As we near the fourth quarter of 2017, apartment owners are focusing their attention on ways to get ahead of the competition for the upcoming year. Here are some of the industry trends we can expect to dominate the multifamily market in 2018.
Adding value where it counts
Adding value is a trend that will never go out of style for apartment owners. For Class B owners/operators in particular, entering high barrier to entry markets where value can be added for both residents and investors will continue to take precedence. We’re bullish on Baltimore and the greater DC metro market, which encompasses historically untapped areas such as Alexandria, Virginia. Other East Coast markets including Philadelphia and North and South Jersey will remain hotspots for multifamily development as well, outside of the New York market.
As apartment owners look for the best return on investment when growing in these markets and making major purchase decisions, enhancing interiors in simple but efficient ways and adding amenities will trend. This allows owners to raise rents without excluding current and prospective residents who are looking for something affordable, not luxury. For interiors, this means a shift towards upgraded bathroom, kitchen, and common areas. On the amenity side, owners will prioritize in-unit full-size washers and dryers, on-site parking, and making accommodations for pets.
Renter convenience will also take more of a priority, as proximity to central locations and access to public transportation becomes increasingly more important for today’s renter. In fact, multifamily owners/operators will find ways to incorporate mixed-uses, such as shopping and dining, into their apartment communities so that renters can get the all-in-one experience. Morgan Properties’ recent acquisition included a retail component, which will surely attract renters and in turn, help boost traffic for the retailers.
More isn’t always better
While interest rates are at an all-time low and expected to stay low in 2018, creating an opportune time in multifamily development, more isn’t always better when it comes to managing individual apartment portfolios. In 2018, apartment owners will evaluate quality, in addition to quantity, to gain more control over their assets. Take for example our recently acquired Mark Center portfolio, which consisted of six separate apartment communities. For us to maximize operational efficiencies, we decided to consolidate the properties into four larger apartment communities. This is a trend we can expect others to follow next year as owners/operators look for ways to cut costs and best allocate resources.
A focus on digital
Roughly 77 percent of Americans own a smartphone and nearly 69 percent use social media platforms. Heading into 2018, apartment owners will get savvier in their web presence, digital access for residents, social media, and marketing efforts. Apartment communities are already experimenting with tools such as Snapchat geofilters and Twitter hashtags to help promote themselves. At Morgan Properties, we’re undergoing a rebranding to make our digital presence more modern and streamlined, and will incorporate visual elements like videos to help elevate our “Experience More with Morgan” tagline.
With a busy 2017 for Morgan Properties and other owners/operators across the Mid-Atlantic coming to a close, undoubtedly another active year lies ahead for multifamily. With these trends in mind, are you prepared to kick off 2018?
Sean Organ is the area vice president at Morgan Properties, the 25th largest apartment owner in the U.S. with 139 apartment communities and over 40,000 units located in 10 states, primarily in the Mid-Atlantic and Northeast Region.