On this episode of Deconstructed: The Future of CRE podcast, Nancy Gaudet, SVP at Corcoran Management Company, joins host Vivek Kartha to talk about her company’s exclusive focus on the Northeastern US, how Covid has affected her business and the industry as a whole, and what the hot amenities are in today’s rental market.
Longevity and Roots
Corcoran Management Company was founded in 1951, meaning it’s been continuously operating for more than 70 years. It develops and manages its own real estate portfolio, and it manages properties for third-party institutions, like insurance companies. It currently has 76 properties and over 12,000 units under management.
The company operates where it was founded, in New England, focusing mostly on New Hampshire, Massachusetts, and Rhode Island. It expanded in the past to Tennessee, Georgia, and Florida, but it pulled back to focus on being the big player in New England.
The Covid Effect
The property management industry was affected by the pandemic in ways that long-time professionals like Nancy never dreamed possible. She is seeing more vacancy issues in the larger cities, like Boston, where everything was shut down. The suburban areas haven’t been hit as hard, and occupancy rates are steady.
This is putting potential renters in the driver’s seat, and Nancy and her team have been creative in coming up with ways to stay on top of such a competitive market. Renters want amenities that resemble a luxury resort experience. Corcoran has added amenities like fire pits, gas grills, outdoor recreation areas, and cabanas by the pool.
With more people than ever working from home, many people who previously were gone too much of the time to have a pet, have now adopted an animal. This means incorporating dog wash stations and dog parks into their amenity package. They have also reconfigured many of their community rooms, installing work pods for people who can’t work in their apartment or just need a change of scenery for a while.
Nancy and her team don’t have a secret method for deciding what amenities to offer; they talk to current renters and prospects and ask them what they want. For example, billiards is coming back into fashion these days so they’ve added pool tables. Also, more people are driving electric cars, so on-site charging stations are important to them.
Another major change is the rise in online shopping and the need for package management. Package lockers became too small so now many of their properties have package rooms. And they’re not finished innovating, they’re continuously looking for improvements in package management. In properties where they have a concierge, much of their time is spent managing deliveries.
Permanent Changes
As the pandemic eases its grip on the industry, Nancy is seeing changes in the way they do business that may never go back to the old way. She says it has always been important in property management to not get stuck in your ways, you have to be able to pivot at a moment’s notice.
She gives the example of video calls. She had literally never heard of Zoom before the pandemic hit. But when prospects suddenly weren’t comfortable being shown units in person, they had to either quickly adapt or shut down the offices, which wasn’t an option.
Now, they regularly show units by any method the prospect is comfortable with, whether it is a video call, a self-guided showing, or texting them photos of the property. Nancy says that in her 30 years in the property management industry, she never thought she would see the day when they didn’t show properties in person. That personal connection and rapport is what has been responsible for their success. But when times change as they have, you have to change with them or you’ll get left behind.
Much like asking tenants what amenities they expect, Nancy has taken the same approach to guide her decisions on moving traditional in-person transactions online. She readily admits she’s not the most tech-savvy person on the team, so she leaned on some younger team members who may be more comfortable with technology to determine best practices for remote processes. The result is more online leasing than they have ever done and a rise in prospects renting units without ever physically setting foot inside.
Dynamic Pricing
Technology has also allowed Nancy and her team to switch to a dynamic pricing model, which is becoming more popular industry-wide. By looking at their pricing daily, they have increased revenue and decreased vacancy rates.
The pricing is driven by supply and demand. The data used is vacancy rates on their properties, competitor vacancy rates, unit types, and what units have leases that will be expiring soon. This data is analyzed in a way that allows them to have the ideal rent price for the moment based on real-time information. Nancy’s director of marketing can use the tool on all 76 of their properties to maximize efficiency on a daily basis.
Eviction Moratorium
Another change Nancy never thought she would see in her career was the eviction moratorium. Like many industry professionals, she was apprehensive about it when it was first announced. Nobody in the industry knew exactly how it was going to play out.
What she has seen is that most people are paying their rent, and they have been proactive to educate the people who are struggling. She and her team educated themselves on all the rental assistance programs that are available. If someone says they can’t pay their rent, Nancy’s team helps them navigate through those programs to get rental assistance. Corcoran has collected over half a million dollars in rental assistance for their tenants who may be struggling.
The Changing Industry
Nancy has been with Corcoran for over thirty years, coming into property management after a brief career in higher education. Traditionally, there haven’t been many women in senior leadership positions and she is excited to see that is changing.
She encourages young professionals, especially women, to consider a career in property management. As she says, “No one ever says ‘I think I want to be a property manager.’” But her experience has been exciting, rewarding, and educational.
Every day is different. That’s what makes it exciting.
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