Resident Retention: A Two-Step Solution
Satisfaction takes priority for property managers seeking higher resident retention rates.
Owners and managers in the apartment housing industry are no different than their residents when it comes to contending with the pandemic: Everyone is searching for a way to adapt to the disruptions and challenges in their daily lives.
Resident retention, critically important to the industry, improved during the early months of the pandemic, according to RealPage. However, it leveled off slightly at the end of 2020, and a deeper dive into specific markets reveals greater insight.
Resident retention hit 58.5% in April 2020 but slipped to 51% in December. “Shifts in resident retention rates at lease expiration in late 2020 to early 2021 simply reflect a return to the pre-pandemic norm for most properties in most metros,” said RealPage Chief Economist Greg Willett in a release. “That’s an important point that bears repeating: Most communities are not struggling with mass move-outs.”
Metros like San Francisco and San Jose witnessed large drops, with the Bay Area cities sinking below 40% retention. However, affordability isn’t the only factor sparking the change, renters are also looking for more space in the suburbs.
New York City also has seen a reduction in retention rates. A recent Bloomberg article cites data from Miller Samuel Inc. and Douglas Elliman Real Estate, showing the value of incentives on new leases in Manhattan are removing, on average, nearly 2.5 months of the lease. New lease signings in Manhattan are at their highest since January 2008, yet apartment listings neared 12,500, almost triple the number from the previous January.
For Chris Fletcher, Director of Development with Atlanta-based developer, owner and manager Cortland, resident retention is a two-step solution. “Build something [residents] are happy with and want to be in long term,” Fletcher says. That’s step one. Part two revolves around management. “[Property managers must] engage directly with them and build personal relationships. Address issues promptly so they are left with a good taste in their mouth and feel like this is a home as opposed to a temporary stop.”
This is accomplished by focusing on building the project and developing the brand. For Cortland, this was most recently seen in Birmingham, Ala., with its brand-new high-rise, Cortland Vesta. It’s the first luxury high-rise in the city in more than three decades. This unparalleled living experience—rooftop amenities, gym, pool, outdoor courtyard with a view of the Birmingham skyline—is how Cortland is keeping residents happy at home during tumultuous times.
Michael Miller is Managing Editor for NAA.