Resi sident I Insi sights f s from the NMHC/ C/Ki Kingsley R Renter Preferences R Repor eport Andrew White RE Tech Advisors @ApartmentWire #OPTECH18
Outline • Analysis Description • Features vs. Amenities • Key Findings • Moderated Q&A @ApartmentWire #OPTECH18
Analysis • Descriptive Analysis • Interest, necessity, willingness to pay • Factor Analysis • Groups the features and amenities into categories driven by latent ‘factors’ • Cluster Analysis • Market segmentation based on renters’ stated behaviors and preferences @ApartmentWire #OPTECH18
Fea eatur ures es vs. Ameni enities es @ApartmentWire #OPTECH18
Key Findings 1. Length of stay 2. Qualifying factors & Winning factors 3. Sustainability Story 4. Demographics of Resident Clusters @ApartmentWire #OPTECH18
1. Length of Stay Who is staying, and for how long? @ApartmentWire #OPTECH18
Length of Stay @ApartmentWire #OPTECH18
Planned Length of Stay @ApartmentWire #OPTECH18
2. Qualifying Factors & Winning Factors What do residents need ? What do they want? @ApartmentWire #OPTECH18
Renter Interest • Qualifying factors : apartment features or community amenities that renters are universally interested in. • Winning factors : features and amenities above and beyond the qualifying factors that allow properties to establish a comparative advantage and set themselves apart. @ApartmentWire #OPTECH18
Qualifying Factors: Apartment Features Non-negotiable Critical Soundproof walls Extremely Desirable Air conditioning Garbage disposal High speed internet Washer/dryer in unit Patio/balcony access Dishwasher Walk-in closet ENERGY STAR Certified appliances Stove hood Refrigerator with water/ice dispenser @ApartmentWire #OPTECH18
Winning Factors: Apartment Features Technology Design Appliances • TV wall mount • Walk-in closet • Stand alone shower (no tub) • Built-in sound system • Modular closet system • High-efficiency toilets • In-wall USB ports • Two master suites • Stove hood • Smart thermostats • Patio or balcony • Microwave • Smart locks • High ceilings • Gas stove • Smart lighting • Hardwood floors • Garbage disposal • High speed internet access • Kitchen Island • ENERGY STAR Certified appliances • Pre-installed wifi in apartment • Air conditioning • Dishwasher • Non-key secure access • Soundproof walls • Fridge with water/ice dispenser • Video doorbell • Alarm system @ApartmentWire #OPTECH18
Qualifying Factors: Community Amenities Non-negotiable Critical Reliable cell Extremely Desirable reception Secure resident parking Swimming pool Secure amenity Fitness center access @ApartmentWire #OPTECH18
Winning Factors: Community Amenities Security/Outdoor Activity Business/Transportation Pet Services • Secure resident parking • Shared office space • Pet walking service • Secure visitor parking • Private office space • Pet daycare service • Reliable cell reception • Conference room meeting space • Dog treats in lobby • Sustainability/green initiatives • On-site car wash • Community pet washing station • Sustainability/green certifications • Electric car-charging station • Community dog park • Table tennis • Car sharing • Swimming pool • Bike sharing • Rooftop space • Bike maintenance/repair area • Playground • Common area barbecue grills • Basketball court @ApartmentWire #OPTECH18
3. Sustainability Story Are residents sharing their opinion on shared value? @ApartmentWire #OPTECH18
Sustainability Story • High interest + low willingness to pay = sustainability expectations • Renters in Class C properties show more willingness to pay for sustainability other property classes • Separating sustainability from survey noise is a challenge • Sustainability continues to become the norm • Resident awareness may not match execution @ApartmentWire #OPTECH18
Sustainability Features in Class C Properties • ENERGY STAR Certified Willingness to Pay for Sustainability Features $60 Appliances $52 $43 $43 • Smart thermostats $40 • Smart lighting • High-efficiency toilets $20 $0 Class A Class B Class C @ApartmentWire #OPTECH18
Sustainability Amenities in Class C Properties • Recycling Willingness to Pay for Sustainability Amenities • Organic waste composting $60 • Sustainability/green $42 initiatives $36 $36 $40 • Sustainability/green certifications $20 • On-site renewable energy • Electric car-charging $0 station Class A Class B Class C • Non-smoking building @ApartmentWire #OPTECH18
4. Demographics of Resident Clusters Who is your renter and what are they willing to pay for? @ApartmentWire #OPTECH18
Cluster Analysis: Apartment Features • Seekers : willing to pay a high amount for any feature or amenity • Evaluators : willing to pay a high amount for a select group of specific features or amenities • Not all evaluators are willing to pay for the same features or amenities • Value Renters : not willing to pay for additional features @ApartmentWire #OPTECH18
Cluster Analysis: Apartment Features $100 $80 $60 $40 $20 $0 Seekers Evaluators Value Renters @ApartmentWire #OPTECH18
Who are they? - Seekers Age Comparison: Seekers vs. All Respondents 60% 53% 53% 50% 36% 40% 32% 30% 20% 15% 10% 10% 0% <35 35-54 55+ Seekers All Respondents @ApartmentWire #OPTECH18
Who are they? - Seekers Seekers’ Monthly Rent Seekers’ Annual Income >$150,000 3% $2200+ 15% <$1000 $75,001-$150,000 23% 29% <$50,000 $1601-$2200 48% 17% $1001-$1600 $50,001-$75,000 45% 20% @ApartmentWire #OPTECH18
Who are they? - Evaluators Age Comparison: Evaluators vs. All Respondents 70% 62% 60% 53% 50% 40% 32% 30% 30% 20% 15% 8% 10% 0% <35 35-54 55+ Evaluators All Respondents @ApartmentWire #OPTECH18
Who are they? - Evaluators Evaluators’ Annual Income Evaluators’ Monthly Rent >$150,000 $2200+ 9% <$1000 16% 22% <$50,000 38% $75,001- $1601-$2200 $150,000 15% 30% $50,001-$75,000 $1001-$1600 23% 47% @ApartmentWire #OPTECH18
Who are they? – Value Renters Age Comparison: Value Renters vs. All Respondents 70% 64% 60% 53% 50% 40% 32% 31% 30% 20% 15% 6% 10% 0% <35 35-54 55+ Value Renters All Respondents @ApartmentWire #OPTECH18
Who are they? - Value Renters Value Renters’ Monthly Rent Value Renters’ Annual Income $2200+ >$150,000 12% 6% <$1000 27% $75,001-$150,000 $1601-$2200 27% <$50,000 18% 44% $50,001-$75,000 $1001-$1600 23% 43% @ApartmentWire #OPTECH18
Moderated Q&A and Discussion Questions? Andrew White: awhite@retechadvisors.com @ApartmentWire #OPTECH18
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