In Chicago Market-Rate Multifamily, The Competition To Stand Out Is Fierce
A property needs to create its own story, one that is attractive to potential tenants, and yet different from other offerings in the marketplace. How do properties go about doing that?
"We live in a very different world now in terms of attention span, so you only get one shot to capture the attention of someone looking for a place," Luxury Living Chicago CEO Aaron Galvin said at Bisnow's Multifamily Annual Conference Midwest.
Competition has never been fiercer, our experts said. That plays out in terms of amenities but also the story a development tells.
"A property isn't just competing with other apartment buildings, it's competing with Facebook and Instagram and other sites for attention," Galvin said. "You have to resonate with a renter. You have to be compelling."
Galvin offered an example: a River North project he worked on had 100 units, and the developers wanted $4/SF.
"No one had ever gotten that rate," he said. "The building featured a curated collection of art, and so we built branding and marketing around the art — email, messaging, Instagram and more.
"Then when people walked in the building, they recognized the art, and felt at home. That's very important in [a] competitive market."
"What builds a a story is establishing authentic connections," Mary Cook Associates Creative Director Josh Kassing said. "One of our main demographics is millennials, who are exposed to constant information, and thus crave authenticity. You have to understand that, and your property has to reflect it."
Design is important in establishing a property's authenticity, Kassing said. It too has to resonate with renters — it has to help tell them the story of the place they are living in.
"Without that fundamental character, a property falls flat."
It is critical is to understand what the market and what residents want from a particular community, Waterton Executive Vice President of Operations Lela Cirjakovic said, and to understand what works in terms of the project's bottom line.
Thus amenity packages are going to be different in different locations, and among different rental populations, Cirjakovic said, adding that since Waterton is mostly in the value-add space, its perspective might be a little different.
Digging deep into the preferences found at a particular location — both in aesthetic terms and in how a property's amenities are curated — is important to the success of a project, she said.
Two main demographics need to be considered when it comes to amenities, WhyHotel Director-Real Estate Partnerships Jason Kamen said: younger professionals and older people, but not necessarily seniors. That might sound like too simple a division, but he said the differences are real.
"Trying to find an amenity package that satisfies both of those demographics isn't an easy thing to do," Kamen said.
Overall, multifamily is a very traditionally oriented industry when it comes to amenities, Kamen said. What is perceived to work tends to be in developments for decades. Hospitality, on the other hand, is more inclined to experiment when it comes to amenities. For instance, hospitality is driving the trend toward experiential amenities.
Property management might now better be referred to as tenant experience management, the speakers said. The success or failure of a development is now all about the experience the property allows its tenants to have.