Inflation has leveled off, rent growth has flattened; new markets have bloomed, some have been reinvigorated; operational processes have faced attrition, others have blossomed into ones that now include only technology with little to no paper trail. The rental housing industry continues to be in flux from year to year with peaks and valleys of stability—new innovations are being added almost daily to help onsite teams, maintenance employees, regional managers, executive leaders and nearly every person and place in between as operational effectiveness and efficiency is key in the fast-moving environment of 2025.
Included in these effective and efficient actions are the use and increased use of artificial intelligence (AI) and other SaaS products to enhance operations; innovative strategies to combat increased and rising operational expenses; and insights and trends within development and transaction activity.
Each piece affects the overall operations of the company, and when working together, offers the ability to smoothly serve staff, residents and others in the multifamily housing ecosystem. Each year, these factors shift one way or the other, importance leaning more toward reducing materials costs or expanding the company footprint or implementing new processes—the impacts are limitless and do fluctuate annually.
In the “Emerging Trends in Real Estate 2025” report from PwC and the Urban Land Institute, supply and apartment deliveries and higher insurance costs are major factors heading into the new year.
Meanwhile, Moody’s Analytics cites wage and household formation growth and low homeownership rates as demand drivers in multifamily housing as well as a slight decline in year-over-year rent growth in Q3 2024. However, effective rents are up 20% since Q4 2019.
These are insights into how rental housing industry leaders are working through challenges and finding solutions to similar problems to outlast external factors that are impacting residents, employees and the industry.
Centralization
Some companies have transitioned from man to zone coverage regarding community management and maintenance, i.e., having staff oversee or work at multiple properties instead of working at one community front leasing office or clubhouse. Other administrative functions are also becoming more successful by centralizing business entities to one location, e.g., all accounting functions for an entire company happen at one, centralized location rather than at individual properties or broken down regionally.
“Centralization of various aspects of multifamily operations is a trend that can prove instrumental in providing operational efficiencies, particularly for those managing a large portfolio,” says Laura Khouri, President and COO of Western National Property Management. “This approach allows onsite employees to specialize in critical focus areas such as resident relations, leasing and maintenance. This specialization not only improves operational effectiveness but also positively impacts the bottom line.”
FirstService Residential takes a customer service-centric approach. “Emergencies don’t always happen during regular business hours, which is exactly why we pioneered a resident care solution that is available to our residents 24 hours a day, 365 days a year,” says CEO David Diestel. “We have a dedicated team handling over 1.2 million inquiries a year, with most resident inquiries resolved at the first call....Our ability to respond with immediacy to resident questions and service requests across multiple channels is a differentiator in today’s world. This will only continue to be ever more important.”
The Peabody Companies uses a hub and spoke style of centralization, says Executive Vice President of Operations Adam Kenney, who adds that the communities run as individual entities at the site level, but several tasks are receiving centralized support such as IT and admin services, compliance and finance. “We’re enabling our assets to operate more efficiently, with streamlined processes and greater transparency for all departments and our third-party owners....By shifting additional functions to a centralized model, we aim to reduce the workload onsite teams face and enhance overall operational efficiency. This ongoing assessment helps ensure our communities can focus on delivering exceptional service while benefiting from streamlined processes and consistent support.”
The resident- and employee-first attitudes emulate throughout the rental housing industry. At HHHunt Apartment Living, this approach is assisted by centralizing tasks, allowing staff more time to focus on residents and the community rather than answer calls and shuffling paperwork. “Accounts payable is one of the tasks being centralized. In some cases, other areas are also moving toward centralization for maintenance work due to labor shortages,” says Lance Goss, Senior Vice President, HHHunt.
One example of this is in markets that have communities within a concentrated area.
“Centralized maintenance only works when you have several communities within a relatively small area,” Goss says. “We are all trying to keep our teams fully staffed and trained and service requests handled quickly. That becomes challenging if you have several positions open. The centralized maintenance takes the burden off the rotation of emergency service calls by adding more people to the on-call rotation. It also can help streamline service requests.”
Technology is the means “for centralized property management, which, over the long term, should reduce the expense of managing properties,” says Gary Jonas, Visionary and Partner with The HOW Group. His firm plans to implement one new centralized function each quarter, with a dedicated IT professional helping with the process.
Centralization and AI have been linked together for some time, and rightfully so since they are both used to save time and money and help improve processes and procedures.
“With our AI capabilities, initial prospect communication has been centralized so that onsite teams save time away from the phone or email and have more time for resident service focuses,” says Christine Gustafson, Vice President of Marketing and Public Relations, The Breeden Company. “We are conscientious of effective time management for our onsite teams; AI can assist. We are analyzing several areas of our operations at the onsite, service and corporate levels to determine where AI is the best fit. AI is still new and evolving; we are optimistic about its potential but also careful in our navigation.”
Read Part Two of this three-part executive preview.
Read the third and final section of the 2025 executive preview.
Michael Miller is NAA’s Managing Editor