REAL ESTATE TECHNOLOGY PERSPECTIVES THAT COUNT

The Rise of Centralization in Multifamily

The multifamily sector experienced unprecedented growth during the pandemic as lifestyle shifts and a national housing shortage pushed rents up and encouraged many owners and operators to expand their portfolios. Now, several years post-pandemic, the market has experienced a correction – large waves of new supply in many markets have outpaced demand, and rent growth has slowed across the country. These dynamics, coupled with general economic uncertainty, have multifamily owners and operators looking internally to create value and boost their net operating income (NOI), and technology that drives centralization is a top priority.

Many owners have been using solutions that streamline leasing, resident communications and engagement, and marketing for some time now, but there is an increasing demand for technology to optimize every aspect of property management. This includes things like maintenance and repairs, which are typically quite cumbersome and often require time-consuming coordination between onsite staff, vendors, and residents. For owners and operators of large apartment portfolios, each month brings thousands of new work orders and hundreds of new turns, presenting an extremely complex maze of to-dos for property teams that can be costly if not handled efficiently.

Optimizing the Maintenance Management Process

As the industry continues to move toward centralization, RET is committed to investing in companies that leverage sophisticated technology to drive efficiency across all management processes – including maintenance. It is this objective that led to our most recent investment in SuiteSpot.

Originally developed to streamline and improve multifamily maintenance management, SuiteSpot’s platform has evolved to help property owners and operators centralize every aspect of maintenance and capital operations at scale. The platform leverages artificial intelligence (AI) to help property owners and managers complete maintenance and capital projects like make-readies and unit turns in an efficient, cost-effective manner, helping them get vacant units back to market as quickly as possible. The entire maintenance workflow, from work order origination and execution, to vendor management and resident engagement, is facilitated through the SuiteSpot app.

SuiteSpot also collects property data so management can easily track key performance indicators (KPIs), including average turn time and budget usage. Using SuiteSpot, owners of geographically dispersed portfolios can compare performance across their properties and gain insights into future spend. The platform also reduces risk for property owners by tracking progress on preventative maintenance and compliance as well as incident reporting.

Critically, SuiteSpot integrates with RET portfolio company, Funnel, and other leading real estate tech tools, creating an optimal experience by fitting seamlessly within the existing workflow stack.

SuiteSpot’s Core Value

SuiteSpot’s solution is powerful, and it has already experienced significant traction in the market. The platform is currently tracking to be deployed across 500,000 rental units, and users have reported significant improvements to maintenance processes with clear in-year ROI, including up to 50% reduction in apartment turn times and 40% faster work order completion times.

As multifamily owners continue to prioritize technology that improves and centralizes key operations like maintenance, SuiteSpot will remain an indispensable solution for stakeholders looking to boost their NOI. For many of its users, SuiteSpot is fast becoming an indispensable technology tool, and it’s an exciting new addition to the RET portfolio.

The multifamily industry has undergone a significant shift toward centralization as slowed rent growth and general market uncertainty have many owners prioritizing optimizing internal operations to cut costs and create greater efficiencies.

During RET Ventures’ second annual “Multifamily Kickoff Summit” at the Blueprint event in Las Vegas last month, RET Partner Christopher Yip moderated a panel entitled “Centralized Property Operations: Creating Efficiencies Across Leasing, Maintenance, and Broader Property Operations,” featuring panelists Josh Glastein, CTO of Berkshire Residential; Elik Jaeger, CEO & Founder of SuiteSpot; Andy Larson, CRO of Tour24; and Fred Schreiber, EVP & COO of AMLI Residential.

In the discussion, panelists explored the driving forces behind centralization, including economic challenges, labor costs and shortages, and a desire to enhance the resident experience. Panelists also dove into the specific ways centralization is solving challenges throughout leasing and maintenance, enabling owners to create more consistency in their operations and utilize their resources in smarter ways.

In concluding the session, the experts shared thoughts on which currently underserved areas of multifamily management would benefit the most from centralization, leaving the audience with a holistic understanding of the current innovations within the sector and where the asset class is headed in the years to come.

Watch the full session below:

RET Ventures recently welcomed its extensive network of multifamily, SFR and real estate tech professionals to Park City for the sixth annual RET Summit.

With 100+ strategic investors and 20+ portfolio companies in attendance, the event brought together leading industry executives for three days of networking, strategy conversations, and portfolio company presentations. Discussions at this year’s event included the growth of centralization within real estate and the tech initiatives that leading real estate operators are finding drive the greatest improvements in NOI.

After seven successful years as an industry-backed leader in the real estate tech space, we continue to see the success of our collaborative business model. The annual summit — which brings so many stakeholders together in one room — is a critical part of this collaboration. Thank you to everyone who attended the event, making the summit a resounding success and helping us all bring continued innovation in the real estate sector!

While the COVID-19 pandemic gave the commercial real estate industry some challenges, it also served as a catalyst for innovation, forcing property developers, owners, and operators alike to reevaluate decades-old real estate models. Initially, the real estate industry was slow to adopt technology. But the prevalence of working from home changed resident activity, as well as the way in which property management and residents interact. Because of that, real estate technology has become essential in meeting renter needs.

This was one of the topics of discussion at RETCON — a proptech-focused event in New York City — this spring. During a Fireside Chat led by RET Ventures Partner John Helm, LCOR Chief Operating Officer Mike Hogentogler talked about his career journey in multifamily operations and management and how LCOR approaches the selection and implementation of proptech solutions across its 12,000-unit multifamily portfolio.

LCOR was ahead of the curve at proptech adoption. While many real estate companies are just now learning how to integrate technology into their properties, testing the water with a few technologies, Mike talked about the twelve distinct tech solutions LCOR has rolled out across various properties in the past four years. Embracing the shift away from single-stack solutions, LCOR has focused on adopting technologies that play a role in accelerating and easing the renter’s overall experience, as well as those of property management teams. While this shift is universal, Mike noted that it has even greater benefits for small-to-midsize property owners and operators who cannot support dedicated workstreams for all operational activities; integration of technology has been crucial in streamlining operations and ensuring renter satisfaction.

The market is seeing an abundance of proptech solutions being developed, and two of the criteria LCOR uses when deciding which technologies to deploy may not be intuitive: one, the tech company’s leadership, and, two, its financial stability. By considering both of these factors, LCOR has been successful at implementing tech solutions that will deliver tangible benefits for their operations team for years to come.

Mike also talked about the importance of purposeful implementation, including focusing on technologies that integrate with other proptech solutions and being intentional about which properties pilot these technologies. Also critical when rolling out any technology is effective change management to ensure that companies are driving the best possible results that maximize the technology’s impact.

As innovation continues,​​ integrating effective technologies will be crucial not only for operational efficiency but also for meeting the ever-changing expectations of residents. As John noted, RET Ventures has played a major role in moving multifamily technology forward, helping to ensure that future technologies are well-capitalized and perform in a way that is most impactful for the industry. Through its partnership with a large cohort of multifamily operators, RET helps LCOR and others make technology investments that align with their strategic goals and enhance resident experience.

As Mike noted toward the end of the session, the power of technology in multifamily real estate is transformative. By embracing innovation, collaborating with forward-thinking partners, and prioritizing tenant experience, LCOR has set a precedent for implementing innovations that drive operational excellence and future-proof the industry.

Centralization is transforming real estate, and for good reason – owners and operators find that centralization improves the quality of property operations, lowers costs, and boosts productivity.

What is Centralization

Traditionally, most property operations occurred onsite. As tech has matured, a growing amount of activity can be centralized in an off-site location.

• For front-end operations, centralization streamlines and manages prospect screening and communication, property marketing and ongoing resident engagement.
• On the back end, owners gather, store, and analyze portfolio-wide data behind one pane of glass – producing more accurate reporting, driving better decision-making, and simplifying compliance.

What’s Behind Centralization

Economic challenges and a labor shortage have real estate owners looking internally for value creation. Centralization can play a crucial role.

• Centralized systems are inherently scalable, enabling owners to onboard new acquisitions more easily.
• Moving screening, collections, and renewals offsite to specialized teams allows onsite staff to focus on resident experience and retention.
• Centralized roles allow operators to provide a uniform, repeatable approach to things like screening.
• Consolidating resident communication channels enables more prompt responses to inquiries and more effective conflict resolution.
• Centralized platforms offer robust reporting and data analytics, providing actionable insights on resident sentiment and asset performance across a portfolio.
• Streamlining administrative work allows owners to optimize onsite resources and/or reduce overhead costs.
• Centralized management promotes a more consistent resident experience. It creates true relationships with renters, prompting them — when they move — to favor apartments within the operator’s portfolio.
• Centralization creates clearer career progression pathways and more stable work environments for onsite staff, enhancing employee retention.

Many RET portfolio companies are at the forefront of the centralization trend, streamlining operations for multifamily and SFR properties.

Optimizing resident and prospect processes

Funnel is a front office platform using AI to centralize multifamily marketing and leasing.

• Why Residents Care? It utilizes a unique “Renter-centric” model to automate tasks, engage residents, and simplify applications - providing a cohesive renter experience.

• Why Users Care? Reducing remedial tasks and providing leverage for enhancing career prospects.

• Why Owners Care? It’s a no brainer… increasing efficiency and reducing costs.

Centralizing apartment operations and resident communications

Travtus delivers a true AI solution to transform conversational data into actionable insights.

• Why Residents Care? It improves customer interactions and accelerates issue resolution times, ensuring the best customer experience.

• Why Users Care? Consolidates customer and employee conversations into one platform, enhancing operational efficiency with smart automation and digital teammates.

• Why Owners Care? Supports centralization efforts with tools for remote management, providing essential insights and custom action plans for better decision-making.

Automating time-consuming accounting tasks

PredictAP automates the ingestion and coding of invoices specifically for real estate-related accounts payable (AP).

• Why Residents Care? It ensures that property managers can focus on providing better service instead of being bogged down by manual data entry.
• Why Users Care? Replaces manual data entry, allowing AP, accounting, and property managers to focus on high-value-add work without changing existing workflows.
• Why Owners Care? Provides the ability to scale without relying on costly labor while improving processing time by 50-80%, increasing payment visibility, and simplifying compliance.

Creating a more accurate and equitable tenant screening process

RentButter uses predictive analytics to reform the resident screening process.

• Why Residents Care? Ensures a fair and holistic assessment of their financial capability, making the process more equitable.
• Why Users Care? Relieves onsite teams from making screening decisions across multiple platforms, allowing them to focus on other critical tasks.
• Why Owners Care? Provides in-depth financial and credit reports, helping to avoid rent defaults and reduce turnover with more accurate assessments of residents’ ability to pay rent.