Persistent supply chain delays and labor shortages are strangling apartment construction timelines.<\/p>\n
In February, the apartment completion rate fell to the lowest level since 2016, according to RealPage<\/a>. The number of authorized but not-yet-started projects rose 31% year-over-year in March<\/a>.<\/p>\n These delays create backlogs, headaches and cost overruns for contractors and developers.<\/p>\n But another group in the apartment ecosystem, third-party managers, also faces challenges. When supply chain backups and labor shortages derail project openings, it becomes a big issue for the management firms hired to operate these new properties. To pre-lease apartments and allay resident concerns, these operators are turning to technology and communication.<\/p>\n Vanessa Siebern, a senior vice president of Folsom, California-based FPI Management, the fifth largest apartment manager in the country<\/a>, knows the impact of construction slowdowns. At one large project in Chico, California, appliances were \u201csignificantly delayed,\u201d according to Siebern.\u00a0<\/p>\n \u201cWe can’t move people into units that don’t have appliances,\u201d Siebern said. \u201cWe’re probably about 40 units behind just because we can’t deliver the units \u2014 they’re not ready.\u201d<\/p>\n Luanne McNulty, a senior vice president at Orlando, Florida-based property operator ZRS Management, the No. 27 manager in the country, can relate. The firm dealt with a project that was delayed by four months because of issues with windows. \u201cIf you can’t put windows in, it just snowballs and they can’t finish,\u201d she said.\u00a0<\/p>\n In some cases, developers are improvising. Companies such as Ft. Mitchell, Kentucky-based Drees Homes<\/a> have been going through channels to source the products they need. \u201cThe developer or the construction team is running down the street to a Home Depot or a big box retailer to buy appliances because the bulk order isn’t coming,\u201d McNulty said. \u201cThey don’t want to delay more.\u201d\u00a0<\/p>\n But sometimes this improvisation can lead to higher costs for managers. At another project, McNulty said the construction team told her that she would need to budget for higher paint replacement costs. Why? Supply shortages forced the contractor to use five different paint manufacturers.<\/p>\n \u201cThey’re saying: \u2018Because we had to use so many different paint manufacturers, you’re never going to be able to use touch-up paint. You’ll be doing full paints on everything,\u2019\u201d McNulty said.<\/p>\n When a developer or contractor can\u2019t source products or there is a major delay, it inevitably affects the resident. For property operators, managing this disappointment starts with being open.\u00a0<\/p>\n \u201cOur general rule of thumb is always being as transparent as we can and giving the prospects as much advance notice as possible,\u201d McNulty said.<\/p>\n Generally, residents haven\u2019t been too upset about encountering delays, according to McNulty. \u201cIt’s really been pretty refreshing,\u201d she said.\u00a0<\/p>\n Credit media coverage for these understanding attitudes. \u201cThere has been so much national news about supply chain issues,\u201d McNulty said. \u201cPeople are really more understanding than you would have ever thought they would be. That’s one place where the media sort of helps out. It conditions people to expect delays.\u201d<\/p>\n Charlotte, North Carolina-based apartment operator RKW Residential is managing a project in Miami that was slated to be ready in January, but that opening has been pushed to May. RKW president Marcie Williams says the company normally brings the leasing team on site about 30 days before the opening. Fortunately, technologies like virtual leasing can help fill the gaps when a building isn\u2019t ready for tours.\u00a0<\/p>\n \u201cIf a project is delayed, as a management company, we can pre-lease harder and be able to create video tours of the units that are available,\u201d Williams said.<\/p>\n Ultimately, the managers that will successfully navigate supply chain delays are the ones that are most flexible.\u00a0\u00a0<\/p>\n \u201cIt’s really just about managing around those supply chain issues instead of being defeated by them,\u201d Williams said.<\/p>\n Click <\/em>here<\/em><\/a> to sign up to receive multifamily and apartment news like this article in your inbox every weekday.<\/em><\/p>\n This item was originally posted here: Read More<\/a><\/p>","protected":false},"excerpt":{"rendered":"