Multifamily Property Management Takeaways from 2020
And What to Look for in a Property Manager During and After the Pandemic
As with nearly all aspects of life during the pandemic, property management changed in 2020 and continues to evolve in 2021. “You're not so much managing real estate anymore, you're managing the pandemic, and some of the skill sets are different," explained Daniel Wollman, CEO of Gumley Haft, a New York City-based property management firm.
Financial skills have become crucial, he said, as have people skills, tact and communication — both written and verbal, according to property management experts.
Responsibilities brought on by the pandemic accent the already-important value property managers bring to the table, said Joe Muratore, co-CEO of Graceada Partners in Sacramento, California. “The on-site manager is more crucial than ever, and it's their job to communicate well with tenants and show kindness and compassion." Personality is everything, he added. "It holds a community together, helps with rent collection and helps in maintaining a high level of occupancy."
"You need the ability to prioritize things," Wollman added. "We're in a business where each person is managing five to six multifamily buildings, and there are priorities for each building. Those priorities can change by the minute, so you have to be able to pivot."
Successful property managers also need to stay on top of the latest real estate trends, including keeping up with residents' changing needs.
Financial Savvy Helps Management Companies Prosper
In the Central Valley California area of Modesto, Sacramento, and Fresno, where Graceada Partners operates, vacancy rates sit at 2.6%. Only 3% to 7% of Graceada tenants had issues paying rent throughout 2021, Muratore reported.
His property management team worked with those tenants to make payment arrangements that would help them be in a better financial position when the eviction moratorium eventually lifts.
He said his management firm works with a third-party company to be sure they are in compliance with eviction moratorium rules and to navigate late payments and concessions for both tenants and landlords.
Wollman agreed that a good sense of finance is more important than ever for property managers. Gumley Haft's buildings combine residential and commercial units, which has required carefully balancing budgets to address some of its business tenants that were not in full operation throughout the pandemic.
He listed some of the considerations property managers must take into account and questions to ask to keep positive cash flow: “In buildings where we have commercial tenants who are not in business or severely limited due to executive orders, are we willing to make economic concessions? How are those concessions going to impact our budget? What is the building going to do to supplement those concessions? Can the building find ways to save money as a trade-off to some of the loss of rent income?"
These answers may vary depending on the specific tenants and location of the real estate. Those in areas like New York City may have to cut corners to stay profitable if some tenants are not paying rent. However, Muratore noted that only 3% — 7% of his Central Valley, California tenants have voiced any difficulties paying rent.
Delivering Amenities People Want with Social Distancing
Even while looking for ways to conserve budget resources, property managers must find ways to deliver the amenities tenants want in a changing world.
“We've put more focus on outside amenities," said Muratore, noting that Graceada Partners added barbecue areas to one property, as well as exercise equipment overlooking the lake outside. “We found we can get more bang for our buck with outside amenities, so it made sense financially. It also lets us stand out," he said.
Diana Pittro, executive vice president for RMK Management Corp. in Chicago, said that her properties added virtual events during the heart of the lockdown to help residents maintain a sense of community. One property hosted a virtual "Roaring '20s Valentine's Day Massacre Murder Mystery Party." These type of virtual events can range in cost from free to thousands of dollars, depending on the number of participants. Landlords may provide it as a perk for residents, or charge a nominal fee to offset costs.
As people began venturing outside in the summer, Pittro said RMK brought in food trucks to create a safe, socially-distanced outdoor event, something that costs the property management firm nothing. Food truck services like Roaming Hunger charged residents for the food they ordered, much as they would during a public event like a street fair.
Audrey Epstein Reny, managing partner for The Abbey Group in Boston, said her firm also focused on ways to increase the sense of community within their properties throughout the pandemic. The firm shared weekly communications that included helpful information, such as walking and running routes through the city, neighborhood restaurants offering takeout, and details about lesser-known parks in the area where people could gather safely with family and friends.
“It was a cadence of communications and activities that supported the city and neighborhoods that are important to us while providing resources for our residents," Reny explained.
Keeping Residents Safe During the Pandemic
Health, safety and social distancing remains on everyone's minds, of course. At the onset of the pandemic, Pittro's firm re-evaluated the maintenance services they offered and took a close look at overall building operations to keep people safe and meet their comfort levels for human contact with people outside their immediate families.
“We offered 'home care packages' for residents who wanted to take on light maintenance tasks themselves in order to have less foot traffic in their unit," she said. "We provided them with HVAC filters, water filters, touch-up paint, carpet shampoo, light bulbs and instructions. Our maintenance teams were also nimble in adjusting their schedules to accommodate residents [being home nearly 24/7]."
Prop-Tech Plays a Role
Even as property managers focus on soft skills to manage people and the pandemic, property management technology, including apps and management systems, can help keep everything running smoothly. “We're moving our properties to revenue management systems to make sure we accurately reflect the market every single day," said Muratore.
It's important to find property managers who understand today's technology — which ranges from building management systems to customer relationship management apps — and who can deploy it seamlessly, he said.
If anything, however, the pandemic has emphasized that good property management is more about people skills, since technology systems can be learned, while those traits that make residents feel welcome are an inherent part of a property manager's personality.
“Technology plays a role in every business, but people still want to call up and talk to a person," Wollman said.
Will Cities Rebound Post-Pandemic?
As property managers juggle new constraints and concerns presented by the pandemic, they are keeping a close eye on the market and waiting for a rebound, especially in major cities. “We're seeing an uptick in activity and inquiries and are starting to have an increase in leases," Reny said.
Wollman said he sees New York also rebounding as more restaurants, stores, museums, and businesses begin to reopen, albeit to decreased capacity. “People will start to come back," he said. “After 9/11, people thought no one would ever live downtown again."
While dense downtowns in cities like Boston, New York and Chicago may take time to rebound, secondary markets will continue to thrive. Graceada's Outpost Economy report spotlights cities like Austin, Texas; Sacramento, California; and Charlotte, North Carolina; as opportunities to watch. “COVID-19 caused the work-from-home shift, but quality-of-life is causing the outpost economy relocation," Muratore observed.
As property managers navigate the next 12 months and beyond, the skills, tactics, and strategies adopted during the pandemic should help attract tenants to their properties. As the constraints of the pandemic begin to lift and life returns to a new normal in cities and suburbs across the U.S., the lessons learned throughout 2020 will prevail.