Earlier this year, we took a look at the likely impact that the ongoing COVID pandemic will have on proptech and contech. Doom and gloom are now setting in for the autumn months and it almost feels like we are back in March, with little prospect of things getting better any time soon. New patterns of behaviour are forming in our everyday lives and, with an uncertain timeframe as to when we will be free of restrictions, it is increasingly likely that many of these will become the “new normal” even when the current emergency is over. It is therefore essential for real estate and the tech companies servicing it to understand and adapt to these changes, both for the short term and in the long run. With this in mind, over the next few weeks I will be looking at how different sectors of the real estate industry are affected by the pandemic, and the solutions – through tech and other means – they are turning to. First up is the multifamily market.
In order to dive into the changes that rental residential real estate is facing, I enlisted the help of RET Ventures partner John Helm. Since RET is primarily backed by multifamily players and invests in technology that is dedicated to adding value that sector, he is uniquely placed to share insight on what is afoot.
There is a flurry of activity in the residential space, with COVID accelerating technology trends that were already underway. According to Helm, a lot of solutions that were already coming forward are now being aggressively adopted, when there is clear value that helps deal with the current crisis. The most prominent overarching theme at present is self-leasing.
The goal of self-leasing is to make it as easy to rent an apartment as it is to book a hotel for a vacation. A prospective resident should never even have to go into a leasing office, but rather should be able to register to view remotely, self-tour, and transact their lease online. Helm shared that RET’s partners are deploying such solutions across their portfolios and, though nobody has yet installed the process end-to-end, he expects it to happen over the next six months. This is what things could soon look like, using RET portfolio companies as examples for each step.
Funnel, a CRM provider, has developed an online leasing platform with the goal of enabling fully digital transactions. This is allowing leasing teams to communicate remotely and manage leads seamlessly across properties; owner-operators can continue to work efficiently even if their teams are all connecting remotely. According to John Burkart, Essex Property Trust COO, “Our top leasing agents are leveraging Funnel to be two to three times more productive than the average leasing agent.”
Before a prospective tenant tours a property, they will be thoroughly screened using CheckpointID. As the coronavirus pandemic worsened, CheckpointID sales actually accelerated, according to Helm. Its online identity verification product confirms a person is who they say they are ahead of a self-tour, without a leasing agent ever needing to meet them face to face. CEO Terry Slattery shared that “Prior to COVID, 3% of our traffic was being verified remotely with our product set. That increased to more than 40% during the height of the pandemic. In addition, having the ability to carry out “touchless” ID verification – where the prospect never gives their ID, even in person – has been critical to apartment communities as they try to remain safe.”
The next step is allowing a prospect to tour. SmartRent – which we looked at in this column’s early days – is a smart lock and smart home integrator, which expanded to building wide access systems and self-touring software. Because their technicians had to access properties in order to install equipment, they saw their sales drop to zero at the start of the COVID crisis. However, they quickly countered this by releasing a self-touring product with an app that enables communities to offer self-guided tours and a door lock that can easily be installed into vacant units by the local maintenance team. Touchless entry for apartment buildings is also being deployed across the board. According to Helm, over 3,000 self-touring kits have been installed across the US, with over 120,000 self-tours to date. LenX Managing General Partner Eric Feder shared that “in an immediate response to the outset of the Covid pandemic, in just a 3 week period, SmartRent retrofitted 2,400 model homes allowing our customers to conduct self-guided tours and safely and effectively visit and select their dream Lennar home.”
Aside from this core theme of self-leasing, Helm pinpointed several other solutons that are gaining ground in the multifamily space.
I’ve covered SightPlan on this column in the past; today, they are seeing a big pick-up in business since they help make maintenace work more efficient in an enviroment in which less staff goes in to work and there are more checks. “SightPlan has been a valuable tool that streamlines communications for our maintenance teams, and these benefits have been amplified during COVID-19” shared Robbie Parker, Director of Facilities for BH Management. “In the world of COVID-19 protocols — where every item taken into an apartment has to be disinfected — it’s extremely helpful to pre-diagnose the problem and pre-determine what tools you need. We value the partnership we have with SightPlan, and appreciate their prompt response to deliver enhancements to their software that enabled us to not only tag individual tasks and units for those self-isolating, but also for a global communication of the ever changing directives to keep up with local and state guidelines.”
Besides its new product detailed earlier in this article, SmartRent’s core function is also becoming increasingly useful in the pandemic. They currently have over 100,000 smart units, with over 700,000 active devices and over 250,000 active users. As more people shift to online purchases, logistics are coming under ever greater pressure. Though smart package lockers may be a good interim solution, Helm firmly believes that the goal within apartment buildings should be for packages to be delvered straight to their destination unit at the first attempt, even if nobody is home. He reckons that SmartRent’s partnership with Amazon and RING could be a game changer, as residents can now order goods via conventional e-commerce channels and grant delivery personnel access to their front doors via temporary pass codes on the lock, enabling drivers to put packages directly inside the apartments. The obvious issue raised by allowing delivery drivers into an empty apartment unit is security, but the RING cameras capture the entire encounter, alleviating that concern.
These are only some of the tech solutions for the multifamily industry that Helm detailed in our discussion. Though they target different elements of the value chain, they all share the same core features of increased safety and efficiency that are crucial in today’s crisis environment, and that are most likely here to stay in the long term. Change was coming, like it or not, and the pandemic has only served to accelerate it.