Apartment Q&A: Refined Renters Drive Today’s MF Experiences

Connect Apartments is planned this week in Los Angeles. The conference features a host of commercial real estate experts who will cover a wide range of topics ranging from housing affordability, the economy, as well as trends impacting investment, development and finance of apartment assets.

As we gear up for the event, Connect Media asked Maverick Residential Company’s Jeff Krohn to share his thoughts about the multifamily market. Check out our latest 3 CRE Q&A to find out what is driving the apartment market today, factors investors must consider, and ways tenant demand is driving decisions.

Q: What are some of the overarching trends you see driving the apartment market as the year progresses?
A: I think some of the overarching themes that I have seen pop up in 2019 have been a renewed focus on amenities, renovations, as well as the need for work force housing. The amenity wars we’ve seen in the recent past in new developments no longer make sense, as costs have risen across the board. Now the question begs, what truly brings value to residents and what rent can be captured because of that perceived value? The same can be said for renovations; as margins shrink and the ability to push rents tightens, the need to strongly assess what pieces of the renovations have a direct correlation to an increase in rents, has become the focus.

Q: How can and should multifamily owners approach their decisions today, given the length of the cycle, interest rates and overall economic conditions?
A: Given the length of the cycle, the interest rate climate and economic conditions showing signs of slowing, I think that owners should stay prudent. Buying location and levering appropriately would be my two main concerns at this stage. I also think that in the development world, assessing market rate, workforce housing should be a focus; given the increasing lack of new, affordable product in the market.

Q: What are some ways tenant demands are changing how portfolios are operated today?
A: Tenant demands and their impact on operations have really manifested in a renewed focus on the service they are receiving, as well as the seamless experience. From the first point of contact, to their move-out inspection and refund, bumps in the road need not apply. I also think the focus has shifted towards nature, disconnecting and being more conscientious of the earth. The need to be alone, unplugged, but to do that together, has shifted much of the programming that is being rolled out. As the renter becomes more refined, the experience surrounding that must as well.

For comments, questions or concerns, please contact Dennis Kaiser