In the Media
Note: This article was originally published on multifamilyexecutive.com.
by Carl Malcolm
According to Emerging Trends in Real Estate 2021, a new report from the Urban Land Institute and PwC US based on their survey of more than 1,600 leading real estate industry experts, the COVID-19 pandemic did not necessarily generate new trends in the multifamily housing market, but sharply accelerated trends that were already underway.
Migration and appeal of suburban locations, preferences for floor plans that support work-from-home options, and integrated outdoor social and recreational areas were already influencing the design of multifamily residential projects and have been consistent trends in the report for the past five years.
However, the pandemic contributed to the rise of new trends, including an emphasis on personal health and safety as it relates to building design. In fact, 82% of the real estate professionals surveyed in the 2021 Emerging Trends report indicated that health and well-being will become more important across all sectors of real estate, and will result in projects that feature improved HVAC infrastructure and advanced technologies, such as sensors and touchless entry options, to mitigate potential contamination.
Because COVID-19 disrupted every real estate market, including the multifamily housing market like nothing else in quite some time, architecture has the potential to play a crucial role in creating better, safer, healthier, and more livable built environments. While developers struggle to address the “new normal” it is important to remember that future flexibility will be critical to successful projects in a post-pandemic era.
The most important thing to remember is to not design a solution to a problem that may be irrelevant in two years. The key takeaway it that as “normal” continues to evolve, the buildings developers design must have the flexibility to adjust as necessary. Developers need their housing projects to serve the market and be successful today as well as in the future. Considering that projects designed today will not be completed and occupied for two years, developers want to balance current and future needs and create spaces that can be reconfigured or repurposed without being rebuilt.
Savvy developers are also mindful that one generation younger than millennials have a higher risk aversion than either millennials or baby boomers. Because they are the first generation to be fully connected digitally—as they are interpersonally interlinked through both the internet and technology—they seem to be more cautious and avoid risk today, due to the theory that they had a “safety net” growing up. This is true of even younger individuals, too, as they are accustomed to having devices like a GPS guiding their actions. The culmination of these generational impacts leads developers to further emphasize healthy and safe living environments.
In a post-COVID world, developers will need to address potential customer demands that extend beyond traditional priorities of location and amenities and include residences optimized for hygiene, health, and well-being as COVID-19 has sensitized consumers’ perception of safe living environments. Emerging design drivers include:
The impact of the coronavirus on the leasing activity has been significant. Capture rates have soared in the suburbs and exurbs, with as many as 50 new tenants per week signed in the early months of the pandemic.
As more people work from home, locations in the urban center, or by a rail station, are becoming less important, and those properties are seeing a decline in occupancy rates. With no commuting costs, potential residents can move out of the urban core and get a larger apartment with a study or second bedroom at the same, if not lower, rate.
The leasing experience also changed dramatically. Overnight, big open leasing offices with generous seating areas and coffee bars became a liability.
Recognizing this, during the first months of the pandemic, many developers made their offices “pandemic friendly” by reconfiguring open areas with smaller pocket seating and constructing leasing offices with doors. Several leasing offices installed Ring video doorbells as a stopgap to give staff a means to buzz in visitors and communicate with them while maintaining social distancing.
Looking forward, developers and leasing agents will need to enhance their strategies and tools to conduct leasing remotely. Strategies include:
Many agents were doing these prior to the pandemic, but the need has dramatically accelerated. Potential residents can view standard unit layouts on the property websites to find available units, then either do a live video walk-through via Face Time or review a prerecorded video of the specific unit.
Leasing staff have implemented a curbside paperwork/documentation process, allowing new residents to complete the application and sign appropriate documents in their cars.
Another tour option allows potential residents to do a self-guided tour, where the prospect is given a fob and then conduct a tour on their own of the property. While not ideal, it does have the advantage of meeting social distancing requirements while allowing the prospects to get a feeling for the space.
These methods have proven effective and will have a greater role in leasing programs from application to signing. By utilizing online resources, renters will be educated before in-person visits, keeping on-site traffic narrowed to qualified prospects.