Sell for More News is a weekly blog series with interesting information from the world of commercial real estate.
Multifamily property sales have been hot for a number of years. New concepts are emerging. And amenities keep getting better and better. So what changes might we see in 2020?
It Becomes Harder to Make Money in Multifamily
The easy money in multifamily has already been made this cycle. Operators aren’t going to luck into good deals and they’re not going to be bailed out by compressing cap rates or unexpectedly high organic rent growth. Success in multifamily investing in 2020 will require flawless execution.
Technology Increases in Importance
Concierge services and resident events have become a critical differentiator as the expectations of renters have changed. HelloAlfred, Mobile Doorman, and Buttefly MX are all players in the space.
In the age of Amazon, package handling is now very important. The technology has quickly shifted from package lockers to automated package rooms like HelloPackage.
Residents want automated, online rent payment options. Services like Flex are disrupting the rental payment space.
Virtual tours will become even more common. The technology is available and it’s not that expensive. Savvy apartment owners will give prospective tenants what they want.
Multi-function Furniture Systems
More apartments will be offered furnished and the furnishing will serve dual purposes. Multi-functional furniture systems like Ori Living, Bento Build, Ikea, Resource Furniture and others are all involved in this space.
And with apartments getting smaller,, many furniture pieces will have dual roles. Residents want the ability to host friends, work, and sleep all within one space…which requires movable and multi-functional furniture systems.
Movable walls like the NanaWall allow spaces to be easily segmented or opened up.
Suburbs become cooler
Watch for millennials to move to walkable suburban locations.
Affordability Becomes a Bigger Issue
Rents have risen for 11 of the past 13 years (46% cumulatively), outpacing income growth, and creating an affordability gap. A growing supply pipeline will help slow rent growth, but the new supply is focused mainly within the Class A space.
In summary…new technology, increased competition, and shifting resident demands will continue to push the industry forward in the new year.
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About Beau Beach, MBA CCIM
Beau is a tenacious Commercial Real Estate Broker, author and adoring father of four. His clients appreciate his no-nonsense demeanor and his legendary work ethic.
Beau leads Beachwood which is a commercial real estate broker for sellers in the Nashville, Milwaukee and South Florida markets.
He’s the author of the books The 3 Reasons: Why Most Commercial Properties Don’t Sell and True Wealth: What Every Seller Should Know About 1031 Exchanges.
Beau can be reached at 800-721-3287, click to schedule a call or Beau@BeachwoodSells.com