DALLAS – The pandemic has catapulted the multi-family industry into uncharted waters. Almost overnight, communities had to adjust to technology, virtual tours and remote leasing like never before.
According to John Hull, director of performance management at Pinnacle, operators should also immerse themselves in real-time data about their own communities and comps. In this exclusive article, Hull explains how such information will help his company manage the impact of the pandemic and coronavirus on other aspects of the Pinnacle portfolio.
GlobeSt.com: What do you and your teams see in the Texas multi-family markets?
Hull: We manage properties in all four major Texas markets: Austin, Dallas-Fort Worth, San Antonio, and Houston. We see similar trends. On the operational side, the owners concentrate on maintaining the economic occupancy. We see a lot of renewals as opposed to new leases. I think residents are hesitant to look for a new home because of coronavirus fears, especially if you have owners in the market who aren't really pushing rents for renewals. In some cases, we see competitors actually lowering rents.
GlobeSt.com: How has the pandemic changed Pinnacle's reliance on comp and market performance data?
Hull: One of the things we have focused on is collecting and storing daily data so that we have a very clear point of reference if something happens again. And because of the pandemic, suddenly our customers are no longer asking about macro trends. It was a trend towards micro trends.
Via our supplier partner Radix, we can access real-time information on our properties and their comps at submarket level. We can see trends evolving day by day and week by week. And when we suddenly have a comp across the street deciding to cut rents by 10%, we can react as quickly as we need to. Depending on what the owner-customer is up to – whether it is an economic or a physical occupancy – you can really see where you are stalling and where your separation is between your assets and your rewards. You can choose the metric that you want to view. You can react and pan based on this.
GlobeSt.com: How has the pandemic – and even the pre-pandemic period – changed the role and value of community and portfolio data for operators?
Hull: I think people are starting to realize that data is king and data is the key to survival. We're getting more seasoned asset managers and owner groups that rely on data, and the operators need to be able to explain the trendlines they see. You need to provide data that will prove your point and light up. You can't necessarily give an opinion. We see that many asset managers and owner groups can speak the language of the data much better.
In this super fast-paced world we continue to move into, logging into a screen and instantly seeing where every property and portfolio is located is crucial. Here we have really focused very much on the last year and a half.
GlobeSt.com: What is the value of weekly market reports versus real-time data for your communities and businesses?
Hull: You have different organizational levels. You will have a TP who may not be looking for every one of his items every day just because of 50 or 30 items or however many they have. You rely on business intelligence solutions that make operators stand out and focus on difficult data points. They rely on their regional managers to come over every day and look at their five, seven, nine properties to make further corrections.
The Vice President will be relying more on the overall conversation, which is provided by a weekly report detailing MSA and national trends. For example, this type of report will help a vice president talk about the Dallas market with a prospective owner who operates mostly on the West Coast or the Northeast.
GlobeSt.com: You set out how COVID-19 has changed your business intelligence practices. In general, how has technology made navigating this pandemic a little easier?
Hull: It was great in several ways. We noticed that the use of our online application process has increased dramatically. Online tours, 3D tours, self-guided tours – people use these technologies.
We have also seen a huge surge in online payments, which makes the work of our leasing staff a lot easier as it takes time to scan a check, apply the amount to an account, etc. All of our properties are set up online payments.
Depending on the population within a property, you may have had residents who were not tech savvy enough to make the online payments or who for some reason didn't trust the online payments. But now, with reduced office hours and the need for social distance, you see more and more people are forcing themselves to learn these types of technologies. These developments are enormous for us, as they make the work of our employees on site easier and give them more time to concentrate on running the property.
GlobeSt.com: What do you think will be the most lasting impact of the pandemic on multi-family farms?
Hull: I think number one, people will keep using technology. Technological progress is very positive for the entire industry, for tenants, owners and managers alike. I think we will continue to see high usage of online payments as well as self-guided and online tours.
I think residents will be reluctant to move, at least for a while, and we're seeing some adjustments to work order policies because people don't want staff in their home so we need to maintain social distancing and proper procedures. The units with the work / office space and the built-in amenities of the office suite type may be in demand again.
Texas MSA data as of 9 / 14-9 / 20 obtained from Radix:
|Occupancy||Leasing percentage||NER||NER WoW change||NER change
|San Antonio||92.75%||93.88%||$ 1,110||-0.2%||0.8%|