The multifamily sector has been beset in recent years by an amenity war. As buildings evolve, and tenant expectations shift, many property owner and managers are seeking new ideas by turning to another sector: hospitality.
Multifamily developers are on pace for the second-highest annual completions count of this construction cycle, according to CBRE’s 2018 U.S. Real Estate Market Outlook, with over a quarter million units expected to be delivered to the 62 largest markets in the country. While these projections are down from peak deliveries last year, supply should outweigh demand for some time.
Where there is supply, there are amenities. So what will the next battle in the amenity war look like? According to Michelle Mariani, senior director of business development in Chicago for Village Green, owners and operators of multifamily buildings should focus on intangible, service-based amenities.
“It’s more about the resident experience. What we would call in the hotel world the ‘front-of-house’ experience,” Mariani said.
Before joining Village Green, Mariani spent 13 years in the hotel business with Four Seasons Hotels and Resorts and Starwood Hotels and Resorts. She and her many colleagues with a similar background are drawing on that experience to create communities that people want to live in.
Physical amenities, such as gyms and pools, aren’t going anywhere and research shows that having them can drive up rents. But according to Mariani, a more effective enticement can be delivered by services and building employees.
“We know the number one driver of residence experience is the people we have overseeing our communities,” Mariani said. “Creating a connection with the concierge (the face of the building), the property manager and the maintenance staff creates a sense of belonging.”
Village Green, which owns and manages apartment communities around the country, heavily stresses this hospitality mindset of resident engagement. All of the company’s associates go through the “University of Village Green” where property management, client services and other tactics are provided.
Many physical amenities, like a game room, lounge or mini theater, promise to deliver an experience that some prospective tenants might find attractive. But there is a more valuable asset that amenities can deliver, according to Mariani. “The one thing that people don’t have enough of, and that you don’t ever get back, is time,” she said.
Services like dog walking, house-cleaning services, grocery delivery and 24-hour package delivery make the residents’ lives more convenient and freeing. Creating services within communities not only attracts tenants, they make them less likely to want to move.
One property that Village Green manages, The Bernardin at 747 N. Wabash Avenue in Chicago, offers many hotel-like amenities. In addition to physical spaces like a fitness center and rooftop deck, The Bernardin offers full service concierge, on-site maintenance and property management, package handling with email and text notifications, storage lockers and valet dry cleaning and laundry service.
“Overall, being able to create a sense of home through hospitality and adaptable services seems to be outweighing ‘the next big thing’ in amenities,” Mariani said.