What happens when a global pandemic makes in-person interactions incredibly difficult – especially in an industry built on personal relationships and networking?
Everyone pivots. While technologies that facilitate virtual building tours, video meetings and document signing existed pre-pandemic, widespread adoption was more of a dream than a reality.
Now, making deals and supporting clients in Canada’s rental apartment building market requires more than just brokering skills. Tech tools, along with the buildings, network of clients and asset class itself, are transforming more quickly than ever.
It’s not unusual for a massive tech-friendly institutional buyer to line up for a deal with a family business led by the older, potentially less tech-savvy generation. When it comes to technology, it’s not always a level playing field and it’s increasingly up to service providers like Colliers to smooth out those challenges to meet the needs of everyone.
Digital revolution absorbs multifamily market
The multifamily market has seen a shift in the past few years when it comes to digitization. Although this transformation has been slower compared to other classes such as retail and office, new tools have emerged that are advancing the industry and creating new opportunities for growth. The wide-scale shift to remote work has accelerated this process, while allowing business to continue moving forward.
With more private investors and well-funded groups entering the multifamily market, the business has become much more diverse, resulting in a significant increase in the amount of potential leads and data to track, and the need for systems in place to do so.
New investors and institutions entering the market also present a unique situation where potential buyers are used to working with digital tools; however, many of the sellers have owned their asset for decades and are not always familiar with the tools or ecosystems within which they’re being asked to operate. Many of these owners prefer to conduct business in person — which emerged as a major challenge during the pandemic.
Part of our job as advisors is bridging this gap between owners and investors, fostering comfort with tools like DocuSign, Zoom or Teams calls, or viewing a virtual reality building tour on their device of choice. We can do this by working with the client and helping them navigate the process but also making sure everyone on the buying side is equipped with the electronic data and documents required to complete the transactions.
Technology expands the market and creates more ‘value’ opportunities
One of the largest impacts technology has had on the multifamily market is creating the opportunity to reach a wider network of buyers. Through the use of video production, digital interactive brochures, custom property websites, Sharefile software and digital confidential information memoranda, potential buyers can view properties and process transactions without setting foot in the building.
This has led to an increase in out-of-province deal-making, a trend that is expected to continue as borders reopen and investors become more accustomed to viewing properties virtually.
For instance, we're working on an off-market deal worth more than $50 million on the West Side of Toronto – an out-of-province buyer has not visited, and likely won't visit, the building before closing the deal.
Deals like this will become increasingly achievable if we embrace digital tools, but they will also require developing and maintaining a deep roster of advisors, property managers, lenders and other partners to help facilitate due diligence and protect buyers' interests.
Our services were already primed for remote working success prior to the pandemic. In recent years, customer relationship management systems have allowed us to stay on top of market activity, as well as connect asset owners with more buyers by creating a seamless process for building and maintaining relationships.
In addition, tools such as HTML delivery services provide greater access to the market while helping us focus on the most interested buyers by allowing us to see how many times they have clicked on a listing. We’re now in a position to ramp up our remote or digital services, while helping our clients access and understand these tools to keep the deal-making process accessible, smooth and potentially easier than ever.
Technology is also being used to increase efficiency and sustainability and reduce expenses when it comes to improving buildings and operations. Upgrades such as LED lighting, smart locks and tools for more efficient data management are examples of how multifamily assets are modernizing and becoming more sustainable using technology. At Colliers, we are working with local service providers to create value for what was previously a static marketplace, optimizing revenues by streamlining expenses.
Let’s not leave ‘analog’ business sense behind
While technology has been a game-changer for increasing efficiencies and providing new opportunities, one thing it cannot replace is the value of building personal relationships. Multifamily has always been a people-centric business built on fostering trust and connections. These relationships still lead to word-of-mouth networking and new business, an interaction that can be made easier through tech tools.
As the market continues to evolve, the use of digital systems and technology is expected to continue and become more mainstream for buyers, sellers and advisors. This brings the opportunity to leverage technology in tandem with strong relationships to create opportunities for growth.
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