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The current pandemic and global response is a once-in-a-lifetime event that has affected all of our lives in significant ways. In addition to rapidly addressing the short-term implications, real estate leaders must begin to think strategically about the long-term implications of the event. As MIT Technology Review’s Gideon Lichfield wrote, “We’re not going back to normal.”
From my vantage point working with multifamily owners to anticipate changing resident demands, the following are five developments that I predict will accelerate in the future, post-pandemic age. Beneath each trend lies an opportunity for owners and operators to capture in the coming years.
1. Increased Adoption Of Delivery Services
Prediction: The percentage of residents who shop online for necessities will increase, with online grocers seeing the largest percentage of new adopters. Online grocery apps are being downloaded at record-breaking rates. This trend will continue and be a lasting change in the new normal.
Opportunity: Multifamily owners who adjust their operations to best receive and distribute a variety of packages (including perishables and high value) to residents will be at an advantage. The e-commerce boom and resulting increase of packages has been an existing logistical issue for multifamily owners. While smart package mailrooms are part of the solution, it will be increasingly valuable to create additional layers of service to ensure safety and cleanliness, particularly for perishable items.
2. Remote Working Acceleration
Prediction: Remote working will become more widely accepted and employers will increasingly need agile real estate strategies that maximize value and flexibility. Many of us have had too many Zoom calls to remember in the past few weeks. This personal experience is indicative of widespread adoption. In the midst of a chaotic time, tools for remote work have proven reliable for many. This short-term success of remote working coupled with companies’ need for flexible real estate strategies will accelerate the acceptance of remote work.
Opportunity: Residents who are working remotely for a portion of their workweek will desire a third space outside of the home, so multifamily owners who operate a workspace in their buildings will create a competitive advantage. A workspace offering will add the most value when it goes beyond providing a basic space and chooses to align itself directly with end-user needs, such as bookable meeting rooms, programming and events.
3. Automated Public Spaces
Prediction: A general shift in social norms and social behaviors will increase the use of automation in public spaces. Implementation of all types of touchless technology will increase, from automatic doors to voice-activated elevators to hands-free light switches.
Opportunity: Owners who are adept and first to market at retrofitting and adding these smart elements to their buildings will have an advantage. How operators strike the right balance of frictionless automation with human-centered hospitality will be key.
4. Increased Importance Of Property Management
Prediction: As residents spend more time at home, they will expect more from property management, and the importance of service, cleanliness and reliability will increase. Over time, brand recognition of property management companies will increase and more substantially differentiate one multifamily asset from its competitive set.
Opportunity: Multifamily owners who build a strong consumer-facing brand based on operational consistency will have an advantage. Owners who add additional layers of service, whether provided through an affiliated third party or in-house, will achieve further differentiation, especially in class A multifamily.
5. Human Connection Becomes Increasingly Valuable
Prediction: The core mission of my company is to draw people out of isolation, which makes this trend particularly important to me. As society moves from wide-spread quarantine to the new social norms, the already existing loneliness epidemic will, unfortunately, continue to grow. In 2018, three in five adults (61%) reported feeling loneliness in the well-documented Cigna study. Tragically, we expect this percentage to rise, which may have serious health implications.
Opportunity: Multifamily owners who create operational rhythms for resident connection before, during and after work will attract and retain a disproportionately large number of residents. This operation likely functions similar to a hotel bar, drawing residents out of units and into a space with opportunities for connection. The current lobby and first-floor amenity space is the ideal location of this connection hub. As technology continues to remove friction and human interaction from the consumer experience, people will be more hungry than ever for human interaction. Buildings and operations that can provide places of connection will be in high demand.
In the age after the pandemic, customer-centric sensibility will be critical to best position existing assets in what will be a more competitive landscape. Winston Churchill famously said, “We shape our buildings, and afterwards our buildings shape us.” The coronavirus will more than likely shape us in such a way that our buildings and operations will need to be reshaped. Multifamily owners and operators who are best positioned to address the change in behavior will not only be good for society, but will perform the best in the new normal.