RETCON Special Report: Multifamily’s Future Is Here
Owners and operators are embracing new tech as they zero in on improving NOI.
With the rapid advent of artificial intelligence, the number of tech-enabled solutions in the multifamily space is exploding. Meanwhile, multifamily owners and operators are zeroed in on NOI growth, and are eager to incorporate innovations that will infuse efficiencies into their operations and improve the resident journey. It’s a perfect storm, though it has its challenges.
Five years ago, multifamily was coming off a 15 to 20 percent value appreciation driven by low cap rates and lots of rent growth. Today, it is the opposite, as many multifamily owners are forced to turn to technology as they seek to create value through improved margins, said David Schwartz, CEO of Waterton during the opening panel of this year’s Real Estate Technology Conference, hosted in Las Vegas.
“We’re treating it carefully, but we’re also very hungry for it,” said Schwartz to an audience made up largely of vendors who had come to meet and court multifamily operators.
Walt Smith, CEO of Avenue5 Residential, said his firm is also now managing buildings, people and technology as they dive into AI, centralization and platform consolidation.
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“We have added that third leg, which is difficult,” Smith said. “It is difficult for somebody who has been in the business a long time and thinks about the way things have operated. And. now, where are the next parameters going to come from? Who do we put our faith in from a platform perspective because we have so many options out there?”
Bill Shopoff, president & CEO of Shopoff Realty Investments, said the new technologies have become critical for decision-making. “I have decades of experience, but (it’s) useless if I can’t process information faster than my competitor,” he said. But the priority is improving and modernizing the resident experience so residents rent and stay at your properties.
The annual RETCON conference launched as a virtual meeting in 2020 when owners, operators and technology executives “needed a place to meet,” according to RETCON Managing Director James Shearin. This year, it drew 2,000 real estate and technology professionals to Las Vegas’ MGM Grand. The conference covers real estate technology broadly but leans heavily toward multifamily. Multifamily execs like to meet, Shearin said, and there is a “rich ecosystem there.”
Throughout the first day, panelists shared how they are navigating what Schwartz termed “the jungle of vendors,” and how they are effectively implementing the solutions they choose at their properties.
Controlling change
During a session titled “Launch Tech Your Team Loves,” for example, panelists discussed how the success of new technology in your organization begins with the design. By understanding the problem accurately and working with the vendor to configure a new technology precisely, it will be an asset for both your team and your residents.
“You really have to separate the symptoms from the root of the problem because the way you do that is making sure you are solving problems and not just symptoms,” said Genevieve Bauer, executive vice president of operations at The Michaels Organization.
Also, “don’t let vendors drive the bus,” said Josh Kulick, executive vice president of technology and innovation at Independence Realty Trust. “You know your business best, right? What does the solution look like for your company. Take the time to sketch that out and then go to the vendors and say ‘how can you help me bring this to life.'”
The third recommendation was “sweat the configuration.” The key to optimizing a new piece of technology is to understand how it will affect the process and then to do a lot of testing. “There’s what the configuration says it does, then there’s what it actually does and then there’s maybe how it interacts with other configurations,” said Dan Rockoff, director of technology for Independence Realty Trust.
Other recommendations included: Focus on partnerships, not purchases; treat the pilot like a stress test; view a new technology not like tech but “an operational transformation” and keep evolving your technology. “Technology that stays still is a fossil,” Bauer said.
