Multifamily Companies Explore Centralization

First, technology rescued multifamily companies during the pandemic, when many leasing offices locked their doors.

Without risking infection, potential residents could text with chatbots powered by artificial intelligence (AI). They could apply for a lease online. They could even schedule an appointment on an apartment website, provide proof of their identity, and then open the electronic locks on the front door to take a self-guided tour.

In the recovery from the pandemic, these same technologies helped humans in the leasing office stay connected with more residents and prospects, even though their teams were often understaffed and new workers were hard to find.

Many basic tasks are now being automated. Apartment companies say these solutions give leasing agents and property managers more time to focus on the conversations with their customers that cannot be automated.

Today, many apartment companies are rearranging who does what job at their communities and where that work gets done, using the same systems they installed several years ago to make it through the pandemic.

For example, at Fogelman Properties, the final human approval of a lease application might be done by a “centralized” employee working remotely from a desk in their home.

At Gables Residential, negotiations with residents who ask managers to forgive late fees or other residents who are late in their payments are handled by apartment experts from an outside company working in a call center in Virginia.

At Investors Management Group (IMG), a team of less than a half-dozen investor relations experts gather the data to write monthly reports for a $1 billion portfolio of over 20 properties using centralized asset management systems. The same team has become an innovation hub for the whole company, managing the integrations between the dozens of apps that make these centralized systems work.

Global Integrity Realty Corp. is using a centralized system to help guide what properties it buys and where they are located. First, Global typically buys a larger property in a new market. Then it buys a number of smaller apartment buildings nearby that can be served by a central leasing office and a maintenance team based at the larger property.

Most of these companies are centralizing jobs that workers once did at individual apartment communities. Now those jobs can be done by apartment experts who work with multiple properties.

These apartment companies have often been using the technologies that make centralization work for years. Centralized customer relationship management (CRM) platforms, for example, are usually the same systems that manage the information gathered by AI chatbots.

“We haven’t had to change the technology,” says Melissa Smith, chief administrative officer for Fogelman. “It was already there.”

Fogelman Creates Specialized Accounting Role

Memphis, Tennessee–based Fogelman has created a new specialized accounting role for its properties. Each of these experts will work with four or five properties, doing jobs like monthly accounting and working with residents who are behind in their rent.

“They’re doing the very important but more mundane administrative work of approving lease applications, focusing on delinquencies, and all the reporting that generally folks who love sales just hate to do,” says Smith.

In the past, every apartment community managed by Fogelman had an “assistant manager” who handled these jobs, in addition to leasing apartments and acting as a second-in-command to the leasing manager at the property.

Those assistant managers are not going to lose their jobs.

“We’re not eliminating their positions,” says Smith. Instead, they can remove tasks like financial reporting from their list of things to do. “It really does push them back into the sales and marketing space.”

If they prefer to become one of Fogelman’s centralized accounting workers, they can leave the leasing office to work remotely from their own homes or in one of the company’s offices.

“It’s really creating this new career path for folks that love to be in that administrative space,” says Smith.

So far, Fogelman has introduced this new way of working at about 10% of the roughly 30,000 apartments managed by the firm. It started with about 1,000 new apartments that were leasing and has scaled from there.

At these new properties, the centralized workers spend about 75% of their time approving applications to sign leases, says Smith. Once a new property has finished its lease-up, the centralized workers will probably devote 25% of their time on applications and 75% on jobs like renewals and collection letters.

So far, the feedback from employees and residents has been good. “We’re expanding the pilot,” Smith adds.

Assistant Managers at Gables Escape Purgatory

In April 2023, Gables Residential partnered with another multifamily company to handle administrative functions, including certain difficult conversations around collecting unpaid rent from residents and responding to residents who ask the company to forgive late fees.

In the past, these conversations were handled by assistant managers at the individual properties operated by Gables.

“We wanted to clear the desk for our site teams so they could focus on sales and service,” says Melanie Trapnell, senior vice president of operations for Gables.

The job of assistant manager has traditionally been the first promotion for leasing agents who want to build a career in the multifamily business.

For ambitious employees who enjoy sales, the promotion has sometimes felt like “a detour into bookkeeping purgatory,” says Trapnell, who once held the job title herself earlier in her career.

“You end up in the back of the house doing delinquency management and fighting with people because they’re mad about their late fee,” she says.

Gables has phased out the job title of assistant manager. The change is part of a broad reorganization of how Gables operates its apartment communities.

In the past, the vast majority of Gables properties had both an assistant manager and a community manager—also known as a property manager—on-site.

Gables is gradually increasing the responsibilities of its general managers, previously called community managers. Eventually, most will be responsible for two or three properties each, totaling 400 to 600 apartments.

That will leave space in the organization chart for someone at each property to lead the sales teams when the community manager is busy with financial reporting or away at one of the other properties they manage.

“We want to create a meaningful right hand for that general manager,” says Trapnell. “We now call the job a ‘sales manager’ rather than an ‘assistant manager.’”

Centralizing technologies, like CRM systems, make these changes possible, says Trapnell.

For example, the company that Gables hired to handle unpaid rent and other issues is the AvalonBay Customer Care Center in Virginia Beach, Virginia.

At AvalonBay’s call center, a set of apartment experts who specialize in Gables properties can access the Gables CRM system, including all the account information relevant to the conversations and negotiations they have with residents. The experts at the customer care center can also update the CRM as they take action on resident accounts or as residents pay their balances.

So far, the results have been good, according to surveys of Gables’ customers and surveillance of its reviews on social media. Residents may appreciate that the customer care call center is open later than the offices at most properties, says Trapnell.

IMG’s Marketing Team Provides Tech Support

The investor relations team at IMG has become technology experts for the company. These experts in marketing and communications now help manage the integration between the different property management systems, CRM systems, and other technology solutions.

“Oddly enough the marketing people are the key players,” says Julie Flesner, communications director for IMG, a multifamily company based in Los Angeles. “My role as communications director is being the go-between—almost like the relationship counselor—between our big tech partners and our human staff.”

That’s not unusual. At many multifamily firms, marketing departments manage the array of tech solutions that affect leasing and customer experience, according to the 2023 Customer Experience Technology Report from the National Multifamily Housing Council and multifamily consultant RealFoundations. The report surveyed 40 companies with over 2.2 million units under management.

For example, at 61% of the companies surveyed for the report, the CRM system is managed by the marketing department, not property operations or even the technology department. At 77% of companies surveyed, the automated leasing assistant—the chatbot—is also managed by marketing.

At IMG, the marketing and investor relations experts like Flesner had to gradually become technologists to produce reporting for IMG’s investors. IMG owns more than 20 apartment properties and has more than 1,000 separate equity investors, including many accredited investors who have contributed small amounts through crowdfunding platforms.

To keep these investors happy, maintain their reputation, and attract new equity investors, IMG provides monthly reports on the financial results and the status of renovations at its apartment properties through its investor portal.

Flesner’s team of less than half a dozen investor relations experts use centralized accounting systems to gather the data to write monthly reports for the properties.

As the investor relations team produced more than 1,000 separate reports, month after month, they were forced to pay more attention than anyone else in the company to how information flowed from individual technology solutions into a property’s CRM and property management systems, and from there into an accounting system and into IMG’s investor portal.

Global Invests in Centralization

Global Integrity Realty Corp., based in Los Angeles, decides which apartment properties to buy based partly on its centralized approach to maintenance and property management.

“We look for places where we have properties that can share resources,” says Scott Kurzban, chief operating officer for Global.

For example, in 2018, Global bought a 400-unit property in Ventura, California. The large community has its own leasing office and a maintenance team based at the property.

In 2022 and 2023, Global bought three more apartment properties in Ventura, just a few minutes away from the first acquisition. With less than 50 units apiece, these smaller properties rely on the leasing office and the maintenance team the larger property nearby offers.

Global’s strategy is a “hub and satellite kind of approach,” says Kurzban. “It helped make us more competitive in the acquisition process.”

Global uses a centralized system to receive and process work orders at its properties. The maintenance team at its large Ventura property can use this centralized system to efficiently complete all the work that needs to be done both on-site as well as at the smaller properties nearby.

Centralized systems for work orders are especially useful when maintenance teams prepare vacant apartments to be leased again.

“Make-ready turns are always a pain point,” says Kurzban.

Global uses its centralized worker order system to coordinate all the work that must be done, including any specialized contractors that need to be hired or supplies that need to be ordered.

Thanks to these centralized systems, Global’s maintenance teams can cover about 80 apartments per maintenance worker compared with roughly 60 apartments per worker at conventionally managed properties, says Kurzban.

The efficiency improves the net operating income from Global’s centralized properties, which helps guide the firm’s investment decisions, says Kurzban.

Global’s four centralized properties in Ventura also share a single leasing office located at the largest property.

A single leasing agent based at the larger property can show potential residents through all four communities.

Especially busy leasing agents can sometimes serve more than one potential resident at once, thanks to centralized leasing technologies.

For example, a leasing agent might be working with a potential resident when they receive a phone call or a text from another prospect at one of Global’s other apartment communities nearby.

“The agent can say: ‘I’m just in a meeting right now over at this property, but why don’t you walk through the property … go to this building, and I’ll give you a code,” says Kurzban.

Once the second prospect has completed a self-tour, the leasing agent can drive a few blocks to meet them at the property.

“Otherwise, we would probably lose that potential resident,” says Kurzban. “Once they leave, they usually won’t come back.”