Industry Executives Preview 2022: Part 3
The industry and its leaders will continue to contend with the numerous impacts of the pandemic in 2022, including construction, technology and lessons learned, in part three of our executive preview.
Multifamily construction has outpaced it’s single-family counterpart by a wide margin during the past year. According to RealPage analysis of the latest Census Bureau data, multifamily permits increased 34% between October 2020 and October 2021, while single-family permits were down more than 6%. Multifamily starts jumped nearly 40% year-over-year compared to an almost 11% drop in single-family. However, construction delays have impacted multifamily completions, which are down nearly 32% from October 2020. In contrast, single-family completions are up 3.5%.
“In the Southeast market, there is a huge pipeline in every market and in some cases record units under construction to be delivered, so that product is definitely coming up,” says Chris Burns, Senior Vice President with Lincoln Property Company and NAA 2022 Secretary. “Absorption is going to be pretty strong again early in the year if that starts to soften, then what happens in every development cycle, concessions will go up to try to maintain that velocity if the market softens a little bit.”
“COVID-19 has had a severe impact on the construction supply chain. Not to mention the increase in the cost for some of these materials have gone up dramatically—lumber, steel, drywall, plumbing components and electrical—meaning the pandemic and supply chain and inflation, it’s all having a serious impact right now,” says Warren Rose, CEO of Edward Rose & Sons.
Preparing for an impact to the supply chain can only go so far, but Traci Hall, President – West Region with AMLI Residential, has found it most beneficial. “Elevators and mechanical system parts that are critical to a buildings function are in short supply, as are the labor to install them,” she says. “Ordering in advance and stockpiling, paying for preventative maintenance and frequent inspections will go a long way to mitigating the supply chain issues and challenges.”
“The one technology that got really expedited with the pandemic was the whole concept of self-guided touring,” Burns says. “While that had come to the market, certainly before the pandemic started, it forced a lot of us to get comfortable quickly with that concept because when we were on lockdown and didn’t really have people or our people were locked in the office and couldn’t interact with customers, the whole self-guided—in order to get people out to physically see units—became a great option in the playbook.”
Hall found virtual learning and meetings to be more effective and efficient—a way to provide a learning platform to larger audiences.
While Zoom, Teams and other digital meeting options proved useful this past year, Ronda Puryear, CAM, CPM, President, Residential Management with Management Services Corporation (MSC) and NAA 2022 Chair Elect, mentions there were some things lost by being away from staff. “I think the in-person aspect is important because you lose a lot when you don’t have that ‘water cooler’ collaboration. It’s the conversation that you never knew you were going to have until it happened because you ran into someone. Those are the things that you don’t have on Zoom.”
The virtual aspect of the industry was around before the pandemic, but it picked up steam as office closures and other shutdowns continued. Prospective residents are now able to visualize their potential new home in a better light, notes Don Brunner, President & CEO of BRG Realty Group and NAA 2022 Chairman of the Board, who added virtual tours have improved during the pandemic.
“It is allowing more residents to make decisions without seeing the actual physical site or units,” he says. “Prospects can go through and ask questions through a virtual assistant about the community or about items around the community or features and benefits—even scheduling appointments without talking to someone is also a benefit today.”
Brunner is excited to see where future technology leads the industry. “COVID has challenged ours as well as other industries to look for additional ways to conduct business virtually or in a remote setting,” he says. “It wasn’t that long ago our industry thought online leasing and renewals were state of the art. Now our industry has advanced to the point of artificial intelligence and bots which interact with our residents during times our teams are unavailable. We are excited to see the future and where it leads.”
Puryear and MSC have found prospective residents prefer to go on self-guided tours, renting homes over iPad with FaceTime. They already had this in their student portfolio but have now started seeing that bleed into their more conventional portfolio.
Lessons learned and future hopes
“We learned, and the residents learned in particular they probably want a little more of their own space, particularly outdoor space,” Burns says. Balconies and patios became extremely important for those who had the opportunity to step outside. “We went through a period where balconies weren't as important and patios weren't as important, particularly in inner cities. I think those people that were in units without balconies quickly learned that the people in the building across the way that had balconies could at least go out and sit on their balcony during the day and get some fresh air. Having outdoor space and balconies in the common areas; outdoor space where people can get outside; and some amenity space and gathering space to be able to social distance means that residents are still able to live outside the unit to a certain extent.”
From an industry advancement point of view, the pandemic hasn’t been all negative. “There are positives that have come out of the pandemic—new systems that we have in place that won't go away that I think are much better,” Puryear says. “Things that we're doing that help people have more time at home with their family, that help people get home earlier in the day or finish their day from their home office, which creates a better mental state for everyone.”
“The industry, in general, is in a good trajectory, better than it has been… so, it appears to be a bright future,” says Rose.
Michael Miller is Managing Editor for NAA.