Smart-home technology is generating greater efficiencies for apartment residents and their communities’ onsite teams alike. Innovation in this space has created a surplus of providers with a variety of solutions and price points.
Given all the options, multifamily C-suites wonder: If only the decision on which provider to choose was made more efficient.
The global rental-housing company Greystar has both recognized the necessity of offering competent smart-home technology and has discovered an interesting option in a growing field of emerging providers, said Andrew Livingstone, its executive managing director.
“The pandemic created a large shift in how we operate, and it moved us forward a decade,” Livingstone said. “It changed how we think about operating apartments. It forced us, out of necessity, to think more futuristically, given the circumstances.
“It firmly created opportunities in apartment-access technology, making how we enter our apartment homes a fundamental cornerstone. We’re seeing unprecedented changes with access given recent transactions involving companies that offer this and their valuations.”
Livingstone said access and smart-home technology are now an “absolute must-have,” not a “nice-to-have:” “It won’t just be in some apartment buildings; it has to be in all the buildings, he said.”
There are several players in smart-home tech technology – but there is not a clear winner, he said.
“It’s an exciting time as brands continue to innovate their services to establish themselves as leaders in this space,” he said.
Greystar is working with owners who want to try this, Livingstone said. Greystar has been the largest third-party management company in the country for 11 years running, “and right now we know that we do not have as much of this technology in our portfolio as we would like.”
Livingstone said his team realizes it needs to evolve to serve the needs of its residents, clients “and the ever-changing times we live in.”
For example, “We need to find out what smart-home technology platforms integrate best with the various components (thermostats, lights, window blinds, etc.,” he said. “What kind of battery life these systems have; what kind of after-hours service we can provide; and most importantly, how this technology can facilitate greater convenience for prospects wanting self-guided tours?”
iApartments was chosen to deliver smart-home technology to 2Bayshore, a 367-unit community built in 2015 and one of the premier buildings in the Tampa commercial business district, a popular neighborhood for young professionals.
No IoT Dedicated Wi-Fi Networks Necessary
The breakthrough aspect of the technology is that each unit is equipped with the proprietary 4-in-1 smart-hub thermostat designed for 24/7 connectivity. The system allows communities to have smart-home technology without the property (or its owners) having to invest in dedicated IoT Wi-Fi networks, which can cost from $600 to $1,000 per door.
2Bayshore’s system’s ability to provide smart-home technology access through the apartment home’s thermostat gives each unit water-leak detection and additional plug-ins for lighting and other connected devices.
“These are the things our residents want,” Livingstone said.
2Bayshore retrofitted with an enterprise smart-home platform in a move to help it compete with amenities offered at nearby new apartment developments. With existing apartment communities playing catch-up in this way, cost and intrusion have become key factors.
Installation at 2Bayshore did not require high-voltage power or Wi-Fi infrastructure, so the transition was of minimal disruption to residents, and without any damage to the physical structure.
“Many of our clients don’t have the capital or budget to invest in an intelligent apartment program,” Livingstone said. “Those kinds of networks can be expensive, and we’re finding this system works really well out-of-the box. I’ve seen it in action. I’ve spoken to our onsite teams. This checks all the boxes without having to make additional Wi-Fi investments.”
Calculating Net Operating Income
Company founder Dave Magrisso has more than 20 years’ experience in multifamily onsite products; he played the lead role in one of our industry’s first amenities as a service (AaaS) – Valet Waste (now Valet Living) – and understands how additive features and services represent value to residents and property owners. It’s an economic model he used during due diligence on smart-home technology installation benefits.
Magrisso shows that a 350- to 400-unit garden-style community could potentially bring $118,000 in additional annual net operating income (NOI) based on a $35 per month smart-home rent premium. This would increase the overall asset’s net value by roughly $2.3 million based on a five-percent cap rate.
Furthermore, using $2,200 per month as the average rent, this will could create an estimated $150,000 total increase in NOI based on modest numbers of new leases signed because of the amenity and improved retention rates.
Why Water-Leak Alerts are Crucial
Like many communities, 2Bayshore is mostly made of concrete, and concrete can present moisture issues. As part of 2Bayshore’s smart-home package, three wireless smart water sensors were placed around the residence, plus a built-in humidity sensor was placed in the thermostat, which automatically sends emergency alerts to both the resident and maintenance team when these sensors detect water or moisture.
These sensors discover slow leaks, giving 2Bayshore a preventative solution instead a reactive one.
Installing leak-detection alert systems in apartment communities (they are required in some markets) has resulted in less wear-and-tear on the apartment home and reduced maintenance work orders.
The system’s float-switch alert is saving maintenance technicians 30 minutes per HVAC system repair event, and is helping to decrease overall work orders related to clogged HVAC drains. (Clogged HVAC drains represent approximately 80 percent of HVAC-related work orders at communities.)
2Bayshore residents also can access their smart-home system’s energy management capabilities by controlling their home temperatures from anywhere through an app on their phone.
Once inside the apartment, residents experience a lifestyle upgrade by using their smart wall plugs to control things such as lights, coffee makers and personal devices.
Cutting Costs by Not Cutting Keys
That resident app also is the key to activating the community’s smart-lock access for renters or to generate temporary guest codes for deliveries and other common services such as dog-walkers or package delivery.
Physical keys are not only out of date, but can easily be replicated and used to enter the property without consent. Common places to find a key (under the mat, under the flower pot, inside the fake rock, or lock boxes) may be unsightly or not allowed on some properties.
The access system also has helped 2Bayshore save on expenses and staff time. The company was able to cancel a current contract to manage its key tracking, saving it $2,940 per year along with eight team hours per month needed to cut keys.
There are times when onsite teams need access to every unit in a community, such as during fire inspections. In that case, at 2Bayshore, it required 367 keys to be pulled to ensure easy access into each unit. There are security issues with tracking the keys, and knowing that keys are easily copied creates a significant liability for the management team.
Needing to access various apartments approximately 150 times per month, the smart-access system saves its onsite team roughly 456 hours per year in service time.
Livingstone said as he continues to implement these technologies at more communities, and the onsite teams work with it more, “we are able to provide valuable feedback that helps smart-home technology providers improve the quality of their offerings.”