Not so long ago, multifamily property managers were responsible for hands-on operations. “Operators were mostly focused on collecting rent and handling issues as they came up,” said Pat Swanson, Stream Realty Partners’ Managing Director.
However, the combination of social media, online reviews, technology and changing renter expectations means that managers and their owners need to beef up the intangibles, one of which is property-level culture.
According to Curtis Holder, director and head of asset management with Excelsa Properties, property-level culture offers a measurable competitive advantage.
Lela Cirjakovic agreed, adding that a well-thought-out culture strategy drives a property’s core metrics, including occupancy and rental rates.
“The focus has expanded from transactions like lease signing and rent payment to focus on the entire resident lifecycle,” added Cirjakovic, who is the managing director, multifamily property management with JLL.
But What is It?
The dictionary definition of culture ranges from the beliefs and customs of a social group to the special activities and features of a particular society.
Moving away from the Merriam-Webster explanation, multifamily owners, managers, and brokers told Connect CRE that property-level culture is shaped by multiple factors, including how well standards are implemented, staff responsiveness and communication, leadership guidance and behavior, and consistent rule enforcement.
Then there is what Patti Higgins calls the lived experience.
“A strong property culture makes a resident feel like they are not just renting a unit, but are at home. Great culture starts with a cohesive team that genuinely enjoys the work and takes pride in the property,” added Higgins, senior vice president at Parktown Living.
Furthermore, property-level culture is intangible—if it’s working, residents aren’t aware of it. Said Holder: “It’s the invisible operating system that determines whether a community simply functions or truly thrives.”
The Difference Between “Thriving” and “Dying”
The experts explained that it’s easy to see the differences between apartment communities that boast a robust culture and those that don’t.
Holder said that a property’s culture is apparent in the metrics, as “a strong culture dries lease renewals north of 55%-60%, reduces turn costs and compresses vacancy loss—all of which flow directly to the NOI.”
Meanwhile, Swanson commented that a well-functioning culture comes from clear expectations, proactive management and consistent execution are the keys to building and maintaining a successful property-level culture.
Higgins went one step further, explaining that a community with an on-site team that genuinely likes what it does signals a healthy culture.
“When you pair that with clear expectations and standards, motivated teams develop accountability to each other and their residents,” she added.
At the opposite end, siloed thinking, reactivity, little to no communication with residents or one another, fragmentation and a lack of authority are signs of a poor culture.
“The culture shifts from serving the renter to just getting through the day,” Cirjakovic said. “Such an environment leads to high employee burnout, constant turnover, and an impersonal customer experience.”
Improving Property-Level Culture
The experts agreed that the most useful tool for implementing and maintaining an effective, sustainable property-level culture is consistency.
“Set clear standards for leasing, maintenance and communication, hire people who take ownership and track a few key metrics,” Swanson advised.
For example, all properties should respond to leads within the same time frame, complete work orders within a specific period, and ensure a structured, renewable process.
“At the same time, investing in the right upgrades can improve the resident experience across the portfolio,” Swanson added.
While stability and standardization are essential, there should be room for on-site staff to develop their communities’ unique personality. Higgins said that Park Living’s teams develop and implement ideas that cater to their specific residents. “One property hosted a build-your-own bouquet event for Valentine’s Day, and another brought residents together for a paint-a-rock balcony garden social,” she commented.
Excelsa oversees a monthly cross-property “wins and lessons ” call. “This is where teams share what’s working, which builds peer accountability and what spreads best practices organically, instead of top-down,” according to Holder.
But don’t discount the “top-down” impact
“Communities with effective cultures are defined by strong and present on-site leadership that builds a foundation of mutual respect,” Cirjakovic said. The leader should ensure that staff members understand their values and work to serve residents and each other, she added.
Creating those proactive and effective team members requires training; doing so “builds competence and confidence,” Higgins said.
Culture Allies With Performance
Culture is more than a feel-good addition. It aids asset operations and profitability.
“Property-level culture directly impacts performance and value,” Swanson said. “It often shows up before financial issues arise, making it a leading indicator of property performance.”
Holder explained that culture should be more than a single budget line item and embedded throughout a P&L.
Additionally, “your on-site property managers should treat that property like it’s their own,” he added. “When they carry that mindset, every decision they make reflects it, and the residents and bottom line feel the difference.”
An earlier version of this story was published on ApartmentBuildings.com.
The post Why Property-Level Culture is Multifamily’s Competitive Edge appeared first on Connect CRE.