Why Service is Key to Retaining Class A Renters
As the amenity wars continue, service becomes more and more important to win and retain renters. While a Peloton studio or golf simulator may get traffic in the door, the leasing team, property managers and service-based amenities will set the tone for the lifestyle of the building. Today’s Class A renters are savvy. They understand price per square foot; they know how to concession hop; and ultimately, they want to live in the best building that offers them not just amenities but a five-star lifestyle. In Chicagoland, the number one reason renters seek a new apartment is cheaper rent, and the second reason renters say they move to a new community is apartment management, according to the 2017 NMHC Renter Preference survey. In today’s competitive luxury apartment marketplace, the idea of service as a key amenity to hook a resident not only to sign a lease but also renew the lease is a thought worth exploring.
What can the multifamily industry learn from the hospitality industry?
Rent is no longer exclusive to the unit a renter occupies. Renters are paying for the entire lifestyle the building offers, like hotels. If you think about the last really great hotel stay you had, then the thought of a doorman or concierge going that extra step for you may come to mind. It certainly does for me. The word “no” is almost forbidden at top hotels and replaced by “my pleasure.” Hotel staff wants to make anything possible for you to enjoy your stay. I think multifamily is taking a note from the hospitality playbook and finding more ways to say yes. Maybe a property has a full-time concierge on staff that can take a resident’s dog out for a walk, bring a package to their door or let a family member into the unit before the resident returns from work. Whatever the situation, management teams are beginning to become more accommodating.
More Everyday Conveniences
While a coffee vending machine may add additional revenue to a building, the satisfaction of a resident receiving a complimentary morning coffee on the amenity deck may be worth more when it comes time for renewal. I recently toured Onni’s newest apartment building in Chicago, Old Town Park, and the amenity floor offers complimentary water and beer. I’m not saying every building should offer these two specific beverages, but the idea that drinks are complimentary certainly enhanced the experience.
As a former property manager, I understand the need to optimize a building and create additional streams of revenue. There is a delicate balance between fostering resident satisfaction and breaking a budget, but decisions should always be made in the owner’s, not property manager’s, best interest. This means that it’s more economical to spend extra in order to retain a renter than to offer considerable amenities locking down new leases. Plus, renters talk with their friends. Going above and beyond to ensure tenant convenience always leads to more lease referrals in the future.
The space may sell the place, but we all know that the demo kitchen, yoga studio or other posh community amenities offered in the building could stand to be more utilized. Resident events are an easy way to set the stage for the lifestyle a building offers and to get residents spending more time on the amenity floor. Creating experiences, from cooking classes in the presentation kitchen to wine tastings on the pool deck to complimentary yoga classes on Sundays, may have a bigger impact on renter satisfaction than a simple resident event with cheap wine and plastic cups. Reservable rooms and ample community space also enable residents to easily bring their friends and family groups into amenity spaces and partake in building amenities. Everyone likes to show off, and if a resident has wowed their personal circle with his or her lifestyle then they’re less likely to give it up.
Ultimately, the services offered to today’s residents are synonymous with customer satisfaction. As a broker, I often delve into the question of how well used amenities are utilized. If you’ve already had re-felt the pool table, it’s a sign that residents are fully enjoying their space. They’ll renew, they’ll refer and that’s a great story to represent the asset.