Multifamily development is back in a big way. With all of the advances in building systems and technologies, apartment asset managers might wonder how sophisticated the new communities coming online are from an operational standpoint.
Certainly AMLI is one of the development and market supply culprits: we have a pipeline of over $2 billion right now representing 10,000 units in development, which, when compared to our stabilized portfolio of 18,000 units, is clearly a huge amount.
But are back-end, space-age operational bells and whistles getting incorporated into new developments? It’s probably more correct to say that new developments are still striving to be environmentally sustainable, and to incorporate systems that ultimately speak to customer satisfaction.
On the sustainability side, every single one of our 32 properties under development will be LEED Silver certified or better. We are spending one percent of total development costs to go the extra mile to be green. From energy efficient lighting to stormwater retention to herb gardens and low flow toilets and showers, we are doing all of those things as customer-focused investments that also help from a marketing standpoint.
For everything asset management related, when it comes to new development, we’re always exploring options that result in customer satisfaction, so once a building is built we can reduce the headaches of the day-to-day operations and asset management staffs.
Consider advanced building systems, where we are exploring a lot of options with sound attenuation to again make the resident living experience better. Those investments are nevertheless still a difficult call. We don’t want to dump $1 million dollars into a development and still have the same sound issues.
In that sense, we are still dealing with a lot of the brick and mortar issues even as new multifamily supply comes online. I think we are decades away from being able to run an apartment building like a spaceship. The Nest programmable, learning thermostat is interesting and we’re exploring putting that in as a cool factor, but I’m not sure how much that it will be used or appreciated. It’s not really helping me as an asset manager or the company per se.
Spaceship sophistication of multifamily communities will get there someday, but for now 90 percent of our time is still concerned with people-driven issues, and customers still drive the major decisions we make in both development and multifamily asset management.
Ken Veltri is Senior Vice President of Asset Management for AMLI Residential and a member of the advisory board for Maximize: the 2014 Multifamily Asset Management Conference. Register for Maximize today for discounted access to the apartment industry’s only annual event singularly focused on asset management and the creation of value from new and existing multifamily communities.