Retrofitting Multifamily Communities for Digital Natives

The country’s vintage housing stock keeps getting older, and each new generation is more tech-reliant than the one before. It’s a mismatch that can affect leasing efforts and resident retention. For older properties that lag on technology, the only way to stay competitive is to get up to speed with proptech retrofits.

Owners and managers of these assets do have some advantages, for example, the constantly expanding availability of new tools. According to a KPMG survey, between 2022 and 2023 proptech investment more than tripled to $13.4 billion. And the National Apartment Association has identified tech solutions as the new resident amenities.

Proptech trends are driving sustainability-related features, as well. Fairstead and Invesco Real Estate own 1,904 affordable units across 48 buildings and 2.3 million square feet in the Bronx. Fairstead’s proptech investments include boiler technology that can help large communities heat water efficiently and generate electricity.

The ease of technology retrofits is influenced by a property’s layout and accessibility, said Whitney Kidd, The Preiss Co.’s senior vice president for innovation and technology. Garden-style and mid-rise communities may offer great flexibility to implement new proptech while high-rises face such challenges as signal coverage and advanced safety measures.

“Indeed, some properties are more suited than others for proptech,” she noted. Properties that have existing infrastructure such as high-quality internet and well-designed low voltage cabling are more readily adaptable to proptech solutions. They can support fast, reliable connectivity for smart devices and systems.

WinnDevelopment President & Managing Partner Larry Curtis describes two basic categories of proptech retrofits. In one group are properties that need them “from an energy efficiency point of view, an operations point of view, a rent collection point of view—all the nitty-gritty of owning and operating older apartment buildings.” In a separate category are conversion candidates, such as “a vacant office building or high school or loft building or mill.” In the interest of efficiently gaining the necessary knowledge about a property’s retrofitting needs, Curtis has invested in Existing Condition, a company which uses lasers to get measurements that are accurate to the millimeter.

When The Bainbridge Cos. looks to acquire a property, “We investigate the technology stack, dig in, peel the layers back and see what we’re familiar with, what works and what doesn’t work,” said OJ Loor, the company’s vice president of systems. This includes analyzing resident input to inform decisions about further proptech.

“The good, the bad, and the ugly, from my experience, is rooted in the data itself that you’re getting from said technologies,” added Loor. When Bainbridge is onboarding an asset, it asks key questions of the outgoing management company, including:

• What platforms are you using?
• Are you able to serve up that data in a way that we are able to ingest it?
• Are we in a manual phase where we have to lextract what you provide and put it in the software, or can we get these platforms to talk?

“Once we can ingest the data into our system,” Loor said, “the acquisition is on its way to becoming that technology hub that we want it to be.”

Curating the proptech stack

Student housing operators have a front-row seat to observe future apartment residents in action. The challenge lies in transitioning away from traditional, fragmented access methods involving brass keys, fobs, gate remotes and assorted mobile apps that can complicate and detract from a seamless experience, said The Preiss Co.’s Kidd.

In Kidd’s experience with student and market-rate communities, building the tech stack to facilitate smooth resident access, particularly in retrofits, requires careful planning to ensure that the solution is user-friendly and cohesive as well as technologically advanced.

“This is a complex endeavor. It’s critical for meeting the expectations of a tech-savvy generation and securing a competitive edge in the property market,” she added. “Particularly for Gen Z—a demographic that places a high value on unified and efficient technological interactions.”

To address these complexities and maximize ROI, Kidd recommends that owners focus on a software-driven smart home suite that enables residents to navigate their community and apartment seamlessly through their mobile device in combination with managed Wi-Fi. High-speed internet access provides the backbone for smart technologies and resident connectivity needs.

Other items to consider that are popular with residents:

• Smart thermostats offer residents control over their living environment while promoting energy efficiency and reduced expenses reduction with recovery of vacancy costs.
• Leak detection systems help prevent water damage, saving costs and avoiding inconvenience.
• Common-area access control streamlines access to gyms, lounges, laundry rooms and other facilities

Connectivity is king

When it comes to retrofits, there are certain things older buildings can’t do easily. “The unit mix is the unit mix. You’re constrained by the footprint in a lot of cases,” said Sarah Yaussi, vice president for industry communications at the National Multifamily Housing Council. “In terms of proptech, it’s not an easy upgrade or installation, but improving connectivity is a pretty big thing that an older building can do.”

Sometimes this can be very expensive—for instance, at a property that requires a distributed antenna system. DAS can support multiple wireless carriers and is often used in areas with poor cellular coverage or capacity. It can extend wireless coverage throughout a property and help bridge connectivity gaps.

There’s a lot that operators can do to improve connectivity in older buildings, according to Yaussi. They can improve speeds and work with providers that offer appealing packages to residents who like to work from home.

Complications can crop up when owners are making improvements “that can actually interfere with needed technology improvements like connectivity,” Yaussi noted. If you upgrade to a more energy-efficient window, for example, the glazing can interfere with cellular connectivity. Yaussi adds that operational value-add is also top of mind. Whose Your Landlord, for example, enables renters to share anonymous feedback and reviews. With the use of AI, the platform draws on that input to make recommendations for CapEx or operations improvements.

With so many new products on the market, it’s easy to become overwhelmed. Remember that not all products are suitable for every multifamily portfolio. “Choose the right technologies for your company based on your core needs,” Loor advised. “The goal is to use proptech to simplify. Create as few touch points as possible and reduce friction for all end users—residents and also employees.”

Read the May 2024 issue of MHN.