Apartment Execs Change Operations, Forecasts for 2023

Cautious optimism and “no new normal” were among the themes presented by leading apartment executives during a panel “The Mind of a CEO” at the National Multifamily Housing Council’s Apartment Strategies Conference in Las Vegas recently.

The group also discussed how their operations and forecasts are changing, coming off the extraordinarily strong performance in 2022.

“Just as rent growth came up, it came down, to more historic norms,” Bell Partners’ CEO Lili Dunn said. “We see 5% blended rent growth this year.”

Dunn said last year’s NOI was up 14% and expects it will moderate back to historic norms in 2023.

“We’re in a defensive position with more focus on occupancy, driven by renewals,” she said.

BH Companies’ president & CEO Joanna Zabriskie said her company will focus on keeping its renewal conversion rates high in 2023.

She called this “the year of expense control, citing rising costs in many areas, including by double-digits in property taxes and insurance, and rising interest rates.

She said “West Coast climate change in the form of hail, fires, and flooding from atmospheric rivers have insurance carriers earning less and thus, rising their rates.

With expenses, Zabriskie said, “We need to control what we can control because the non-controllables are out of control; we can’t depend on the same rate of rent increases as we did before, but demand is strong.”

She said technology will help.

“We have to operate differently, more efficiently, and use the technology that during the pandemic promised us we’d be more efficient, such as virtual touring, mobile maintenance software, centralized payment plans, and going paperless to save on costs.

BH Companies has made a bigger move to centralizing administrative workflows.

“This takes some tasks off of our onsite teams and helps us do better with onsite customer service,” she said. “It also gives the leasing team a career path to work at the corporate office, if they choose. [Overall], this efficiency is helping us to break even on the rising expenses we’re seeing.”

Maria Banks, president & CEO, AMLI Management Company, said her company’s goal is to provide “technology when you want it, people when you don’t.”

She said her staff needs to understand that “the technology is creating more opportunities for them; it’s not replacing them.”

Banks said that AMLI asks, ‘What tasks can we take off our onsite teams? What are we doing that is redundant? What can we do to ease their burden?

“[Our customers] are used to doing business online, using kiosks, and apps. You have to provide a way for them to reach out to you to do business the way they want to do it with you.”

The same can be said for staff members. The focus on the workforce is crucial at a time when hiring and retaining workers in property management is not always easy.

Dunn said, “You have to invest in your people and culture” and to “invest in technology now because what got you where you are today won’t necessarily get you to where you are going tomorrow.”

For Banks, strong, transparent company culture is what can help to fortify employee trust.

“Everyone needs to understand the why,” she said of implementing new technology or processes. “You need to ask for employee feedback and act upon the feedback.”

Banks said her company understands that there’s a corporate culture, and an onsite culture, and that each community has a leader who creates their own culture.

She told of a senior leader in the past year there who was considering a significantly higher offer elsewhere: The person trusted enough current senior leaders at AMLI to speak about the situation/dilemma this candidate faced. After considering the trust and support and potential career path AMLI demonstrated, the person decided to stay at AMLI and pursue the opportunity for progression.

Dunn agreed, “Culture is not something you can tell people, it’s something you feel. It’s the glue. Let your people provide feedback. Let them know you heard and then tell them what you’re going to do about it.”

Stephanie Williams, president, Bozzuto Management Company, said that one recent hire chose to work there because, as a candidate, “she could see our culture on our social media. She went to our website and saw that diversity was weaved into our culture and she felt a notion of belonging.”