The Changing Lexicon
- Sep 15, 2014
Change is coming to lease-up, and a number of catalysts are driving the metamorphosis. One of the biggest is competition, says Greg Benson, senior director of marketing for Charleston, S.C.-based Greystar. With waves of new apartments being delivered in primary and secondary markets, the need to stand out with unique approaches has never been greater, he reports.
As well, developers and clients are displaying greater marketing savvy and comfort with technology, he says. And the general population of prospective renters has grown increasingly familiar with technology and social media, removing some of the impediments to employing technology in lease-up.
Finally, consumers crave unique experiences. “They want information to be personalized, available on demand and real-time,” says Benson.
At Greystar, lease-up strategies are viewed from several perspectives. “How can we personalize the customer experience? How can we enhance or put a new twist on the presentation of the product itself? How do we extend the reach of our marketing communications beyond the tried and true?” Benson says. “The answers to these questions often provide inspiration for how to layer new approaches on top of the traditional activities that data proves are effective.”
In the area of personalizing customer experience, Greystar has reset its thinking from traditional pre-leasing focused on generating leases to “pre-marketing,” focused on engagement and brand loyalty. That has been met with greater success. “By focusing our energy on building buzz and engaging customers through lifestyle, promotional and local community events, we’re able to increase personal interaction and build brand loyalty,” Benson reports.
This loyalty has allowed Greystar to streamline the lease-signing period to more tightly align with first move-in dates, resulting in fewer cancellations and lower management costs due to construction delays.
Customers are happier, Benson adds. The need to adjust move-in dates is dramatically reduced, and tenants form deeper relationships with the community team before they’ve moved in to their new homes.
Another trend Greystar is witnessing falls under the heading of “leasing offices without walls.” This concept results in an open environment that Benson says spurs more authentic interaction.
Touch-screen presentations, tablet stations and other technologies can now be used to their greatest potential. “Content can be personalized, packaged with video and pricing information and electronically shared with prospective residents during the sales presentation,” Benson says. “As a bonus, this new leasing office typically has a smaller footprint and allows developers to repurpose space for larger or more numerous resident amenity or interaction areas.”
Also, social media channels are proving to be consistently effective sales tools for lease-ups, more so than at stabilized properties, Benson says.
“Building buzz, generating interest in events and sharing the community’s story as it comes to life are what social was built for,” he explains. “Social is the perfect complement to our customer experience and product-presentation goals. We’re also testing promoted content and paid advertising through several social channels to further extend our reach. Early results are positive.”
Quest for uniqueness
Vancouver, Wash.-based Holland Partner Group is striving to gain an advantage in lease-up by offering more unique products and amenities, says Josh McDonald, company director of marketing.
“Our most current project in Seattle is True North, best described this way. If REI were an apartment community, this would be it,” he says. True North features a rock-climbing wall, bike lounge, trailhead room, skis and kayaks storage area, dog run, outdoor rooftop terraces and even a rooftop terrace pizza oven, McDonald notes.
“The days of a standard fitness area, pool and business center are a far distance in our industry’s rearview mirror,” he says. “The bar is being raised with each new deal, positively impacting the quality of lifestyle for our residents. It’s very exciting to be part of this movement.”
Necessity has spurred innovation for Holland Partner Group. In 2013, its team at Line 28 at LoHi in Denver overcame office space limitations by forging a relationship with the coffee shop adjacent to the project where team members could conduct meetings with prospects.
In this social setting, the team was equipped with iPads that allowed for mobility as well as access to all necessary content required to pre-lease.
“The welcoming nature of the coffee shop, [adjacency] to the property and fortitude of the team equated to one of our most successful lease-ups in company history,” McDonald says. “We exceeded proforma rents, leading the market for price per square foot, while stabilizing months ahead of schedule.”
At Woburn, Mass.-based Dolben Co., director of marketing Sara Scarborough Graham reports an increase in use of technology on site. Several of the company’s new lease-ups are using iPads or touch screen displays as part of their leasing presentations. “We’ve also started to implement lobby displays with package alerts, streaming news headlines and community events,” she says. “In addition, we are seeing a greater number of leads coming in via social channels, sometimes before we even start officially pre-leasing units. Both of these trends tie back to our renters’ needs for real-time information and interaction.”
Future of lease-up
Peering into his crystal ball at lease-up innovations yet to come, McDonald feels management will continue to strive for environments where prospects can envision themselves being the first to live in an apartment home. For instance, hard hat tours during the construction phase are important, because they afford prospects the opportunity to gain a tangible experience.
“The advancements in first-person interactive gaming—such as Xbox and PlayStation—could provide our industry with a great opportunity to create a digital ecosystem where the pre-leasing efforts could consist of a prospect putting on eyewear or goggles and walking through the building [in] a computer generated tour,” he reports. “The goal for us has always consisted of simplifying the transaction for our customers, and this may help them envision themselves living in their new apartment homes.”
“Having the ability to help residents envision their future apartment homes is hugely helpful, especially in a lease-up situation, and can be a major competitive advantage,” Graham adds. “Unfortunately, the cost to develop these types of apps is still a bit prohibitive. But I think we can expect them to become more affordable over the next few years.”
Greystar’s view of the future of lease-up is of an ongoing “power shift” to the consumer side of the equation, Benson says “The rapidly evolving retail marketplace will continue to influence how we operate as an industry and reflect the needs and wants of consumers and prospective renters,” he observes. “The maturation of the millennial generation will play no small part in this evolution.”
The industry will likely need to embrace online purchasing models like those used by the hospitality industry, he adds. The concept of shared apartment inventory, in which ILS-style companies generate leases for communities, is intriguing to Greystar. “That will truly be a pay-for-performance marketing source,” he says.
Benson also believes 3D technologies will take on a significant role in the lease-up experiences of the future. “It’s not hard to imagine virtual models and amenity spaces,” he says.