As smart access approaches the tipping point of being the access standard, it becomes increasingly necessary for multifamily owners and operators to understand the value of implementing such technologies, and how to set up digital infrastructure that makes it easy to transition to full-scale smart building management. At a webinar hosted by Propmodo, these questions were answered by Latch Chief Real Estate Office Peter Weiss, Greystar Managing Director Heather Moore, and RISE Executive Vice President Courtney Gordon.
Every market is different. To think about how we want to implement smart home features, we study the demographic, residents’ lifestyles, and the type of amenities they want. That really drives the type of technology that we choose.
Studying the market may mean getting ahead of the curve or finding a value-add to what is standard today. The important thing is to keep the property flexible to changing technologies and resident needs.
Our primary goal is delivering the best customer experience to the residents that are moving into the building. 80% of our portfolio is third-party managed and 20% is owned assets, so we have a lot of opportunity to test out technologies on our owned assets and get feedback before we push it out to third-party sites.
We’re focused on having the most efficient operating costs and leveraging technology to support building staff. While saving time and bringing value to the bottom line, we’re also delivering a more seamless end-to-end experience for residents.
It’s not just about replacing the cost of physical keys. In addition to the cost of keys, there’s the cost of a tracker like KeyTrak, the cost to change a lock every time that you turn an apartment, and the fobs to get into the gym that are $4,000 per location. Key management is extensive and costly. Additionally, master keys were a huge liability if the person who had it wasn’t such a good person. Those lawsuits are really, really large, and when you have a smart access system in place, there is no risk of that whatsoever.
Traditionally, you had to buy access control (your traditional base building vendor) separately from unit entry. Now, there’s one vendor for your intercom, access control, unit entry, smart home, and delivery assistant. The ROI is the time that you save from working with one vendor instead of six. Smart access is just the base infrastructure that enables you to do all these exciting things.
With the right demographic or psychographic, there’s a sellable ‘cool factor’ when your phone can unlock your door. For certain groups, that efficiency is a huge selling point.
It’s important for our owner managers to do as much due diligence as they can, going into a selection with Latch or anyone else, we want them to be educated.
Smart access is the infrastructure that enables everything in a smart building and LatchOS, as a modular platform, enables you to start with access and then layer on additional elements over time.
Our intent is to build an entire ecosystem. Residents interact with the Latch App ~5x/day, which is extremely powerful. That's before any of the other exciting things that we're going to be layering on top of that. The end-goal is to have people use the Latch App to enable a lot of the things that they're currently doing across multiple apps.
It would be great if the elevators in Greystar buildings emailed management to remind us that it’s due to be inspected. Imagine if a dishwasher in a building could tell you that it was about to leak all over the floor. In a high-rise building with hardwood floors, a dishwasher leaking for a few hours will have significant damage.
When you begin implementing smart home features and leak detection systems, it’s an upfront cost where the return is more defensive in nature. Thinking about going beyond smart access is about saving money for ownership groups so that they can then put even more money and better technology into their buildings.
Many vendors are looking at the front end of how these technologies interface with the resident or the prospect. The operator is also the client, and reducing those expenses and saving time on the back end is of incredible value. We use a mobile work order app for our maintenance supervisors, and it cuts out the amount of time spent coming back to the office to pick up keys or drop off keys. It's a two-pronged approach: one focused on the resident on the front end, and one focused on the manager who is going to indirectly affect the living experience. If you miss a leak or maintenance is delayed, the resident has their apartment down for an unnecessary period of time. With our properties that have Latch installed, it’s helping us on the selling side for residents but also on the backend side to manage the building efficiently.
If a tenant leaves with a spare key and maintenance is unable to access the apartment, that’s a lost day. For Greystar or RISE, across thousands of units, that cost adds up quickly.
When a building has smart home technology like leak detection, smart lights, and smart thermostats, there’s energy saving costs for the landlord too.
In the future, the smart building will become a marketplace. With “curb to kitchen access”, you're able to bring third-parties in to do things like provide internet access. That will allow owner operators to take money that was spent off premise and bring it on premise as an amenity for your tenant, with upside for you as an owner.
We've built a platform that would potentially enable the local cheese guy, for example, to sell cheese into the building. For that vendor, it’s customer acquisition, for the owner, an amenity they can offer.
Once you get past the point of sale and the resident is living in the apartment, it’s important to continue to think about the living experience. How residents pay rent, submit work orders, and communicate with operators—all of these things are part of the journey that ensures repeat business. Owners and operators need to make it convenient to live in a building, but also to get things done. That’s the future, and leasing agents will become even more service oriented.
People want a spreadsheet with hard data that clearly states that they will get a 10% return on investment on Latch. That’s not the way to think about it. If you take two identical buildings, one has Latch and one does not, which one will be leased out more quickly?
If you do the math on the down days for the building without Latch, there’s your ROI. You have to believe that it makes sense for your demographic and market, that it’s something residents want. As an owner, do you want to be ahead of the curve and lean in or do you want to be a laggard? Any time that you can decrease vacancy rates and reduce downtime, you’re increasing value for your client.
If you consider the demographic and psychographic that you’re serving, and create a package that serves them, there’s an ROI that makes sense.
As new technologies become more mainstream, training plays such a big part, too. You can’t just roll out a new technology and expect it to be adopted—there is a paradigm shift.
Once the training is there and the resident understands how to use it, it's adopted so much faster. Then you really start to see the value. Between a property that has the technology and one that doesn’t, the resident will easily see the value if they’re properly trained on how to use the technology.
One of the top questions we get from clients is regarding the number of apps needed for building management. Nobody wants to come home to their apartment and use one app to pay their rent, another app to fix their leaking faucet, and a third app to open the front door. Residents want a full-scale experience that’s managed in one place.
Our apartment buildings that have the best retention ratios are the ones with the best teams, the ones that wake up in the morning and their number one desire is to take care of the residents and make sure that their living experience is thoughtful and personal.
When you have a client or an owner that is investing in that resident experience by adding technology, you're already coming out of the gate strong because you've decided that you want to be a pro-resident owner.
People do business with people they like. When you have a great attitude and technology, your retention rate goes much higher than the industry average, your vacant days are much lower, your expenses drop, you can push rent a little more due to increased value, and residents don't have a reason to move because of the incredibly convenient living.
The onus should be on us as a vendor to get the owners, operators, and residents up to speed.
Our customers are our partners and we don't get better without learning from them, from the product side to the service side.
To view a recording of the webinar, please click here.