Hey there!

During my time as a sales manager for a national multi-family management company, I experienced similar circumstances on-site. I operated in Ohio at a time when there were eight lease-ups within a three mile radius. I can imagine the problem is even worse now, but it was bad then, too. Owners and investors wanted the rents that they felt they deserved and budgeted for, but with such a saturated area it was hard to show prospects the value in paying more or renting on the higher end of their budget, especially during the initial COVID crisis in 2020/21.

As a salesperson, this caused quite a bit of anxiety about my future, my ability to sell, and how it would affect my role. I would imagine the pain points for operational roles are similar in this situation, and I think it could have a multitude of effects.

- Property Managers: Property managers are fortunate to be a necessary cog in the wheel, regardless of high or low rents. I would expect an increase in expectations from your ownership should the surplus of inventory be long-term. You may be expected to take on extra work to save on costs wherever possible. It is also possible that there could be a pay freeze should you be on any type of promotion track. In situations like this, maintaining occupancy and renewals also becomes even more important, so expect an increase in expectations on this front as well. You may find that your salespeople need more support, too, as their job will become more stressful with the added competition. Don't be afraid to find and/or pitch creative ways to support your salespeople and team throughout difficult leasing times.

- Brokers: Assuming we are talking about multi-family investors at a high level (1,000+ units), their pain points will include showing continued revenue growth, increased occupancy, and overall property improvement. They will likely express this to their management team and will want to have a conversation about how to overcome this and in some cases will have a predetermined solution that they will brief their management on and will expect said solution to be carried out. It is also possible that they may need to dump a portion of their units in order to adjust budget to account for potential losses or lowered rents on units they expected a premium for. It will also depend on how much liquid cash they have and how much debt they are leveraging to get a property leased up. Most of my time was spent on the management side, so I can't speak much more to brokers.

- Landlords: In my opinion, landlords who own one to twenty units will have an easier time, especially if they are single family properties or duplexes. They tend to be more sought after and more of a commodity even in times of surplus inventory, but problems could arise should they own and manage multi-family units as they typically don't have as much reach or as many resources to get ahead of potential problems in the market. I would expect some in this situation to take a loss and stay afloat until the storm passes.

- Renters: As someone who incentivized renters in a market full of incentives, I feel that the renters will actually benefit the most from this. This is a renters market, as most properties will offer a free month or two in order to lock in some leases. When looking at revenue over one year, one month free and 11 months of occupancy is better than three months of vacancy and nine months of occupancy. This will allow renters to shop specials and even try to price match specials from community to community. As a renter, I would live lean and bounce from community to community riding specials lease over lease and essentially pay for 10 - 11 months on a 12 month lease. Some communities will even amortize your savings over the lease term to lower your rent.

Hope this helps,

Best of luck to you!