In the 2015 NMHC Apartment Strategies Outlook Conference session, “Got to Get You into My Life -- Who Are We Developing For?” panelists reminded audience participants that they shouldn’t forget to do their development homework. From keeping in mind everything from income to education to amenities, session panelists focused on what they’re doing upfront to get development right and, ultimately, draw prospective residents in a specific market.
Behavior characteristics are one emerging multifamily trend that involves creating projects that have an emotional resonance. At its core, this development strategy involves ensuring that everyone, from baby boomers to millennials, is comfortable. For example, researching a development market may reveal that baby boomers want to feel young with recreational options galore, while millennials want to feel like they’ve moved up in the world with spacious apartments and oodles of amenities.
In addition, many super smart people are grappling with strategies to drive performance and differentiate themselves, but what’s been difficult is trying to think of new things to do when much of what already has been done is still working. From the panelists’ perspective, success in tailoring developments to a particular market isn’t just about amenities anymore, it’s about the services as well. For example, pet parks have become mobile grooming stations, fitness centers now may have yoga classes. And essentially anything that can be done to take the “noise” out of residents’ lives means a lot to them. Residents are, in a nutshell, looking for time -- give them back their time and value in a specific community will undoubtedly be created.
Panelist Toby Bozzuto, president of The Bozzuto Group, said that they are “trying to think of themselves as bigger than the apartment industry. We learn from our peers, but we are also working to learn from people on the outside.” He emphasized that it is important to ask why brands like Apple or Tesla have almost a cult-like loyalty. Bozzuto said that, to find the answer, his company is not using the same firms that work for the rest of the industry. Instead, they are going to advertising agencies and PR firms that work in the hospitality and night club space.
“We want to resonate and be more authentic to our customer,” he said. “Our tastes are probably widely different than our customers’, so we are working to tailor development to the market with authenticity.”
There is no question that each market is different and without doing research and comps on the front end, multifamily developers won’t reap the maximum benefits on the back end. Make sure, however, to mind your ratings once your development is stabilized. Panelists emphasized that keeping Yelp and other online ratings up is essential in not only attracting new residents but also helping current residents decide whether to renew or move.
So, how does a multifamily firm know when it has ultimately been successful? All the panelists agreed that looking to absorption pace, rentals and retention is key to measuring whether a firm did enough homework and truly delivered what the market wanted.