Industry News | Wk of March 26
HOT & RELEVANT TOPICS
No Coffee Breaks Needed: Companies Add Service Robots to Workforce
Service robots don’t have a prominent role in the multifamily space quite yet, but it’s happening in other industries. Companies such as Ernst & Young and Walmart began experimenting with software programs to automate mundane tasks and are reaping the benefits by saving employees millions of hours of time. The market for service robots is expected to rise to $2.9 billion by 2021, up from $250 million in 2016. While convenient, this could lead to a reduction of four million jobs, according to Forrester analysis. Read Sarah Castellanos’ article in the Wall Street Journal.
Most Real Estate Chief Execs Are Complacent About Tech and Social Disruption
Complacency continues to exist in the real estate world with regard to impact of technological and social change, according to a new report from Urban Land Institute and PwC. In a survey of 1,300 CEOs across the globe, only 10 percent of real estate CEOs said they were concerned about the rate of technological change compared to an average of 38 percent across all sectors. Only 7 percent said they were concerned about the effects of changing consumer behavior, compared to 26 across all sectors. The report suggested real estate leaders are slow to embrace change partly due to hiring the wrong people, partly due to fear of change. Read Mike Phillips’ article in Bisnow.
Residents Will Pay More For These Tech-Enabled Amenities
Renters not only crave tech amenities – they demand them. But they are also willing to open their pocketbook for them. A whopping 86 percent of millennials are willing to pay one-fifth more for a smart apartment, according to recent survey of 1,000 renters by Schlage and Wakefield Research. Sixty-one percent of these renters are more likely to rent an apartment home equipped with keyless entry and 55 percent are willing to pay more for a home with a smart lock. In addition, the study found that Class A apartments equipped with digital package lockers collect an average of $237 more per month in rent for a one-bedroom apartment. Read the article in Multifamily Executive.
IN THE NEWS
Study: More Social Amenities Actually Makes Apartment Buildings Less Valuable
Resort-inspired pools, club-quality fitness centers and expansive clubrooms can attract residents, but a recent study indicates that highly amenitized buildings have sold for significantly less in one major U.S. market. Research by Newark Knight Frank discovered that of the 26 communities sold in the Washington, D.C. area over the past five years, buildings with five or more social amenities sold for an average of about $31,000 less than those with four or less. The study concluded that communities with less than four social amenities sold at a 7.6 percent premium over those with five or more. Read Jon Banister’s article in Bisnow.
Economy Watch: The Most Innovative States of 2018
Judging based on 22 key indicators of innovation-friendliness, WalletHub concluded that Massachusetts is the most innovative state in the nation in 2018 with nearby Maryland ranking second. A strong tech presence generally leads to a healthy apartment market, so developers and owner/operators have taken note. The Rocky Mountain Region wasn’t left out, as Colorado ranked sixth and Utah eighth. On the other side of the spectrum, Mississippi ranked last, followed by Louisiana and West Virginia. Read D.C. Stribling’s article in Multi-Housing News.
Millennials Spend More on Rent Than Previous Generations
By the time they turn 30, the average millennial will have spent $92,600 on rent. While their earning power is higher than previous generations, that amount still reflects 45 percent of their total income. Gen Xers spent an average of 41 percent of their income on rent in the 22-30 age span while Baby Boomers spent an average of 36 percent, based on U.S. Census Bureau data. In addition to the heavy rent burden, millennials also face steeper financial challenges than their predecessors due to ever-increasing student loan debt. Read Florentina Sarac’s blog on RentCafé.