What's ahead for the 2023 summer leasing season?
It's the time of the year when most apartment communities experience more leasing activity and turnover. U-haul vans are always coming and going.
Everyone understands the importance of winning peak leasing season.
However, the stakes in 2023 are higher than ever.
Jay Parsons, a multifamily economist (and must-follow on LinkedIn), sums it up with this: "The bigger challenge awaits in the second half of 2023 when (new apartment) completions ascend to the highest level since the 1980s."
Parsons says in another post, "The 1st quarter numbers are in line with our forecast that demand would improve in 2023, but what really matters for apartment operators is what happens in the spring and summer months. That's the traditionally busy leasing season, and with so much new supply on the way this year, these upcoming months are critical for apartment owners and managers."
More supply = more competition for leases.
I asked Parsons how competitive this year's summer leasing season would be for all asset classes, given the oncoming increase in supply on its way. "Very (competitive) for class A and lease-ups,” he responded. “Less so for B and C unless the job market tanks."
I wrote recently about the explosion of apartment construction projects in RentVision's home city of Lincoln, Nebraska. It's just one example of what will soon occur in many markets across the United States.
Carl Whitaker from RealPage shared another example of a massive increase in supply taking place in the West Loop area of Chicago:
What does more competition mean for multifamily marketers, operators, and owners?
You need to be looking beyond just 'winning this peak leasing season' but instead toward preventing your communities from falling behind.
If you cannot attain or sustain occupancy targets heading into winter, the brunt of the impact won't just be having to increase marketing efforts or apply more rent concessions during a period where less leasing activity is typical. No, the effect of falling behind the competition during this peak leasing season may have long-lasting effects on your communities profitability.
That's what's at stake in 2023. Specifically, from a marketing perspective, you need to consider how you're capturing prospects' attention and keeping your apartments competitive—both now in peak leasing season and, more importantly, as more properties open in your marketplace.
Set your apartments up for sustainable success.
It would be best if you were doing these three things now—amid the busy leasing season—to set your communities up for sustainable success.
1. Invest in marketing.
Truthfully, the worst thing to do in these circumstances is to maintain the status quo with your marketing—especially with your spending. Static marketing techniques, where you spend the same amount or do the same thing year-round, regardless of demand, will be detrimental to portfolio performance during peak leasing season and in the future, when more competition will occur.
Unfortunately, many apartment communities continue to stand pat regarding marketing, assuming that their historical approaches for the busy leasing season will bear fruit as in years past. But that will not work this summer, especially with the oncoming increase in supply and competition.
Your best defense is to go on offense regarding your apartments' digital marketing strategies. More renters than ever are paying close attention to your communities' online presentation. You can rise above the competition by making it easy for future renters to see and learn everything they need to know to lease confidently.
Investing your community's online presentation and visibility, including your digital advertising and website, is essential in attracting future renters. This dynamic apartment marketing approach ensures you're using your resources to generate demand according to your community's needs, which in instances like peak leasing season, enables you to drive up demand. The most beneficial action you could take in this season is to increase your budgets on your digital ads to get your apartments in front of more prospects now.
2. Study website performance.
Your website's performance is most impactful during periods of peak leasing because it's where your most qualified prospective renters convert.
First, study the historical traffic to your community website and how that correlates to conversions (leads or leases). This will help you determine whether or not you’re currently getting enough web traffic to account for the increased supply that you’ll experience over the summer. If it looks like you’ll be behind, be prepared to increase advertising spend across channels and throughout the leasing funnel.
Second, study how visitors engage with your apartments' website. If visitors leave the website often (and quickly) without converting, then either your website needs to be more engaging or your paid sources need to produce better qualified web traffic. If you’re using a vendor to help generate traffic, bring these issues to their attention to make sure they’re sending qualified web traffic (or get your money back!).
Taking the time to study your website performance is critical to evaluating your marketing. You have to know today if your marketing is in a position to prevent vacancy heading into the winter months. And that mission is more important considering that your marketing plan isn't just working to ensure this upcoming winter will be stress-free, but that the next few years will be more stable.
3. Optimize leasing agent performance.
Marketing is only as effective as your leasing agents. They need to answer the phone. They need to be great at giving tours. They must promote a customer-centric environment that delights prospective (and current) renters. All of those things must go hand-in-hand with your marketing strategy and, more consequently, make your community a competitive option. Renters should feel that they'll have a better living experience in your community than the other property nearby.
Study leasing agent performance, train them on the essentials, seriously consider having them on site (because centralized leasing isn't the best tactic for every community), and give them the tools they need to serve. A great leasing staff at your apartment community is a potential differentiator that will be crucial as you advance.