February 25, 2021

Retrofit Projects: How to Differentiate Your Property, Streamline Operations, and Increase Demand

In the current market, differentiating your property can be a challenge. Especially in larger cities with excess inventory, renters are searching for a top-tier experience. For developers building from the ground up, it’s just a matter of advance planning to integrate features that are becoming table stakes for renters like smart home products, amazing amenity spaces, and finishes like granite countertops or stainless steel appliances.

Owners and operators of more mature buildings, however, are presented with a unique challenge. Because they’re restricted by the existing building infrastructure, they must approach retrofits creatively to deliver the experience that residents expect—without blowing their budget.

LatchOS is a seamless way to modernize retrofit projects within the existing building by empowering owners and operators to streamlining operations and more effectively meeting resident expectations. Since 2017, Latch has partnered with hundreds of owners and operators on hundreds of retrofit projects across 25 states. Designed with flexibility in mind, it’s the ideal solution for retrofits to lower overhead and create the convenient and flexible experience that residents expect.

Multifamily Competition Continues to Increase

The multifamily real estate market continues to become more and more competitive. With nearly 350,000 new units expected to be developed annually over the next 10 years, the growing volume creates more options for residents. Even as the number of renters continues to rise, this increases competition among owners and operators across the country as they work to attract and retain residents.

Though renters are beginning to move more to suburban environments, construction in secondary markets like Austin, Atlanta, Phoenix, and Boston is booming. These high-growth smaller cities represent a significant opportunity for owners and operators to capitalize on renters’ changing location preferences—if they can distinguish their properties in an increasingly crowded market.

With the majority of renters viewing at least five apartments before they sign a lease, the competition for owners and operators is stiff. New developments are often the more appealing option for renters thanks to the brand new amenities, higher-tech offerings, new appliances, and updated finishes. Existing assets are then forced to not only compete with each other, but also more new buildings every year, to lease-up. As a result, they must find smart ways to invest in the most impactful upgrades that don’t call for a full-scale renovation.

From amenities like recording studios and live music spaces to connected co-living spaces, new developments continue to innovate, creating an “amenity war” that often leaves existing assets in the dust. But 58 percent of millennials believe that amenities shouldn’t just be flashy—they should instead provide helpful services to make life more convenient, opening the door for more mature buildings to retrofit new technology and still meet—or exceed—resident expectations.

Differentiation is Paramount

50+ unit buildings built in 2015 commanded, on average, over $1,500 in monthly rent, while those built between the 1940s and 1980s list for only around $1,000—resulting in a significant drop in rental revenue for older buildings. Similarly, age of a building has been shown to have a direct correlation to rent prices, demonstrating that new units often drive the highest demand among renters. As a result, older buildings must consider capital improvements to stay competitive with their newer counterparts and attract the same level of interest—and as a result, higher revenue.

To do so, there are four key areas multifamily owners can address to make an impact on both their operational efficiency and renter demand: smart access, guest and delivery management, smart home, and connectivity.  

1. Smart Access

Key management is one of the most expensive and time-consuming operational elements in any multifamily building. Especially in buildings with a larger number of units, managing and maintaining keys is an expensive annual cost.

The KeyTrak system, for example, costs around $10,000 for the system alone. It also requires the oversight of a dedicated building staff member who, instead of spending time managing keys, could add more value to the community as a concierge or resident resource. Keys also get lost or stolen, adding additional expense for owners and operators. The average cost for replacing or rekeying a single lock is between $85-$115, which between lockouts, lost keys, and tenant turnover adds up in the long run.

While owners are looking for a way to eliminate key costs, residents are looking for a more modern solution that delivers more flexibility. Smart access devices have continued to become more and more popular among residents, so much so that it’s now one of the most-desired smart home amenities—and they’re willing to pay a premium for it. Residents report they would pay at least $20 more per month for smart access, enabling buildings to generate more revenue and lower overhead to increase ROI.

While there are many access solutions available, many of them don’t deliver an improved user experience for every stakeholder. Certain smart locks only provide residents one way to unlock or don’t allow remote access sharing, while others don’t deliver the enterprise management capabilities that building staff need to increase efficiency and save themselves time.

Latch’s smart access products, on the other hand, deliver the convenience and flexibility that residents, property managers, and guests need—all while working for every door. As buildings settle and door frames shift, door alignment and motorized lock operations can become compromised, which can pose a challenge when trying to retrofit. The Latch C2 solves these problems for unit access with its patent-pending turn mechanism that increases the longevity for each building. It also doesn’t require any extra wiring or infrastructure thanks to a modular design made to simplify installation, resulting in faster installs, lower upfront costs, and fewer logistical headaches for both owners and installers. Latch also has the Latch R, Latch M, and Latch Intercom access products that offer versatile solutions for front entrances and common areas.

Latch ensures that everyone can gain access when they need to by giving users multiple ways to unlock, like the Latch App, Apple Watch, keycard, or doorcode—all while saving property managers the hassle of managing physical keys. Latch’s enterprise management software, Latch Manager, gives building staff a unified solution for access management. Instead of dealing with late-night lockouts or coordinating key pickup with new residents, Latch Manager is a web-based solution that empowers property managers to oversee access from anywhere—even remotely. This allows them to create operational efficiencies and eliminate the overhead required for both a key tracking system and a dedicated building staff member, while also decreasing their operating costs.  

Thanks to the comprehensive capabilities of LatchOS, some of the country’s biggest developers are opting in for their entire portfolios. Prometheus Real Estate Group first added Latch to several of their new development projects in 2018. After witnessing the immense value Latch added to their properties and seeing positive resident response to the system, they decided to retrofit their entire portfolio to bring this powerful solution to their existing asset base.

“With Latch, we can log in anywhere, see who has access to what doors, and remotely give access to residents,” said Greg Collins, Senior Regional Project Manager at Prometheus. “It even lets us enable more seamless unattended leasing for prospective residents. It really gives us everything we need, all in one place.”

2. Guest & Delivery Management

With more and more people doing their shopping almost exclusively online, existing multifamily buildings are presented with a unique problem. Unlike new construction buildings that can plan for the growing influx of eCommerce deliveries, older buildings don’t have the advantage of advanced planning. As a result, they often don’t have dedicated storage space for resident packages. With some buildings reporting as many as 1,000 packages per month, this can lead to towering stacks of boxes, overflowing management offices, and missed deliveries for residents.

As eCommerce sales continue to grow, physical storage space isn’t the only concern. 68% of building staff report spending between one and four hours per week simply keeping up with resident deliveries, highlighting a time-consuming process that pulls operational resources from other areas. This can make a significant impact to a building’s bottom line. In 2015, for example, Camden Property Trust estimated that they lost 10 minutes of productivity for each package delivered across 59,000 units. When paying employees $20 an hour, that adds up to over $3 million lost each year.

Package management isn’t only a headache for building staff. In 2020 alone, Americans lost $5.4 billion in stolen packages, making proper package storage a real concern for residents—especially since 43% of people report having had a package stolen. With 84% of residents reporting they want a secure and self-service way to access their packages 24/7, a seamless package management solution gives residents what they want while also saving time for building staff, making it a win-win addition when retrofitting.

There are many different package room solutions available for retrofits. From free-standing package lockers to third-party off-site package management, most solutions only solve a small portion of the multifamily package problem and require a significant investment in the form of dedicated square footage.

Luckily for owners and operators, a secure package experience doesn’t call for large line items in the budget or oversized package rooms. The Latch Delivery Assistant is an all-in-one solution that manages access, package management, and resident notifications, making it easier for multifamily buildings to manage incoming packages, for delivery providers to drop them off, and for residents to receive them.

Whether reallocating an existing amenity space or utilizing a vacant unit for package storage, or simply creating a more organized package solution in the building lobby, retrofits can leverage the Latch Delivery Assistant in any space to streamline operations and ensure residents are always notified when packages arrive.

With the Latch Delivery Assistant, delivery providers dial “package room” on the intercom when they arrive. Their call goes to a 24/7 remote operator who grants them access to both the front door and the package room, as needed. This also serves as an access solution for other unexpected guests, like friends and family, who can also easily gain access by dialing residents using the Latch Intercom. That way, any building can have a doorman that is better equipped to handle all of a building's guest and delivery needs—for a fraction of the price.

During low-volume periods, the driver gives the remote operator the name of the package recipient, and the resident receives a text notification that their package has arrived. During high volume periods like the holidays, the Latch Delivery Assistant provides property managers with a powerful scanner tool in Latch’s enterprise management software, the Latch Manager App. Though most package management solutions require a separate barcode scanners or other hardware, the Latch scanner works with the property manager’s own smartphone to streamline the experience. They simply open the app, snap a photo of the label, and it’s then instantly uploaded to the cloud to notify residents of their package’s arrival.This alleviates the burden on building staff to simplify operations, save time, and lower operating costs—all while delivering a more seamless resident experience to help bolster retention and increase general satisfaction.


3.Smart Home Products

While smart home products may seem like a solution reserved exclusively for new developments, it’s another way for retrofit projects to differentiate themselves. Studies have shown that renters prefer smart home amenities over any other kind—and are willing to pay up to to $45 more in rent—making it an effective way to stand out in an increasingly competitive market.

Smart home products don’t just improve the resident experience. With rented units in multifamily housing consuming the most energy per square foot, there is a significant opportunity for owners and operators to lower costs by installing energy-efficient smart home devices. With an inverse relationship between building age and energy efficiency, retrofit projects are the perfect opportunity to improve energy efficiency and realize significant cost savings in the long-term. Even in vacant units, smart home products allow building staff to turn off lights, raise or lower the temperature, and monitor for leaks, which can lead to total savings between 43% and 58%.

BH Management estimates that smart home products alone save them $38 per unit per month, which in a 100-unit building results in an annual cost-savings of over $45,000. Additional benefits like cost-savings from preventive maintenance and discounts on insurance premiums for leak detection make smart home products an even smarter investment for owners and operators.

LatchOS delivers a single, seamless solution for retrofit projects to incorporate several smart home products. Thanks to a range of industry-leading device partners like Google Nest, Honeywell, and ecobee, owners and operators can create a comprehensive smart home experience—from unlocking the door to controlling the temperature to turning off the lights—using a single interface. That way, residents don’t need to download multiple apps to control different devices, and can instead oversee everything right from the Latch App. Similarly, building staff can manage devices in common areas and vacant units in Latch’s enterprise management tool, Latch Manager, to unify building operations in one place. Latch can also power any smart home device using the cellular LTE capabilities of the Latch Hub, ensuring that buildings don’t need to invest in building wide Wi-Fi—on top of the smart home products themselves—to minimize the upfront cost and maximize ROI.

4. Connectivity

Connectivity isn’t just a necessity for residents looking to get online with their smartphone and laptop. It’s also a must-have component of the building infrastructure required to power the smart home products that residents expect in their private space, common areas, and main entrances. From smart thermostats to leak detectors, each device requires a constant internet connection. Without it, owners and operators fail to deliver on the smart-home experience that allows them to stand out and instead leaves residents wanting.

With the popularity of smart home products soaring, connectivity has become an important element for multifamily buildings. While new development projects can accommodate this need during construction, older buildings are presented with a unique challenge: how to create a building-wide connection in spaces that don’t have the required electrical infrastructure. But with the costs of Cat6 ethernet cabling at $200 for 2,000 feet—before labor costs—it is an expensive undertaking for buildings that need to start from scratch.

Instead of relying on complex wiring solutions, owners can support smart home capabilities like smart access and climate control, all without requiring building-wide Wi-Fi. The Latch Hub has ethernet, Wi-Fi, and 4G LTE cellular connectivity to connect each device—even in vacant units—to streamline enterprise management, all while requiring only small infrastructure changes to the building. With the Latch Hub, building staff can also continue to monitor vacant units using cellular LTE after a resident moves out for simplified turnover, and then assign the control to the new resident in the Latch App as soon as they arrive.

LatchOS: Single, Unified Solution

Instead of requiring significant capital improvements to modernize, LatchOS offers owners and operators a way to streamline a building’s most important capabilities and increase renter demand, all using a single operating system. Now, smart access, guest and delivery management, smart home, and connectivity aren’t just separate solutions that require multiple different apps, workflows, and staff. LatchOS is a full-building operating system that works with a building's existing infrastructure to offer a simpler, more effective solution. Depending on the property specifications and budget, owners can choose to invest in one or several LatchOS modules now to tailor the solution to their needs, and can even add on additional modules over time.

From access devices made to accommodate door alignment issues like the Latch C2, to smart home devices like light switches and thermostats for added energy efficiency, to the Latch Hub that connects every product without building-wide Wi-Fi, Latch has a powerful ecosystem of products that are flexible enough to increase efficiency, maximize cost savings, and offer a more modern resident experience.

Latch software is the connective power between each product and experience. The Latch App on iOS and Android makes it easier for residents to access their space, control their smart home devices, and let in guests and service providers to deliver a top-tier experience that empowers retrofits to compete with their new development counterparts. Latch Manager is the powerful enterprise management tool that enables building staff to oversee access, manage packages and guests, and increase energy efficiency to streamline operations, save time, and lower overhead. When paired together, this combination of software, products, and services delivers a better experience for everyone at a building.


Conclusion

For retrofit projects, differentiation and ease of implementation are the ultimate goals. By appealing to renters with modern amenities and a top-tier experience, it’s possible for even mature buildings to compete with the new developments that are consistently leasing up in both larger and small cities alike without blowing their budgets.

Because owners and operators of existing assets are restricted by existing infrastructure, finding a solution that enables them to meet renter demand without investing a fortune can be a significant challenge. But instead of settling for second-best or allocating an unnecessarily large line item in the budget, LatchOS offers a streamlined way to power a building’s most important capabilities.

By helping owners and operators modernize across smart access, guest and delivery management, smart home, and connectivity, Latch makes it possible for retrofits to lower operating costs, increase revenue, and create the convenient and flexible experience that residents expect.

If you’re interested in bringing Latch to your building, contact our Sales team today.