Industry News | Week of Dec. 4
HOT & RELEVANT TOPICS
Peloton No Longer Peddling to Multifamily
Peloton—makers of the trendy spin bikes which feature streamed live group workouts and real-time training with friends—recently announced that it is changing gears and will no longer sell to apartment communities. In September, Peloton issued a statement that it is focusing sales efforts on individual customers, though it will continue to sell to wellness facilities, multi-tenant office developments, country clubs and hotels, so that “our members stay connected to their fitness routines while they are away from home.” The announcement may impact the fitness centers at a significant percentage of apartment communities—many of which promote Peloton’s bikes among their amenity features.
Survey Says: Smart Tech Now a Necessity
Smart-home technology has made the leap from luxury to necessity, according to the new Xfinity Communities survey. While basic smart-home features such as locks, thermostats and lighting were already in place at two-thirds of the properties responding to the survey, the results also showed that the benefits could go much further. Still largely untapped is the ability to remotely monitor building infrastructures such as water and energy systems, and realize efficiencies-related savings. While resident buy-in and staff training remain minor obstacles, the ability to market to residents willing to pay a premium for the latest technology makes smart-home integration a no-brainer.
What Rent Control Means to Residents With Pets
As rent control stretches closer to reality in some locales, the apartment industry is bracing for some of the trickle-down effects. Some of those might involve pets. Adam Frisch of Lee Associates Residential NYC theorizes that some rent control measures might prohibit communities from charging a pet deposit. To compensate, communities might be quicker to ban pets entirely or will make up for the introductory fee by charging a higher base rent to help recover pet-related damages. If a significant number of communities choose to ban pets, pet owners will have fewer options and likely will have to pay a higher base rent to live with their furry friends.
IN THE NEWS
The Looming Talent Gap in Property Management
As renting becomes a preferred way of life for larger chunks of the population, property management jobs are set to spike 10 percent in the next five years. And as today’s renters become more tech savvy, the skill set required as a property manager has evolved, as well. While older property managers veer toward retirement and a smaller percentage of young people enter the industry, a talent gap has become present. A recent Multifamily Executive survey of 1,700 property managers indicated that only 11 percent of the workforce was new in 2019 compared to 23 percent two years prior. The primary takeaway is the property management is a hot job few people have heard of.
Top 5 Multifamily Markets for Rent Growth
Pensacola, Fla., topped the list of markets with the highest rent growth over the past year, leading three secondary markets featured in the top five. With 8.3 percent rate growth, Pensacola outpaced Phoenix (7.9), Huntsville, Ala. (7.1), Las Vegas (6.4) and Portland, Maine (6.3). The national average for rent growth between October 2018 and October 2019 was 3.2 percent. Hurricane Dorian impacted rent growth in Pensacola’s case, but like its counterparts on the list, the city features significant growth in population, new jobs and pending multifamily developments. In Phoenix and Las Vegas, a massive influx of new and anticipated jobs is largely driving rent growth, while unemployment rates of 2.1 or lower are fueling the rate climbs in Huntsville and Portland.
Multifamily Construction Labor Shortages May Start to Ease Next Year
Apartment developments are taking an average of 11 months longer to complete as the industry struggles to find qualified construction workers. Relief might be in sight in 2020, partly because the developers are finally poised to cut down on the number of new units. While Q4 numbers might give the hint that conditions are getting worse—developments are starting an average of 5.5 months late and finishing another 5.5 months late to account for the 11 months—the amount of construction workers per square foot will begin to normalize in 2020. The number of open construction jobs was roughly 338,000 in September, up significantly from the 100,000 openings in 2015.