Multifamily: From Recession to Recovery

I doubt anyone in this industry can say that they haven’t felt the effects of the recession. It has dominated discussions and educational sessions in our industry for the past several years. The recession has been described as difficult, challenging, and even devastating. Our current economic conditions have trained our focus on selling with concessions and renewing leases without rental increases; but it’s only a matter of time before those conditions come to an end, enabling us to refocus our teams on strategies that are tailored for the turnaround. It’s time to transition out of the recession and begin leading our teams toward recovery.

During these difficult years we have also experienced a heightened awareness of the way people shop for an apartment and the tools/websites they use to complete their research and the way our residents choose to communicate their feelings about us. Our economy is showing signs of recovery, so the time to prepare is now! It’s time to train our people with the techniques they’ll need for the recovery, including proven strategies that focus on selling without concessions, retaining residents by building better relationships and improving our reputations for value and service, while increasing rents without losing residents.

The way we lease, market and manage our communities was changing long before the recession came along; but I believe that the recessions’ silver lining has been a heightened awareness of the information, tools and resources that are available to us. The recession forced us to open our eyes and look at every aspect of what we were doing on a daily basis. This recession will not last forever. One day soon, we’ll wake up and the recession will be nothing but a memory. If you act expeditiously, you will be able to capitalize on the opportunities that the recession has created.

The recession that we are currently emerging from continues to present what may be the greatest opportunity we’ll have to advance our companies and communities, accelerate our strategies, and gain significant market share over our competitors. There are several reasons why I believe this to be true:

  • Some of our competitors checked out. They dug in, hunkered down, and chose to ride out the recession instead of participating in the transformation of our industry, leaving an opportunity to garner market share. Recessions have historically created incredible opportunities for those who jump in and take advantage of them. Late in 2006, several companies spoke to me about their repositioning and getting ready for the next big wave of opportunities coming our way. Today these same people are reshaping our industry to what it will become in the next five years. We only need to open our eyes wide and see that companies are growing, transforming and transitioning!
  • Change in the economy creates changes in leadership. In a recession, people, gravitate toward strength and leadership. Drastic change can cause existing market leaders to hesitate or falter or even freeze, creating an opportunity for those who had the foresight to move in. It can also give market leaders their best opportunity to extend their lead, showcasing their strengths.
  • Mindset becomes more important than ever. Mindset—or the way we think about the way we do business—becomes even more important in a recession. A company with a mindset, or culture, of everyday innovation and relentless improvement can improve its position more quickly now than ever before. Mark Smith of Smith and Barney shared a valuable insight with me: he said that a recession is simply a reallocation of assets from the timid to the bold. BE BOLD.
  • Those of the old school will say that to talk of opportunity in a recession isn’t being realistic. They are WIMPS! Nothing is more realistic than to act on the opportunity presented by this economic upset. This recession has been simply another strategic inflection point that has caused us to move in a new direction. Our industry has experienced many strategic inflection points and we have always come out with a fresh new and exciting future. You only have to look at the mid-to-late 80’s and see that this is true.

It’s all about the way we think and see. If we can open our eyes to see the opportunities of the recession—or any other circumstance for that matter—we can take advantage of it. We need to make the recovery work for us, and here’s how:

  • Start with the end goal in mind. Too many companies execute strategies without having a clear, compelling idea of what they are aiming for or how to get there. We need to know exactly where we want the new economy to take us. Clarifying the vision and our goals is the starting point for an opportunity mindset. It’s time now to focus on the new vision the recession has given us.
  • Stop talking about it and JUST DO IT! Successful organizations and individuals have a great propensity for action. While others talk about what to do, leaders just do it. We can’t let the after effects of the recession freeze us into inaction.
  • Be willing to fail. If we wait until we are 100 percent certain of success before we try a new idea, we’ll never do anything. Successful people know that even if an idea fails, they gain new information by which to correct their path. Recessions change rules. The marketplace is looking for new ideas.
  • There are no real experts anymore. The market has changed and those who believe themselves to be experts can get too easily caught in the “I know how to do this” trap. Anyone who calls him/herself an expert today probably knows a lot more about how things used to work—how to compete and win in market conditions that no longer exist—than they do about how to succeed in the now. Today’s a new day with a whole new set of challenges, resources and information available to us that will require new approaches. The best lessons are learned after you know it all. Be passionately curious and always on the lookout for the new best idea. Recessions create new realities. Be open to them.
  • Improve relentlessly. What did we do so far today that made us better than we were yesterday? It’s a tough question, because even though our intentions about improvement are good, it’s difficult to actually take action that improves performance. Look at everything with the permanent question in mind of “how can we make this better?” We can’t take advantage of the end of a recession if we do things the way we’ve always done them. We have to look at what we do with renewed vision.

A few very simple things that we all need to start doing today to overcome the situations we have created by offering the concessions that have contributed to the lower perceived value of our communities are:

  • Build value in all the little things we do in the normal course of business. For example, we complete exterior lighting inspection. Where are our residents when we do this? If you are like I was I did them at night with a drive through of the community while our residents are sleeping or residents are at work when the service tech’s go through the community turning on all the common area lights. OR where are they when we have the breezeways cleaned? In these cases the residents don’t even know that we perform these services. Yours might be the best community in the world, but to the resident who is paying the rent, it often comes down to, “What have you done for me lately?” Avoid being “out of sight, out of mind” and take credit for all the routine things that are done in your community that the residents never see! Build value by letting them know these services are performed because the community cares!
  • Build value in your community by reminding residents of all the great amenities your community offers. We created the Healthy Choices series to encourage residents to use the many healthful-living amenities we offer that they don’t always use to full advantage. Residents who make it part of their everyday routine to use our valuable, fitness-enhancing amenities are likelier to not only live healthier, happier lives, but are more likely to renew! These door hangers are designed to deliver a powerful message

There are many companies that have embraced the recession as an opportunity to both grow and succeed rather than as a time to hunker down and take cover. We have strategized our way through these challenging situations, and now it’s time to think about the transition and the opportunity it presents to retrain, refocus and reinvent the way we play the game.

Over the next two weeks, because we feel that many markets are starting to move in a direction that requires thinking about and retraining our teams, we’re going to help prepare you with renewal strategies that will support raising rents without losing residents. While you’re turning your thoughts toward retention/renewal, here are a few Multifamilypro products that we think you may find of help in focusing your residents’ attention on the value and services your community provides!

To view our Healthy Choices line of door hangers and other products, CLICK HERE!