The multifamily real estate market has softened some over the last few years, but 2017 was again a highly profitable year and there is reason for continued optimism in 2018. There was a common theme of concern coming into last year that, after several years of record rent growth, 2017 would see a pullback.

While ‘17 hasn’t maintained the previous pace, rent growth has maintained historical averages with growth hovering between 2.1 and 2.5% and ending December on a high note. As an aside, I have to share that while we often talk about historical averages, last year was unique because it actually delivered pretty much exactly the historical average, and with remarkably low volatility throughout the year.

As we sit here today, the market can best be described, truly, as a Goldilocks market, where supply and demand factors seem to be strongly balanced and the operating environment is not too strong and not too weak...it’s just right.

Through my career in multifamily, I’ve spent considerable time working with senior executives discussing the best strategies for managing performance in a weak market or for leveraging a strong one. I cannot recall spending much time working on strategies for the type of stable market we find ourselves in.

With 2018 shifting into full swing and showing signs of continued balance, now’s the time to really focus on that unique environment. So here are three things to focus on to maximize performance:

Pay Attention to The Little Things

In an strong-growth world, a rising tide lifts all boats. Not so much in an average world. If we want to beat our competitors—and who of us doesn’t want to do that?—then we have to pay close attention to the details. It's not about doing one or two things 100 or 200% better. It's about doing 100 or 200 things one or two percent better.

This is an entirely different mindset from what we’d do in a five plus percent growth world. In five plus percent growth world, we focus on a couple or three things that would really enable us to take advantage of the peak. In a down market, success goes to those who react the most quickly and who communicate the best with their associates and residents. Victory goes to the swift and decisive in this scenario.

In a Goldilocks world of “just right,” outperformance is going to come from the sum of a lot of little things. The good news is that we have essentially no existential risk; the bad news is we have pay attention to many more things to execute them each just a little bit better.

Work On Your Core

In exercise, developing a powerful core is the first step to making our whole body stronger. It’s a lot more than just making the visible parts of our body look great. Our core is our body’s powerhouse. Get our core in good shape first, and exercising the rest of the body is that much easier.

The same is (metaphorically) true for our businesses. Current market conditions make it a great time to review and improve core parts of our leasing and resident management processes. For instance, right now we're getting more requests about sales and customer experience than ever before. A primary reason is that MFH operators and marketers are seeking ways to find those incremental gains.

Where should you start? Here are two ideas:

• Work like the athletes do and start with spring training. In that spirit, and to make it easier for you to begin a sales spring training exercise, we’ve developed a new webinar you can implement with no impact on your busy training teams. Find out more.
• One of the things I’ve observed in the past year is a growing recognition that sales has been the neglected stepchild of the multifamily housing operating world. During a time of stabilization, now is perfect time to concentrate on sales and any other neglected areas within your MFH business.

Work on your core and strengthen your foundation. It will serve you well whether we end up coming out of this Goldilocks period with a reacceleration of the growth cycle or by having a multifamily recession.

Understand Your Pricing

Pricing is obviously critical in multifamily. It’s also inherently challenging and complicated. In operating conditions where incremental gains are key to superior performance, we need be sure that our pricing strategy and system is aligned and optimized.  

If you haven’t conducted a full pricing review (or what I like to call a health check-up) in the last 24 months, the time is probably right to “schedule an appointment to see the doctor.”  Review cohorts, look at your submarkets and identify the trends that you can take advantage of. We’re in a different market cycle, and that means testing and resetting your assumptions, strategy and execution.

The biggest challenge of today’s “average” market is that, coming off several years of above-average growth, average can feel like it’s bad. The danger of that is that it can become a self-fulfilling prophecy.

The key is to stay focused on your core elements, continue to reinforce your strengths while updating and addressing your vulnerabilities. The ones who best pay attention to the details in this market will be the ones who are rewarded.