A little over a week ago, 10,000+ apartment industry colleagues descended upon our hometown of Denver, Colorado for NAA’s annual Apartmentalize conference. Along with entertaining keynote speakers and many different dinners and parties, there was an excellent program of education, networking and one-on-one meetings. Here are a few highlights from what we saw and heard:
1. Despite political uncertainty (and even a few economic concerns), the industry is still very much a confident group of people. With annual rent growth still above the long-term trend, we continue to enjoy the longest bull run in the modern rental housing industry’s history. Perhaps the best implication of this is that the run is now so long, we no longer hear baseball references around “what inning” we are in 😊
2. We noticed something a bit different about the tone and tenor of our conversations with senior operators, and through discussions with other vendors confirmed they felt it as well. Senior operators have always been open to discussing new products, new processes and new technologies; but, candidly, the tendency to talk has traditionally been much stronger than the tendency to act. This year felt different. Simply put, executives seem to be more action-oriented. This may not be so surprising given that our March 2019 white paper, “20 for 20: 20 Conversations with Senior Multifamily Executives about the Outlook for 2020 and Beyond,” uncovered the realization that we are at a tipping point in technology unlike any we’ve seen since the early ‘00s. The proof will come out in the next 6-12 months, but it feels as if operators are trying things they’ve been previously reluctant to try and ready to act in ways they’ve been slower to move in the past.
3. Apropos of that, I led a panel kicking off the conference on “the long-term view for short-term rentals.” We had a vibrant discussion on the benefits and challenges of STRs. One of the things we’ve noticed at D2 Demand is that the sheer volume of different business models in the STR space can overwhelm operators and slow the decision process. The conversation often centers around issues of logistics and liability that operators can mostly offload to vendor partners. Additionally, some STR-models have little to do with a “3-night AirBnB” but get lumped in with the rest. To help clarify the playing field, we created a simple summary, which we presented at the panel.
4. In another session, D2 Demand’s very own Trachelle Spencer moderated a discussion about how Pricing, Marketing and Operations can better work together to manage demand and maximize NOI. Using the analogy of a football team, the panelists cast operations as the offense, Sales as the quarterback, Revenue Management as the defense and Marketing as special teams. While the concept is simple, the reality is devilishly difficult to execute, and we were proud to have Trachelle share some of what we do with clients in this space.
5. Smarthome tech was certainly very present at the trade show with many vendors proudly displaying samples of the hardware they deploy and demonstrating their software and reporting as well. Operators are beginning to see returns on pilot programs at same-store properties which should drive faster adoption (though the upfront capital costs and installation logistics still retard the adoption rate compared to software).
6. While present, we didn’t hear nearly as much about AI as we did about smart home and STRs. Perhaps this is because there are still only a few vendors with real offerings, or maybe it’s because the audience at NAA is not as much in the sweet spot for AI as the NMHC audience. We’ll update this when we send a review of NMHC OPTECH in November.
7. Also consistent with our “20 for 20” findings, we met with a number of executives implementing or planning to implement sales performance improvement programs for leasing consultants. This is partly a hedge against any fears of a rental slowdown, acknowledging that a decade of market growth has perhaps atrophied many sales muscles. More importantly, it is also an investment in the development of associates as part of a executives’ efforts to encourage associate retention in an ever-increasingly difficult recruiting environment.
8. Also consistent with 20 for 20, executives continue to express at best tepid satisfaction with their business intelligence efforts. We continue to see the C-suite struggle with moving from reports to robust online analytics and true dashboarding. If you share this struggle, we’d love to show you how it can be done!
9. Lastly, we continue to hear concerns from executives about the health of the technology ecosystem in our industry. On the one hand, there are encouraging signs like the growth of tech Private Equity companies like RETV and Fifth Wall; on the other hand, we heard repeated concerns that all the startups that mature seem to sell to the same handful of large tech companies. Execs are quick to point out they’re not criticizing the large tech firms; however, they express concerns about a lack of choice and competition.
Apartmentalize was a 3-day whirlwind. A great chance to catch up with colleagues, challenge ourselves and even have a bit of fun. As we continue to recover from late nights and maybe a few more drinks than usual, we continue to be grateful and feel blessed to be able to work in such a great industry.
See you next year in Boston!