The multifamily apartment industry is never boring. Multifamily stats in 2018 are yo-yo-ing on a month-to-month basis but overall numbers and trends are positive for much more product on the market. Industry watchers attribute confidence in the development sector to the healthy state of the economy, with labor shortages leading to modest gains in pay and tax cuts leading to larger take-home pay for many workers.
A review of new and recently developed apartment complexes makes clear that property designs, unit features and amenities packages that ruled the business 10 years ago are old-hat today. With millennials increasingly dominating the tenant demographics, developers are introducing hip designs, trendy amenities like roof gardens and technology upgrades to attract their value-conscious target audience. These properties naturally command higher rental rates.
Meanwhile, there are millions of units on the market with old-school apartment features. Some owners will stand by, content to collect current rents without the headache and expenditures of upgrades, particularly if occupancy levels are high and competition is low. More progressive owners and managers, however, see the dangers of pricing and occupancy erosion and are seeking ways to boost revenues and asset values.
What Owners of Older Stock Properties Can Do to Compete
Short of a full-scale property overhaul, owners of older stock properties can take a page out of the master-planned community handbook: destination marketing. Destination marketing is based on the premise that people buy an idea and a value, not just a place to put their beds. Simply stated, it means being able to say, “ABC Apartments is the place to be for XYZ.”
Most properties have some sense of destination marketing, using location-based monikers like “Hillcrest Heights” or “Valley Vistas.” But destination marketing is a branding concept that promises a lifestyle that resonates with a target customer, not just a physical location. Properly executed, destination marketing can deliver more of your best customers and expand your customer base: real estate research shows that some 80 percent of consumers are open to visiting a new place.
The Do’s and Don’ts of Destination Brand
Marketing – Know your Target Audience
The first order of business is to correctly identify your target audience. Look at your current tenant mix and create a profile of your ‘best customers’ in terms of age, income and profession. Then look at lifestyle descriptors like ‘bicycle rider’ or ‘sports nut’ or ‘ecology lover.’ If these are characteristics you’d like in future tenants, your profile is complete – you want to attract more ‘green’ customers. If you want a different profile, find the lifestyle categories that fit like ‘art lover’ or ‘home decorator’ or ‘international traveler.’
Knowing your target audience is more than descriptors. Consider how your best salesperson would address the prospect: What vision is he or she painting? What amenities excite? What words are key to a close? Developing this detailed profile is the single most important aspect of destination marketing.
The Power of the Name
Choose a new name for your property – one that holds promise for your target audience. Names like “Green Living” or “Gallery Lofts” have an implicit promise of a lifestyle that resonates with a target audience.
New properties can pick and choose a property name to fit the profile of their target customer. Owners of existing properties don’t have that luxury – the costs and hassles associated with a complete renaming may be prohibitory. An owner can sidestep that problem by adding a tagline like “Valley Vistas / A Green Living Community” which serves that purpose.
What They See is What They Want
“Curb appeal” is a classic real estate term, and with good reason. An apartment’s exterior appearance from the street is the physical manifestation of a promised lifestyle. In making a property do-over, curb appeal components include:
- New signage, updated with a revised name and/or tagline
- New paint, using a color palette that furthers the property’s new lifestyle look
- Window treatments, doors, and gates using contrast colors to pop or complimentary colors to sooth
- Street and on-property landscaping, with updated vegetation color mixes and where space allows, ‘ebb point’ places with outdoor furnishings where tenants can gather
Updating and revising the apartment’s physical appeal is only part of the destination marketing process. In today’s world, ‘curb appeal’ also applies to a property’s online presence. 90 percent of those looking for a new residence search online. Most owners understand that apartment hunters visit a property’s website before stepping foot inside the development. As a result, they might not be aware of how important it is to maintain their destination marketing brand message on their website.
How to Brand your Website
With any branding, consistency is an absolute must; a customer who responds to a marketing message like an ad will stay on a website if they find the same message and promise. Conversely, a visitor will abandon a site that fails to deliver on a promise. Act fast: a visitor new to a site will allow eight seconds to decide to stay or to go elsewhere.
While a property website will need a requisite number of photos of exteriors and interiors, the main purpose of a destination brand is to connect with the customer on an emotional and lifestyle level. In all likelihood, the template-based inexpensive website created years ago with a logo and property photo is no longer sufficient.
The site messaging is aspirational and emotional, promoting the lifestyle of the target audience. Update the property photography to match the new look of the property from the street, complete with signage. And invest in property and unit photos with live models, to convey that the desired lifestyle is within reach. If the cost of hiring a photographer is too expensive, look to sources that specialize in higher-quality lifestyle photos:
- Royalty-free professional stock photo sites
- Modest-fee professional photo stock sites like Getty, Shutterstock, and Adobe
Visual Destination Marketing
Visual destination marketing also gets a boost from videos. The simplest and most effective video is a site tour led by a knowledgeable property representative who walks the property, promotes features and amenities and interacts with current residents. As a side note, be sure to get photo releases from all parties that appear, including property employees. The video should reside on the property website as well as on YouTube and other video sites.
For today’s consumer, a website’s functionality is as important as the look. Invest in professional web experts who can offer an online experience that is easy and intuitive to navigate. And make sure that those experts develop a version specifically for the requirements of the mobile phone/tablet environment as 51 percent of Internet browsing occurs on mobile devices.
What They Want is How They Search
Invest in a search optimization expert for your online presence. The process includes:
- Optimizing the language of your website, from headlines to body text
- Page descriptors
- Embedded photo and video descriptors
- Search results descriptors
An investment in SEO can pay off pretty quickly. In fact, an optimized site is more likely to place high in search ranking on Google and other search engines. This means a property can enjoy more responses from ‘organic’ search traffic and less from purchased marketing channels. With regards to this, a property can see a rise in search ranking in as little as 90 days.
Your People are Your Brand
Look at your destination brand marketing checklist: new signage, paint, and upgraded landscaping, modest improvements in property amenities, new website, mobile version of site, search optimization – what’s missing?
The final piece of the puzzle is your people. Modest expenditures for logoed tops and other apparel help the brand and improve communications with tenants. The language your people use to represent the property should be thought-through and where possible, scripted. This includes anything from reception greetings to property pitches to complaint responses.
Your tenants are your brand, too. It’s standard behavior for prospects to check your property’s ratings on Yelp and other services. Monitor these services and respond quickly to any negative reviews. Better yet, respond to positive reviews too. Use these as a way to exhibit that your property is responsive to all its tenant concerns.
A Destination that Feels Like Home
At heart, a destination brand is a story: here’s a place you’d like to call home. Considering this, a good destination brand makes that home sound inviting and attractive, promising a community worth joining. By carefully crafting a brand, an owner or manager can create a destination that will grow and prosper for years to come.