Proptech and Multifamily: Bridging the Gap

Historically, advanced Proptech has been predominantly geared towards commercial real estate, especially for operations and maintenance technology.

As a result, residential buildings have often lagged in adopting these innovations due to their unique operational characteristics.

One major hurdle for tech adoption in residential buildings is their high demand and consistent occupancy. Installing smart building hardware such as sensors can be challenging in continuously occupied and potentially understaffed buildings.

Instead of focusing on costly upgrades and large renovation projects, these buildings often benefit most from implementing software solutions that provide automated control adjustments to their HVAC systems, reducing the need for manual adjustments throughout the day.

Automation and Efficiency

A study by the Pacific Northwest National Laboratory in 2017 found that commercial buildings across all climates could achieve an average energy saving of 29% by implementing intelligent building controls. However, energy savings should not come at the expense of comfort.

A recent study shows that most tenant issues revolve around comfort, with 66% of respondents citing it as their most common request for property owners and facility managers.

Building controls can do more than just save energy.

Automation can significantly reduce the workload of building staff by offloading repetitive tasks and streamlining workflows. Instead of receiving alerts requesting manual control adjustments, having a solution that automates control adjustments in real-time allows staff to focus more on higher-value requests from residents and guests.

Buildings can also increase their net operating incomes (NOI) through automation.

In addition to enabling staff to do more with less, automating operational processes can reduce operating costs such as utility expenses and maintenance costs from service contractors. This is particularly important in today’s elevated interest rates and inflation environment.

Many property teams are now burdened with compliance reporting.

This is the first year of New York City’s Local Law 97, while Boston is introducing BERDO in 2025, and Denver introduced Denver BPP back in 2021. These building performance standards are driving the adoption of Proptech solutions designed to deliver ongoing and measurable energy reduction.

Automation and energy efficiency solutions targeting CO2 emissions can be a quick and cost-effective way for buildings to avoid potential fines.

Occupant Comfort

Occupant comfort remains a key concern for tenants and guests. Unresolved issues or poor customer service can tarnish a resident’s image of a building and its management staff.

A Proptech solution that targets your HVAC system with automated control adjustments will not only make comfort complaints easier to address but will also reduce the number of complaints thanks to an adaptive system and preventative maintenance.

Thus, integrating advanced technology into residential buildings should be a priority for owners and operators.

While it might not always be easy to find the time, money, and bandwidth for large-scale upgrades, significant gains can be made by implementing the right software.

Challenges in Multifamily Development

Developing multifamily properties comes with its own set of challenges.

Securing financing, permits, and approvals, and dealing with construction costs are just the beginning.

Once construction begins, the lease-up period becomes the final hurdle. Leasing up a new apartment building can generally take anywhere from 3 to 18 months. This period is crucial for owners, as getting tenants in place so rent money can start flowing in reduces financial worries.

Innovative Marketing Strategies

The pressure to fill up the property has led to some creative ideas about how to better market a building and make the move-in process more seamless through the use of technology. Miami-based development firm The Related Group partnered with META original to help market its South Florida condo buildings. The developer used photo-realistic renderings that potential buyers can customize, boosting sales at the property.

Pop-Up Hotel Concept

A trend that has become more popular recently with property owners looking to speed up the lease-up process is the pop-up hotel concept.

In this scenario, an outside company takes a portion of the units in the building and essentially makes them hotel rooms; fully-furnished apartment units for short-term lease with services often found in hotels. These units are typically ready and filled from day one when the building is completed, providing instant income and showcasing amenities to potential renters.

Conclusion

Integrating Proptech solutions and innovative marketing strategies can significantly enhance the efficiency and appeal of multifamily properties. By addressing both operational challenges and tenant comfort, property owners can ensure a smoother, more profitable lease-up process.

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