OVERVIEW OF RESPONSES The Big Picture
Non-key secure access and pre-installed Wi-Fi were occupancy drivers, but not rent drivers. A relatively large percentage of respondents said these features are a very high priority , but they did not expect renters in their area to pay much of a premium for them. Comparing responses to these questions allows a similar categorization of property amenities. Secured community access , pools , rooftop amenity space , reserved parking , and additional storage outside the unit were both occupancy drivers and rent drivers. They received higher-than-average very high priority response rates and higher-than-average rent premiums. While few respondents assigned valet parking , car charging stations , fitness trainers , concierge services , movie theaters , clubhouses , fitness classes , and outdoor recreational facilities a very high priority (relative to the other amenities included in the survey), those who did so said that renters in their area would pay relatively large rent premiums to live in a community with these amenities. As such, they could help drive rents, but they were not likely to drive occupancy, all else remaining equal. Community dog parks , sustainability and green certifications , package lockers , valet trash service , community Wi-Fi , and recycling programs were occupancy drivers, but not necessarily rent drivers. Compared to other amenities, a relatively large percentage of respondents said
they are a very high priority , but these respondents said that renters in their area would pay relatively small premiums to live in communities with these amenities. Separating features and amenities into these categories can help owners and operators align a community’s revenue management strategy with its design elements and amenities program, and vice versa. If a property owner renovates their units and installs premium washers and dryers, they may be able to push rents and increase occupancy at the same time. The same might be true if they add rooftop amenity space. However, if they install sound systems with Bluetooth in their units or introduce concierge services, they might be able to charge some residents a significant premium, but they may not be able to increase occupancy because few potential residents place a high priority on these attributes. And if they install keyless locks or start a recycling program, they might be able to increase occupancy given the popularity of these attributes, but they may not be able to increase rent because renters are not willing to pay much for them. Additional soundproofing , living room balconies , pools , and secured community access qualified as rent and occupancy drivers in every major metropolitan area, but
Responses to the first question allow us to calculate the rates at which features are deemed to be a very high priority . Assuming the presence of a very high priority feature increases the likelihood that a prospective resident will lease an apartment, features that receive a large percentage of very high priority responses are more likely to contribute positively to a community’s occupancy rate than features that receive a small percentage of such responses. Responses to the second question indicate the rent premium that respondents expect renters in their area to pay for a feature. Features with relatively large premiums may allow properties to charge higher rents than features with smaller expected premiums, all else being equal. In 2021, additional soundproofing , living room balconies , hardwood-like floors , premium washers and dryers , and stainless-steel appliances were very high priorities to a relatively large share of residents, and the respondents who said these features are a very high priority expected them to command relatively large rent premiums. As such, the survey suggests these features were both occupancy drivers and rent drivers. Floor-to-ceiling windows , bedroom balconies , concrete floors , and sound systems with Bluetooth may have been rent drivers, but they were not occupancy drivers. Only a relatively small percentage of respondents said these features were a very high priority , but these respondents expected renters to pay large rent premiums for them.
apart from these four attributes, the features and amenities that received higher-than-average very high priority response rates and higher-than-average rent premiums varied from one metro to the next. For instance, pre-installed Wi-Fi qualified as a rent and occupancy driver in the Riverside, CA, metropolitan area, but nowhere else. Likewise, outdoor recreational facilities and package lockers drove both occupancy and rents in Sacramento, but not elsewhere. In general, floor-to-ceiling windows , rooftop amenity space, and reserved parking were more likely to qualify as rent and occupancy drivers in gateway markets than in other major metropolitan areas. Additional storage outside the unit was more likely to qualify as a rent and an occupancy driver in non-gateway markets than in gateway markets. These data alone cannot tell us about the value a feature or amenity adds to a multifamily asset. To know that, one also needs to consider the cost side of the equation. Adding living room balconies or a pool to a property might help drive occupancy and rent growth but doing so might be prohibitively expensive. Likewise, device-charging stations and community vegetable gardens might have a small impact on rent and occupancy relative to other features and amenities, but they also might be relatively inexpensive and therefore a cost-effective means of driving revenue.
EIGHT EIGHTY EIGHT Bellevue, WA
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