Daily Archives: October 4, 2012

Top Ten Apartment Market Rent Growth Leaders for Third Quarter 2012

by  – PropertyManagmentInsider.com

When MPF Research releases its quarterly research numbers for the U.S. apartment market, I look forward to finding out which metro secures the top spot for rent growth. During the past few quarters, the top spot has been held by one of two metros: San Jose or San Francisco.

It’s the apartment market equivalent of a great sports rivalry or the quarterly version of the USA Today College Football poll.

So who came out on top for the third quarter of 2012? Let’s get to the box score:

Rent Growth Leaders in Year-Ending 3Q 2012
Rank Metro Annual Rent Growth
1 San Jose 8.0%
2 San Francisco 7.5%
3 Oakland 6.7%
4 (Tie) Charlotte 6.3%
4 (Tie) New York 6.3%
6 (Tie) Columbus 6.1%
6 (Tie) Hartford 6.1%
8 Denver-Boulder 6.0%
9 Houston 5.5%
10 Nashville 5.1%

 

And San Jose is back on top after ceding the top spot to San Francisco last quarter. However, even in these top-of-the-chart markets, the pace of rent growth has cooled notably. Annual rent growth peaked in late 2011 at 13.2 percent in San Jose and at 14.6 percent in San Francisco.

Other major markets performing well but not enough to push them into the top 10 were Boston (4.9%), Portland (4.8%), Austin (4.6%), and San Antonio (4.5%).

For additional information and research about the performance of the U.S. apartment market during the third quarter of 2012, visit the following resources:

What Does Generation Y Want from an Apartment?

by  – PropertyManagementInsider.com

First-class amenities. A hip, urban feel – even if it’s in the suburbs. A strong sense of community. Stellar and fast customer service. And all at a reasonable price.

These are what Generation Y look for in an apartment, according to a panel of young industry professionals at the recent MPF Research Southeast Apartment Markets Conference.

The wants and needs of this particularly demanding generation have been hot topics among the multifamily industry’s senior executives, seeking to better understand this fast-growing segment of the multifamily market. To help find some answers, MPF Research assembled a panel of Gen Y’ers working in the apartment industry to share their insights with nearly 300 professionals at the September 18 conference in Atlanta, touching on the topics of development, operations, and marketing.

Development

To lure the 20-something crowd, apartment communities should be designed to facilitate their social lifestyles, the panel said.

“You need amenities to get people to want to host and that bring a sense of community to the property,” said Don Hoffman, regional director for The Worthington Companies in Atlanta.

Such amenities include a truly resort-style pool area (the term “resort-style” has been used too generously to describe even very average pools), dog park (and stock it with amenities like a dog-washing station), market-quality gym (small gyms with minimal equipment will go unused) and others that encourage social interaction.

“We’re all about being together,” said Tyler Washburn, design intern at the Dallas-based firm Humphreys & Partners Architects.

And these amenities should be prominently placed in public view, not hidden away at the back of the property, panelists said.

“Appearance is a big deal to us,” Washburn said. “You want to want to tell your friends where you live.”

But many developers have emphasized features that don’t appeal to Generation Y, the panel said. These features include video game rooms, movie theaters and sport courts. Business centers aren’t a draw either, according to panel members, who were also lukewarm on tanning beds and demonstration kitchens.

In addition, so-called green features are nice, but not necessary – especially if they make an apartment more expensive.

“The part of me that focuses on being green doesn’t translate to my pocketbook,” said Taylor Brown, development associate at The Integral Group in Atlanta.

Brown said he likes to bike or walk all that he can, but doesn’t want to pay more for green-specific features – a point several others agreed with.

Operations

Despite the differences between many senior executives and their Generation Y clients, at least one customer service axiom spans the generation gap. “It’s important to be responsive to residents,” said Jessica Sanders, community manager for Westdale Asset Management in Dallas.

And today’s young adults expect up-to-the-minute responsiveness.

“We want to know immediately what’s going on,” said Carolyn Lewis, recruitment manager for Atlanta-based Gables Residential.

For example, if there is a broken gate on the property or the water has been turned off for maintenance, Generation Y expects an email or text message instantaneously. Attaching a note to their front door “is not acceptable,” Lewis said.

That’s why apartment operators should embrace technology, the panel said. Generation Y is used to paying bills, submitting and tracking maintenance requests, and getting notifications online, through email, or via text messages.

The best way to embrace technology is hire office staff that “speaks to the type of lifestyle and sense of community you’re trying to create,” Hoffman said.

“You want people,” Sanders said, “who are going to relate to the clientele.”

Leasing agents and other office staff should be adept at communicating digitally, the panel said. Another common complaint among young professionals is office hours. Panelists said they often work late or stay out late, making it difficult to pick up a package or conduct other business at the property’s office during usual office hours.

“When we want to see office staff, it’s not going to be from 9 to 6,” Hoffman said.

In addition, community events should be planned with Gen Y’s schedules and desires in mind, according to the panel. They should be convenient for young professionals – held, for instance, off site and after usual business hours or on weekends. And operators should ditch the typical pizza-and-a-movie events – which panelists dismissed as boring.

Marketing

When it comes to Generation Y, operators should throw out traditional marketing strategies – and even some of the newer ones, according to the panel.

Bombarded by advertisements throughout their lives, this generation is skeptical of traditional marketing. To young adults, “word-of-mouth is everything,” Hoffman said.

The panelists said they don’t routinely use Internet listing services, opting instead for blog comments found through Google searches and descriptions in posts on Craigslist. After spotting a candidate, they usually visit the property’s website, which can be a positive or negative experience, the panel said.

That’s why operators should invest in their property websites, which Hoffman called a “front door for the digital environment.” To better their chances with Generation Y, operators should have a mobile version of their website to ensure it’s accessible on smartphones and iPads, Lewis said.

And while social media might seem to fit with their reliance on word-of-mouth, Generation Y doesn’t use it to find or select apartments. Instead, the panel said, social media is best used to foster relationships between the property’s residents and management.

Still, a poor social media presence can hurt a property in the eyes of Generation Y. Little interaction with users and infrequent updates reflect poorly on the property’s management.

Adam Zuckerman, acquisition associate at Wood Partners in Atlanta, said he had never checked his apartment’s Facebook page until recently – and found it sparse.

“If you’re going to have a Facebook page, be sure and update it,” Zuckerman said.

 

MPF Research will host a similar panel session, featuring members of Generation Y from within the apartment industry, at their Texas/Southwest Apartment Markets Conference on November 7 at the Hyatt Regency in Downtown Dallas. Details and registration information can be found here: https://www.realpage.com/apartment-market-research/apartment-market-trends/southwest-conference