Apartment operators are constantly trying to decipher the tendencies of renters in each U.S. market, tirelessly accumulating data about resident needs by coast, by region and even by each particular submarket.
More and more, apartment operators are starting to look beyond borders, as well.
Some have already invested in international markets or plan to do so soon. Others are well aware of the 161 percent spike in foreign investment in the U.S. over the past two years. Either way, gaining perspective of how things are done elsewhere is a win-win, as a panel of experts discussed in the Global Trendsetters session at the 2019 Entrata Summit.
“We’re used to having people visit our offices and we tour them; it’s a little different internationally,” said Sherry Freitas, managing director of global property operations for Greystar. “They’ll list an apartment and tell prospects to visit between, say, 3 and 5 o’clock. Thirty people might show up, and there’s an owner in the back taking notes and picking and basically choosing who is going to live there.”
Some of the international multifamily practices might seem archaic, others ingenious and some are simply much different than what’s customary in U.S. markets. The panel agreed that many of the forward-thinking international practices could work their way into the U.S. within the next five to 10 years, and vice-versa.
“For those who don’t operate anything internationally, it’s a completely different ballgame,” said Lisa Newton, senior vice president of Hines. “In many international locations, there is no management onsite. So what we’re trying to do is take our U.S. model that’s fully amenitized with a full team and bring it to a country that’s not familiar with it.”
Property managers in the U.S. often have up to 30 years of experience in the field. In some international markets, property management in itself is a fledgling concept. That doesn’t make any of their newfound concepts less valuable – perhaps the opposite in many cases – but U.S. investors often have to compensate for a learning curve in some foreign markets.
“Oftentimes we’ll see something that’s problematic because we know the end result will be a problem,” said Rob Martin, senior vice president of Rhapsody Property Management Services. “But trying to relay that to someone who has never experienced the problem from the backend can be very challenging. Very often you’re dealing with a condo-developer mindset, and their focus is always on the unit, because the unit is what they sell.”
That goes against the U.S. tendency to take more of a macro-look at the development, considering how the building will operate, how elevators will work and how the amenity spaces will be utilized. In addition, condo developers often don’t have frequent move-ins in mind over a 15-20 year period, thinking residents will generally move in only once. The lack of move-in features and resources can create numerous challenges in a multifamily development.
Undoubtedly, foreign investors scouring U.S. markets might encounter concepts they find equally puzzling. But as the international shift continues, international and domestic multifamily practices will begin to morph.
“My advice is don’t assume anything and always be open to how international teams look at things,” Freitas said.