What’s in store for residential property management teams in 2023? With rising costs, sea levels, regulation, and resident expectations–there's a lot more to handle.
Today, Super's convened a virtual panel of real estate experts to discuss key themes and strategies that real estate and property management teams should be aware of. The expert panelists were moderated by Super's co-founder & CEO, Lindsay Liu.
The discussion centered on the five themes Super has identified in its 2023 Trends Report—the economy, technology, resident expectations, climate change, and regulation. One resounding agreement? That leveraging technology is a critical tool real estate and their management teams should "add to their toolkit." Here are the top highlights from the panel.
"Reduce wasteful spending. Now more than ever, preventative maintenance needs to be taken care of. It's always more cost-effective to do preventative maintenance than it is to wait for emergencies." — Tina Larsson
"Be proactive on the board level. There are some things that are more elective, and there are some projects that are required by the law that you need to undertake. Understand where your building is. Look at your building systems, are you maintaining things, are there warranties, what are the age of the systems so you can forecast. Decisions by board members need to be in the best interest of the building, so as long as it's not self-dealing or self-interest where a board member is benefitting from it, it's going to be protected from the Business Judgement Rule in New York. Proactive measures are going to lead to a better outcome. " — Christopher Tarnok
"With capital being at such a premium right now, at Gensler our most successful clients are beta testing incremental changes. When you do these incremental changes, and you are testing it, you are identifying all of your stakeholders and testing out the changes and measuring the effectiveness of these changes with each stakeholder group. That really allows you to maximize that capital and get the biggest bang for the buck." — Sofia Song
"The way to think about [capital improvements] is: what's the payback period? So, upgrading the light fixtures in the hallways and the basements and putting them on motion sensors typically has a 2-3 year payback period, whereas replacing the windows may have a 10-20 year payback period. What is the most urgent?" — Tina Larsson
Tip for New Yorkers: Starting in 2025, Local Law 134 requires upgrades to lighting systems in buildings greater than 25,000 square feet—including light reduction controls and automatic lighting shutoff (e.g. motion sensors).
"The vast majority of people—about three-quarters of people—say that climate change is an urgent issue that needs to be addressed, but on the flipside, less than 20% of people feel that their community is built to withstand climate change. There's a big disparity. Almost everyone in our study felt they were impacted by extreme weather events. At the building-level, it's all about investing in building improvements that will lead to energy efficiency or repair and re-use." — Sofia Song
"Natural disasters increased cost for everyone. 90% have been impacted by natural weather events—they've had their power disrupted, lost access to internet, to roads, to work, to school. All of this leads to increased insurance costs." — Sofia Song
Tip: Babcock Ranch in Florida is a model for technology-driven resilience. During Hurricane Ian in 2021, this development was the only one that did not lose power or internet because it was built to be sustainable and solar-powered.
"The first period [of Local Law 97] is 2024, which is just around the corner, where they anticipate about 25% of buildings in New York being impacted. In 2030, you may be, when they anticipate about 75% of buildings being impacted. Buildings will have benchmarks they need to meet. They need to submit starting May 1st, 2025 capturing the prior year, certifying what the building emissions were. If it's above the benchmarks, they are going to be hit with penalties and fines. These fines will be costly." — Christopher Tarnok
"If you do not need to comply with Local Law 97 right now, there are still incentives. National Grid and ConEdison have certain criteria. It depends on what kind of heating fuel you use, what types of heating systems you have, etc. But just because you don't have to comply today, I would do my best to start planning as soon as possible. And don't forget, if you retrofit your building, you will start saving money now. There's no reason not to do it." — Tina Larsson
"To summarize, it sounds like you can either pay the fines, or you can put that money towards making upgrades to your building that will help you save money on energy costs." - Lindsay Liu
Tip for Local Law 97: Look up your building address on the NYC Accelerator to show compliance/non-compliance and projected penalties.
"What matters most to home satisfaction? Is it the unit, the building, or the neighborhood? Our analysis found that it's the unit-level element that makes the biggest contribution to feeling satisfied with your residence. When we tested respondents' appetites for a variety of cost-saving solutions, people were most averse to sacrificing those in-unit features and personal space as opposed to building amenities. It turns out that apartment dwellers are highly open to forgoing many building amenities if it means an opportunity to cut costs. Residents place a higher value on these in-unit features and personal space than on common amenity areas." — Sofia Song
"There is a newer generation who really prioritize sustainability. Another thing that they prioritize is communication. There's a lot of communication; they can just hit the button to contact the resident manager. We work primarily with old buildings, and installing amenities for those is very important. Using all the empty basement space for various things that can be installed—gyms, bike storage, extra storage—and to use the roof space. It's valuable real estate." — Tina Larsson
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