Savvy apartment owners have already dropped rents to prop up leasing activity during stay-at-home orders. Trio Properties, a Los Angeles-based multifamily owner and developer, lowered rents 5% to 8% in late March to get ahead of the situation and competition. As a result, it has seen an increase in leasing activity and move-ins during the pandemic.
“We have signed a ton of new leases and we have had a ton of new move-ins,” Max Sharkansky, principal of Trion Properties, tells GlobeSt.com. “We adjusted rents down a little bit and added some concessions. We really got ahead of it. We started that program in mid- to late-March, and we got ahead of a lot of our competitors that just were not moving on rents. We were tracking rent trends daily, and a lot of our competitors just staying on their path. When we reduced rents, we saw a huge spike in leasing activity.”
The strong leasing activity also came with a dramatic increase in inquiries. Overall, the developer’s rate of leases per inquiry fell, although the overall goal of driving leasing activity was achieved. “We had a huge spike in calls and virtual tours, but the conversion to signed leases was a lot lower,” says Sharkansky. “It didn’t matter because we were still able to process all of those applications and leases.”
The leasing activity was stronger than Trion expected. “I was surprised to see the activity at the level that it came in, but people have to move. Whether it is for money or a new job or another reason, people have to move,” says Sharkansky. “We have had move-outs as well as move-ins.”
Trion also pivoted quickly to offer virtual tours. This accounted for nearly all completed lease deals. “We did almost all video calls and some self-guided tours, where the leasing manager would leave the door unlocked and give instructions on how to tour,” says Sharkansky. However, he doesn’t expect virtual tours to be a permanent change after the pandemic. “I doubt it will be more than 5% to 10% of tours. People still like to feel and touch,” he adds.
Overall, Trion is having a great month. In addition to strong leasing activity, the developer also had healthy rent collections. “May rent collections were pretty much on par with April,” says Sharkansky. “For us, it was even an eyelash ahead of April. I think that people got their stimulus and unemployment money. Paying back April rent payment plan.”
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