JPMorgan Launching Multifamily Management Platform

As a top multifamily lender in the U.S., JPMorgan is drawing from its expertise to make the process of managing apartment buildings more efficient, from both the landlord and tenant perspectives, the bank said. 

“Multifamily is the largest asset class within commercial real estate,” Kurt Stuart, managing director of commercial term lending in the Northeast, told CO. “We are a recognized leader in the space, so we feel like we can offer a unique perspective in the development of a more integrated set of solutions for multifamily owners.” 

While facilitating digital rent payments is page one of the, well, Story, the platform will also provide its clients access to various resources, including economic data, rent data — such as how a property’s rent compares to others in terms of affordability — and general market metrics. It will also help owners with resident screening and property valuation. 

“I think what’s important to understand is, even though multifamily is a significantly larger asset class than some of the other commercial real estate asset classes, it’s highly fragmented within its ownership,” Stuart said. “Because of that fragmentation, the tools that exist today to manage that business — if you’re an owner and operator — are also highly fragmented. They tend to be incongruent, manual in nature, and very time intensive.” 

Indeed, while more than 100 million Americans live in rental properties, paying rent that totals more than $500 billion annually, the majority of property owners and operators still use manual tools to run their businesses — with roughly 78 percent still collecting rent via non-digital payments — according to information from JPMorgan. 

While this segment of the commercial real estate industry may therefore be an obvious candidate for innovation and disruption, there’s a long runway for improvement that’s untouched in many ways, Stuart said. In building Story, JPMorgan utilized a team of professionals composed of developers, designers, data scientists, finance specialists, former entrepreneurs, product managers and engineers to map out solutions while also leveraging the bank’s broader infrastructure. 

Sam Yen, chief innovation officer at JPMorgan Chase, joined the bank from SAP in Silicon Valley in June 2021 and saw plenty of opportunity to improve clients’ business processes through the lens of his technology background from the outset. 

“The first thing that we did was try to figure out what digital transformation meant in this space,” Yen said. “We took the opportunity to talk to some of our clients and, candidly, coming from the tech industry, I was surprised at how little technology was used in order for our clients to run their businesses. We felt that digitizing some of the banking was table stakes, but the bigger opportunity was everything else that they did to really run those businesses from soup to nuts. By providing more data, our clients could make better decisions in terms of where they want to invest, where they should set their rents, or how they benchmark their expenses. We also wanted to offer a platform that provides thought leadership and educational content. 

 “From a fundamental perspective, in terms of our clients’ day-to-day businesses, the rent payment aspect seemed like a no-brainer,” Yen added. “Despite there being more than $500 billion of rental payments in the U.S. annually, the vast majority of those payments are still made in paper checks or cash, which really blew me away. I remember talking to some residents, as we were interviewing them in this development process, and they said, ‘This is the only reason I have a checkbook.’ ” 

While Story’s initial rollout targets owners of smaller multifamily properties, it’s only the tip of the iceberg, Stuart said. 

 “We think that this is applicable to any property owner-operator, but we feel that there’s a tremendous need for the real estate owner-operator that owns, say, between five and 50 units,” Stuart said. “In that segment, the technology support is extremely fragmented. A lot of our clients are using things like Excel and QuickBooks to manage their businesses. But, as we continue to develop and mature Story, we feel that there’s plenty of value to add to even our larger commercial real estate clients.”

And, Story’s launch comes at a volatile market period, when timely data is more important than ever. 

“What do people want during periods of uncertainty? They want information,” Stuart said. “So we’re going to give them more information about their own portfolio. But aside from that, we also have terrific content and data within Story, which will take Moody’s Analytics REIS data and give customers real insights into the market, and what fundamentals look like in various geographies around the country. Wherever they’re located, owner-operators can get very detailed insights into how that market is performing and where it’s going.” 

Story is now in its first chapter, with the digital rent payment solution in beta. JPMorgan plans to offer the platform for general availability starting in 2023.

Cathy Cunningham can be reached at ccunningham@commercialobserver.com