There are no two ways around it: property owners are in the middle of an amenity race.
I recently asked a friend who’s moving into a luxury building in Chicago what attracted him to the space. He could barely contain his excitement. “They have one of those golf machines,” he said with a huge smile. “It’s like your own personal Top Golf at home.” Perplexed, I responded, “Justin, do you even golf?” “No… not really,” he admitted.
Justin’s experience is a prime example of how the great amenity race has reached its peak. From golf simulators to bowling alleys to enough Peloton Bikes to fill a spin class, owners supply it all to get that visceral “wow” from prospective and future tenants. And they almost always do. As more and more renters sign on the dotted line, owners are encouraged to recommit to the amenity race for every new building.
To be honest, I completely understand the instinct to provide the flashiest amenities. Prospects respond positively and renters love to brag about their new buildings. Still, every reward comes with a risk. Amenities aren’t exempt from shifts in consumer preferences. Think of how many treadmills and other cardio equipment you’ve seen outfitted with an iPod dock. Now, think about how many times you’ve actually used that dock. Developers went all-in on integrated media systems, and then Bluetooth came along and made them obsolete overnight.
iPod- ready treadmills aren’t the first example of an amenity investment becoming irrelevant upon a building’s launch, and it certainly won’t be the last.
Even amenities with staying power go underutilized. Those eager nods in response to a 6 AM spin class or the Fall mixer become nothing more than wishful thinking over time. I’ve toured countless buildings with panoramic roof decks and lavish pools with no loungers or swimmers in site.
By now, it should be clear that even tried-and-true amenities require a critical eye long before a capital investment comes into the picture. Below are my best practices in amenity investments to increase the value of your amenities and your buildings:
1. Program for a future of mixed-use hospitality
Consider programming your buildings to maximize the number of stakeholders who can utilize your amenity spaces. Today, most multi-family buildings have one consumer: the renter. Tomorrow, buildings across the country will also cater to hotel guests, members and shoppers. The best amenities will be flexible enough to accommodate these unique sets of wants and needs.
For example, hotel guests are not as likely to reserve a screening room as they would be to utilize a shared workspace. Tired shoppers browsing the various food and beverage options in your property are likely to want lounges where they can consume their cold brews in peace. You could see fitness members who need locker rooms to store their personal items and shower before or after work. Residents will always want exclusive amenities that are only accessible to long-term lessees: think private sections for fitness, unique roof deck quarters, reservable party rooms, and more.
Mapping out these distinct and varying considerations of your buildings’ potential consumers will allow you to effectively review the applicability of your offerings to each group, and thus optimize their usage rates.
2. Access control is the key to amenity utilization
Even the most thoughtfully designed amenity spaces face utilization issues. Residents like Justin are wooed by the siren song of the golf simulator when they sign a lease, but they don’t even own a golf club. However, in a diversified building environment like the one I touched on above, we still have to think about the non-residents who may be the next Brooks Koepka in training. Making these niche amenities accessible with defined access parameters will allow golf enthusiasts to pay to hit balls in the simulator, generating ancillary revenue for the building. It will also allow property owners to have a top-down view of who has access to these amenities.
A golf simulator is just the tip of the iceberg. Thinking about any future amenity with an access control plan in mind will allow you to appeal to a much wider segment of potential customers, which can have a big impact on future revenue.
3. Note the amenities that truly matter
Sure, bowling alleys positively impact rent acquisition. “And here’s our private bowling alley” is easily on the all-time top-10 list of humble property brags.
But how do they play into rent retention? Is a resident going to renew for an amenity that they hardly ever use?
I believe that the most impactful building investments are engaging digital services. The resident who has an amazing digital experience via an all-in-one application is going to think twice about moving to a building that doesn’t offer those conveniences. What if that tech is so engaging that she re-visits the app multiple times a day for core renter services and hospitality offerings? Can she live without that digital amenity?
Digital amenities are the new frontier because they update in real time. They’re flexible enough to capture new, popular services and sunset outdated ones. Reach out to Livly to discuss partnering on a digital experience for your buildings.
Regardless of trends and preferences, developers will continue to spend on newer, bigger and shinier and amenities. Some of these investments will be fads; others will help drive new residents and renewals. Before committing to big expenses, utilize these best practices to stay ahead of the curve.