Multifamily operators grappling with a high number of apartments in lease-up are turning to flexible business centers, wellness spaces and hospitality-inspired services to attract renters and stand out from the competition.
At the start of August, 1.2 million units were in lease-up nationwide, according to an analysis from Yardi released last month — about double the average seen over the past decade. The influx of inventory has made it difficult for managers to raise rents and has prompted them to offer concessions.
This is particularly true for the Sun Belt markets such as Charlotte, North Carolina; Austin, Texas; Nashville, Tennessee; and Phoenix; which have seen the highest tallies of apartments in lease-up. Concession use reached 21.1% of stabilized units in the South this past July, higher than the national rate of 15.8%, per a September analysis from RealPage Market Analytics.
In this competitive environment, offering amenities and services that allow residents to envision a better lifestyle will help the most with lease-up, said Jennifer Glasgow, vice president of brand strategy and experience at Cortland. This includes time-saving services that meet people’s day-to-day challenges and offer them a place to connect with others.
Prospective tenants want amenities that they use on a daily basis, and they have gotten better at recognizing the difference between an amenity that looks good in marketing materials and ones they will actually use, according to Brett Bowden, director of development for the Georgia, Tennessee and Alabama markets at Woodfield Development.
In the past, operators competed to offer the most amenities in their markets. But now, the market is becoming more disciplined, Bowden said. Woodfield is questioning highly specialized spaces that take up a lot of space but don’t get much use.
“Today’s renters are looking for more than square footage and finishes,” said Glasgow. “They want a home that supports their lifestyle, reduces everyday friction and provides meaningful, recurring value.”
Here’s a look at the top three amenities that operators say are helping meet renter demands this year.
Flexible business centers
Korman Communities is seeing strong demand for flexible business spaces that offer options to tenants working outside their apartments, said Brad Korman, the operator’s co-CEO. The traditional open-concept business center amenity has evolved as more residents across Korman’s portfolio look for privacy and dedicated spaces where they can focus.
At two of its communities, for example, Korman renovated business centers that were previously conducive to just one or two people into business lounges with dedicated meeting rooms and pods for phone calls or virtual meetings, allowing more residents to use the space simultaneously, Korman said.
Flexible spaces, able to serve several purposes throughout the day, can be more valuable than a highly specialized room that only appeals to a small percentage of residents, according to Bowden.
Although residents have not been universally compelled to work in traditional open coworking areas as operators had anticipated several years ago, such spaces can still be attractive if they are purposefully built, not one-size-fits-all, said Glasgow. A workplace, for example, could include quiet rooms, private booths for video calls, reservable meeting space, reliable high-speed connectivity and flexible seating, she said.
Wellness spaces
Amenities centered around wellness — like cold plunges, saunas, steam rooms, separated and private yoga studios and fitness pods — have been attractive features for Pegasus Residential’s tenants, said Jared Winn, the operator’s director of marketing and brand strategy.
Outdoor sanctuary spaces, such as tranquil courtyards with hammocks, water features and other areas where residents can get fresh air have been particularly popular in the Sun Belt region and can be “a massive recipe for success,” Winn said.
“Amenities and wellness spaces that encourage rejuvenation have seen large popularity and residents seek it out,” Winn said. “It creates a sense of sanctuary to unwind from a busy lifestyle.”
These spaces tap into an existing wellness-focused trend and have yielded positive returns — becoming large selling features for prospective residents during tours and home searches, Winn said.
“Its a massive differentiator on their search compared to competitors that do not have a wellness-focused amenity offering,” said Winn.
Woodfield has also seen a growing demand for health and wellness amenities such as saunas and cold plunges, according to Bowden.
“I think this will be the largest growth area in the coming years as the younger demographic continues to focus on their health,” said Bowden.
Hospitality-inspired services
One of Korman’s biggest differentiators in lease-ups has been its resident services, including dedicated on-site teams that provide concierge-style assistance with tasks such as local recommendations, valet dry cleaning and 24/7 emergency maintenance, said Korman.
Korman also offers community programming, in which its teams design a monthly calendar of events like barbeques, dance lessons and craft nights to bring its residents together, he said.
“These are especially well-attended with so many residents relocating to Phoenix from other states and looking to meet their neighbors and make new friends,” said Korman.
Young and lifestyle-oriented renters often value flexibility, connection, design and neighborhood experiences, making coworking areas, social spaces and residential programming appealing, said Glasgow.
Affluent and established renters, who often place a premium on convenience, service, ease and low-maintenance living, are often attracted to hospitality-inspired services, package solutions and coffee offerings, according to Glasgow.
Such services “make apartment living more convenient and enjoyable,” said Glasgow. “The amenities helping most with lease-up are those that allow potential residents to envision a better lifestyle, not just a better apartment.”
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