Maximizing Amenity Revenue Requires a Deep Dive Into The Data

Multifamily owners should be taking a deep and regular dive into data regarding amenity usage to ensure they’re keeping up with tenant desires if they seek to maximize monetization of those amenities.

“You decided on something a year ago in terms of an amenity. Well, now we pull the data and see how often that amenity is being used,” said Lee Miller, Senior Director of Multifamily at Brivo, a pioneer of cloud-based access control systems. “We can tell you that that gym is being used 52 times a day, but a clubhouse or common space is being used five times a day. It allows properties to make decisions about when they have to shift.”

During the virtual custom event, “Revenue Generation Unleashed: Effectively Monetizing Your Multifamily Amenities,”  which was hosted by Commercial Observer Partner Insights and presented by Brivo, the importance of fully understanding amenity usage and a willingness to change to reflect current tenant demands was a key issue discussed by K. David Meit, founder and principal at Oculus Realty LLC, Josh Freed, founder and CEO at Proximity, and Miller. Commercial Observer Head Content Writer Larry Getlen moderated the discussion.

Freed said that owners should delve deep into not just how often an amenity was being used, but by whom, differentiating between power users and occasional users to determine how many tenants are really deriving value from the amenity.

“Without enough data, we’re going to make decisions based on how we feel when we walk into that space that we own,” said Freed. “So I walked into my gym and it looked pretty active. That’s great. But if I dive into the data and see it’s the same 15 or 30 people using it, then I’ve got a problem, because I have a utilization issue. I want to make sure I’m getting the highest amount of usage for that asset.”

Freed noted that even then, more information is needed to determine whether it’s an amenity that simply isn’t sought after, or if it’s improperly designed for the nature of tenants’ needs.

Miller notes that Brivo’s cloud access system allows for this type of data differentiation.

“When owners give a resident a key that gives them access to all the amenities, I don’t know if David, for example, is using that workspace three times a week or a couple times a day,” said Miller. “When you have a cloud access system like Brivo, now I can see that David’s using it once in the morning, once in the afternoon, three days a week. He’s actually tied to those credentials, and to his mobile access. That’s the big shift we’re seeing. Property owners want to shift over to cloud access because not only are we bringing that data, but we’re bringing specific data rather than just saying, ‘We’re seeing a head in that space 10 times a day.’”

But Meit notes that in addition to sophisticated data systems, owners should also maintain a hands-on sense of what’s being used at their own property, within their community at large, and by their competitors.

“The best property managers manage by walking around,” said Meit. “That doesn’t mean just being at your property, but also being very aware of what your market and submarkets look like. Go walk everybody else’s property. The idea is to know what is going on out there, what is available, and staying up with trends.”

To optimize monetization, Miller notes that the importance of a social amenity like a gym or a clubhouse often derives not only from the general desirability of the asset, but also from the social connections these assets help foster.

“You want to make sure that tenants are going to the pool or hanging out in that common workspace and using the really expensive Starbucks machine, because you want them interacting with other residents and becoming friends,” said Miller. “Because when it’s time for them to renew their leases, more than likely they’re going to renew because they have two or three friends on site and catch up for coffee a couple times a week.”

Miller also said that owners are taking further steps in this direction by making amenities such as clubhouses or golf simulators available for rent, allowing tenants to bring in friends from outside the property and thus enhancing the amenity’s social value.

Another amenity category checking off all the boxes for tenant desirability and enhancing social connection are amenities related to pets.

“I’ve been to some properties where the dog spa was nicer than most spas I’ve been to,” said Meit. “Dog runs and pet wash areas and platforms like Bark Buildings, which provides virtual veterinary assistance to our residents – amenities like these have really resonated. And this all creates a tremendous amount of community.”

The panelists agreed that determining the best, most monitizable amenities for an owner’s specific tenant base requires open-mindedness, creativity, and a willingness to adapt.

“If you’re managing a legacy property, take a look at the spaces you have,” said Meit. “We’re in the business of renting space, right? So you can take a small closet-like space and you can make a podcast room, or a music room, or a Zoom room.”

Meit also cautions, however, that increased social amenities that lead to greater public access need to be considered in terms of their potential liability issues in addition to their potential for increased ROI.

“I do a lot of standard of care in property management expert witness work, and dealing with these kind of possible litigation, premises liability issues is extremely important, especially in today’s world,” said Meit. “When we have spaces that are available to the public, we ensure that we’re documenting and we’re signing use agreements. As an operator, I’m always cognizant of, do I open [a space] up and have the return on investment, against the liability of, God forbid something should happen with somebody on my site that I don’t have a lease or a contract with that manages that relationship.”