unlock doors, turn on lights, adjust the temperature, play music and keep homes safe while residents are out will continue to grow, too.
“What’s so important with smart tech is not necessarily what you choose,” said Bender. “It’s the building you’re implementing it in, what the exit plan is, and how to future-proof the building for what you want to (eventually) put in it. “