Survey: Renewal Rate at 61.4 Percent, But Falling 

Apartment residents’ likelihood of lease renewal continued a downward trend for the four quarters ending June 30, 2011, according to Kingsley Associates’ multifamily resident survey results.

During this period, 61.4 percent of residents surveyed indicated they “probably” or “definitely” would renew their lease. After peaking at 65 percent in mid-2010, this figure has declined steadily.

The trend suggests that residents are beginning to react to the revenue optimizing practices associated with the past year’s low apartment vacancy rates. “We’ve heard from our clients that they are managing for value, not just retention,” says John Falco, Principal, Kingsley Associates’ Atlanta office. “They are monitoring resident feedback extremely closely, but at the same time, they’re capitalizing on a favorable market.”

New York and Chicago lead major markets in resident renewal intent. In New York, 78.9 percent of surveyed renters indicated intent to renew, many of them influenced by the city’s famous rent control policies. Next in line was Chicago, where 65.8 percent of residents plan to renew. Also in Chicago, 85.8 percent of residents called their overall satisfaction level either “good” or “excellent.” This compares to 76 percent nationally.

Among residents likely to renew, location was cited as a factor by 73.4 percent, followed by community appearance at 45.2 percent and apartment features/finishes at 44.5 percent. And, while rental rate was the most frequently cited factor by residents unlikely to renew (43 percent), community management (24.9 percent) was as important as apartment features/finishes (24.3 percent).
Kingsley Associates surveys in excess of 1 million apartment units annually on behalf of its clients. The findings outlined above are based on survey responses received between July 1, 2010, and June 30, 2011.

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