The Ins and Outs of Centralized Leasing
The benefits are many, but the multifamily industry is still seeing some difficulties with implementation.
Centralized leasing’s popularity and widespread adoption comes with little surprise as multifamily operators realize its potential. From simplifying the rental process for potential residents to expanding upon the skill sets of the leasing team, it may seem like the perfect solution. However, with no one set method of implementation and no one brand or company defining it the same way, centralized leasing can be a challenging opportunity to tackle.
“One of the reasons why centralized leasing is so important and relevant is that it is actually quite a confusing subject with many different people trying to attack it from many different angles,” Eric Brody, founder of ANAX Real Estate Partners, told Multi-Housing News.
Defining centralized leasing
There are different ways of looking at and participating in centralized leasing. According to Brody, one such way is to use an internal management program where you can negotiate and execute a lease digitally. A virtual leasing office can allow potential renters to view a property and amenities and access to leasing documents. Other centralized leasing methods and technologies include chatbots to streamline administrative tasks and resident issues or resident enhancing experiences like a main location to access package deliveries and maintenance requests.
“Centralized leasing is one piece of a chain of managing the entire process of the lifecycle of a tenant into your building,” said Brody. It is about inserting innovative technological methods into the way residents, landlords and managers communicate, and everyone has their own method.
“We actually don’t like to think in terms of ‘centralization,’ but instead, ‘specialization,’” Noah Echols, senior vice president of marketing and customer experience at CARROLL, noted. “The process of centralizing roles is aimed at cutting costs and doing more with less overhead. Specialization on the other hand starts with the premise that where we focus expertise, we provide significantly better service, and it allows us to save money.” For CARROLL, centralized leasing means dividing skill-specific tasks to allow experts to navigate a wider scope of work in a narrower lane.
For Echols, the most critical step in efficiently executing centralized leasing strategies is defining what leasing means. “Taking the current leasing model and asking someone to do the same thing they did for one community across five is just not feasible,” he said. “Instead, the leasing role has to be broken into core parts, and then the challenge becomes how to enable fluid and regular communication across those new centralized roles.”
Dustin Lacey, vice president of marketing and technology at Mark-Taylor, holds a similar view, telling MHN that the first step towards is to decide whether your company should be operating on a full or hybrid centralized leasing model. Mark-Taylor takes a hybrid approach, meaning there is a limited or reduced footprint onsite.
After the full vs hybrid decision, it bumps down to the different aspects of the business. Lacey categorizes these as: lead management, resident management, maintenance and service, collections and accounting. All of these are ways to integrate centralized leasing. “Lead management is probably where 90 percent of folks are starting,” Lacey explained.
One of the reasons centralized leasing is unique to different companies and brands is because of the different arrays of technologies and apps available. Many firms use a customer relationship management platform to manage the leasing process.
“Finding the right CRM solution for your needs and business specificities and size is the key component,” said Stephanie Versin, SVP and head of marketing and leasing at Veritas Investments. “There are so many solutions available nowadays that a diligent selection process is imperative to the success of implementing this technology into your existing workflow.”
For example, Versin explained Veritas Investments’ CRM increases team efficiencies, provides data clarity to the prospect-to-resident lifecycle, captures communication history, manages the lead-to-lease process and identifies the lead’s source.
“No longer do we have to rely on manual source tracking,” Versin said. “Better tracking also means smarter marketing budget allocation. We know in real time which marketing channel has the highest return on advertising spend.”
CARROLL similarly uses a single CRM for its business-to-consumer operations to efficiently manage the lifecycle of the resident’s leasing journey. “The best CRM systems take an omnichannel, custom-first approach, as opposed to a CRM that creates walls between properties and forces renters into a few select channels for communication,” Echols explained.
“We are at an inflection point. Centralized leasing is no longer a wishful thought.”Dustin Lacey, vice president of marketing and technology at Mark-Taylor
To further manage the customer relationship, CARROLL and Mark-Taylor use artificial intelligence and technology to help prospective renters with basic tasks while allowing leasing agents to handle more complex issues.
“We have a fully integrated dashboard that utilizes AI, not just on the front end, but on the back end to augment what we call a ‘concierge’ who is handling both inbound leads as well as inbound from residents,” said Lacey. Everything on Mark-Taylor’s leasing side of the business is run through its internal software system that filters calls, uses AI to suggest responses on live calls, recognizes potential versus current residents and more. “All of this matters when retention is the name of the game,” he said.
No one solution is best for every company. Finding the right software and management programs is a balancing act. “Apps are the new keys,” said Brody. “We used to have thousands of keys, and now apps are the new keys.”
Impacts on the workforce
At Mark-Taylor, lead to lease conversion when the phone is answered ranges from 22 percent to 27 percent. However, if the phone call goes without an answer, that conversion rate drops to 2 percent or below.
“When you have generalists outfitting all of your service team and leasing roles you have a propensity for dropping the ball on key efforts,” said Lacey. “If you do not answer the phone the probability of it converting to a tour or lease drops by a full magnitude.”
Additionally, almost one-third of all engagement happens after-hours. Centralized leasing can manage both these more menial and after-hours tasks, allowing leasing agents to be present for larger assignments.
“You need to be in the moment when the problem occurs to resolve it,” Brody said. “If you are always paying attention to small administrative tasks you can’t use your creative mindset in the moment to solve something that is more important because you are bogged down by things that aren’t a good use of your time.”
With more time and space, leasing agents can build strong relationships with existing and potential residents, solve complicated issues and ensure a more seamless customer experience instead of focusing on the small and repetitive. Along with increasing the agent’s ceiling for potential, centralized leasing can also lead to a retainment of talent.
“Staff burnout is a serious concern in our industry. However, role specialization increases our ability to retain talent and create scalable growth,” Versin explained. “Our centralized model gives our leasing agents the ability to shine and succeed faster. This familiarity and market expertise increases engagement and boost our leasing agents’ conversion rates.”
At Veritas Investments, these strategies enabled scalable growth capabilities along with economic viability.
“We closely track employee satisfaction and we have been surprised not only at the retention that this [centralized leasing] has garnered but at the happiness it has generated around new role opportunities, new career ascendance and higher pay,” Lacey said. “We are not trying to replace the human element; we are trying to improve it and create sales roles where these concierges are able to make far more money.”
A look forward
In an industry that has been operating similarly for more than 50 years the technology and ideas behind centralized leasing, while being overwhelmingly positive, can also be risky and disruptive. As with other technological implementations real estate tends to move at a lagging pace compared to other industries. Yet, the consensus amongst experts in centralized leasing is that once a company tries it there really isn’t any going back.
“We are at an inflection point,” Lacey said. “Centralized leasing is no longer a wishful thought. You have to start the journey now, plot that path and start figuring out how you are going to tackle it.”