Lessen

Doing More With Less: Unlocking Resident Satisfaction and Financial Value Through Centralization and Automation

The white paper titled "Doing More With Less: Unlocking Resident Satisfaction and Financial Value Through Centralization and Automation" examines how the multifamily housing industry is leveraging advancements in proptech, particularly AI-driven centralization and automation tools, to enhance property management efficiency, improve resident retention, streamline maintenance and leasing processes, foster vendor and owner relationships, and ultimately increase financial value and portfolio growth amid a shifting renter market.

<Lessen®

Doing More With Less

Unlocking Resident Satisfaction and Financial Value Through Centralization and Automation.


Section 1: Introduction ..... 3

Section 2: State of Multifamily ..... 4 A Renter’s Market ..... 5 Prioritizing Retention ..... 6

Section 3: The Property Manager’s Role ..... 8

Section 4: Defining the Benefits of Centralization and Automation ..... 9 Drilling Down into Repairs and Maintenance ..... 10 Simplifying the Triage Process ..... 11 Turns: Preparing for Move-In ..... 13 Managing Capital Improvements ..... 14 On-site Management Teams: Retention and Job Satisfaction ..... 15 Growing and Fostering Vendor Relationships ..... 16 Nurturing the Property Owner-Manager Relationship ..... 17 The Affordable Nuance ..... 18 Achieving Higher Valuations, Growing Portfolios ..... 19

Section 6: The Lessen Solution ..... 20


Section 1: Introduction

The multifamily industry is undergoing a tech-driven transformation.

As the industry grapples with shifting renter behavior and significant market changes, a wave of proptech solutions promising to deliver efficiency and innovation has emerged. Property management, in particular, has become a focal point for these advancements, with numerous technology companies striving to streamline maintenance, enhance leasing processes, boost revenues, and reduce costs at scale.

The advent and widespread adoption of artificial intelligence (AI) has further accelerated this trend, making property management platforms more powerful and capable than ever. As part of these advancements, automation and centralization tools have seen substantial improvements, enabling property managers to enhance operational efficiency and expand their reach—regardless of portfolio size or geographic spread.

The following white paper explores the rise of centralization and automation within the multifamily sector, with insight from the Lessen executive team, a range of data sources and reports, countless conversations with clients, and several unaffiliated real estate operators who agreed to weigh in on this timely topic. The white paper examines the current market landscape, the primary challenges faced by multifamily operators, and how centralization technologies are addressing these issues while driving significant improvements to property owners’ bottom line.

Automation and centralization tools have seen substantial improvements, enabling property managers to enhance operational efficiency and expand their reach—regardless of portfolio size or geographic spread.


Section 2: The State of Multifamily

Five years since the emergence of COVID-19, the long-term impacts of the pandemic continue to influence trends within the multifamily sector, as well as the role of owners, managers and other industry stakeholders.

Delivery Boom

The apartment market’s resilient performance - a stark contrast to other CRE sub-sectors - triggered a record-breaking building boom in 2024, according to <u>RentCafe,</u> with the subsequent pipeline of newly delivered units exceeding multi-decade highs.

This influx of supply has sapped much of landlords’ negotiating power. Not only have vacancy rates continued their gradual climb since hitting bottom in 2022 according to <u>Statista</u>, but after years of unprecedented pricing leverage, apartment owners are struggling to maintain rent growth.

Rising Costs

Apartment owners, who are beleaguered by a wave of incoming supply, are also grappling with spiking operational expenses across the country. As of January 2024, average multifamily spending on re- pairs and maintenance rose 8. 8% year over year, according to <u>Yardi’s Matrix Research Bulletin.</u>

Labor Crunch

While pandemic-era supply chain disruptions have eased, high labor costs have not abated. The price premium for skilled labor is shaping up to be a long-term reality for real estate companies, with more skilled tradespeople exiting the industry than entering it since 2020, according to the <u>National</u> <u>Center for Construction Education and Research</u>, (NCCER).

The talent struggles are now also extending to the recruitment and retention of experienced leasing professionals and skilled maintenance staff. This talent shortage aligns with broader macroeconomic trends, with close to 75% of global employers reporting challenges in filling roles, according to <u>The</u> <u>ManpowerGroup</u>.

Inflation Matters

The Federal Reserve’s campaign to rein in historically high inflation has pushed interest rates near record highs, limiting capital availability for multifamily properties.

The capital markets slowdown — multifamily lending fell by nearly 50% in 2023 according to the <u>Mortgage Bankers’ Association</u> — and overall softening across the multifamily sub-sector, has led to lower property valuations.

As a result, owners’ divestment options are drastically limited. While some owners have been forced to accept major discounts, there has been a general freeze in deal activity. Headwinds are equally strong on the acquisitions side, with investors struggling to find lenders willing to provide capital at reasonable rates.


A Renter’s Market

The trend of Americans favoring renting over buying continues to gain momentum, a shift that has persisted since the post-Great Recession era. According to the National Multifamily Housing Council, over 45 million American households—roughly 34% of total U. S. households—now rent their homes.

Affordability concerns are a significant driver of this trend. In June 2024, Redfin reported that the median home price reached an all-time high. However, rising housing costs aren’t confined to home sales. Since 2019, average rent prices have risen by 19%, according to an analysis by <u>The Washington Post</u>. While the same report notes only a 1% year-over-year increase, <u>nearly 22. 4 million U</u>. <u>S</u>. <u>households are now considered cost-burdened,</u> spending more than 30% of their income on rent. Alarmingly, 12. 1 million households spend more than 50% of their income on housing.

Although wages have seen some growth, renters are more price-conscious than ever, with many actively seeking more affordable options. Zego’s 2024 State of Resident Experience Management Report reveals that over 40% of apartment residents are considering a move in 2025, with the majority citing high rent as the primary factor in their decision.

U. S. households now rent their homes

Roughly 34% of total U.S. households now rent their homes

households are now considered cost-burdened, spending


Prioritizing Retention

Amidst intense competition, property owners and management staff across all rental price points are shifting their attention to keeping current tenants happy, while continuing to woo new, long-term residents.

While resort-style amenities like rooftop pools and commercial-grade gyms grab attention, renters consistently prioritize responsive property management. Clear communication, prompt service, and diligent property upkeep often outweigh luxury features in a renter’s decision-making process.

Despite often being comfortable with technology, renters also expect high-touch customer service, underscoring the importance of personal, human interactions with property management staff - especially during the crucial move-in window.

“If a resident moves in and the unit is not up to the expected, Class A, apartment standard, that’s a major factor in future turnover,” said Phillip Boatwright, Executive Vice President of Property Management at The NRP Group, a vertically integrated develop- er, builder, and manager of multifamily housing. “People typically decide if they want to renew their lease for a second year in the first few days after their move-in, even though most leases are for 12 months or longer. If the initial resident experience doesn’t meet their expectations, it has a major impact on renewability.”

Philip Boatwright


Property payment company Zego surveyed American renters as part of its 2024 State of Resident Experience Management Report.

What are renters’ reasons for not renewing a lease?

Top responses include:

47% of renters rank maintenance

repairs as a top priority Top responses include:

  1. 1.Rent is too expensive

46% of renters rank community

  1. 1.Safety concerns

security as a top priority

  1. 1.Poor maintenance service

What are the most important aspects of resident experience?

4. Poor property upkeep

34% of renters rank community appearance/

cleanliness as a top priority

(#1 and #2 choices combined)

5. Poor management communication & responsiveness

22% of renters rank customer service/staff

of renters rank customer service/staff 22% interactions as a top priority


Section 3: The Property Manager’s Role

Multifamily property managers are under water. Operating as a property’s CEO and COO, property managers are tasked with leading a community’s leasing, marketing and programming, overseeing maintenance operations, collecting rent and more. With a whirlwind of daily tasks and stakeholders including ownership, residents, on-site staff and external vendors, property managers are stretched to their limit as they try to meet renter and owner expectations.

Whether working on-site at a property or in a regional office, their responsibilities can include:

Maintenance:

  • Hiring, retaining and managing on-site staff
  • Bringing on third-party vendors
  • Overseeing ongoing maintenance work (electrical, HVAC, plumbing, etc.)
  • Ensuring the property’s curb appeal

Leasing:

  • Screening potential residents
  • Conducting apartment tours
  • Reviewing lease applications
  • Signing leases and renewals
  • Managing apartment turns to keep units occupied

Finance

  • Collecting rent
  • Managing property maintenance budgets
  • Handling insurance issues
  • Financial reporting to corporate ownership

Marketing

  • Creating marketing campaigns to attract new residents
  • Maintaining property website/social media
  • Marketing community programming
  • Capturing and editing unit photography for marketing collateral

Section 4: Defining the Benefits of Centralization and Automation

Centralization and automation are transforming business as we know it across countless industries—reducing costs, creating new efficiencies, and enabling better decision-making through access to better data.

Within the multifamily sector, owners, property managers, and technology vendors are automating an increasingly long list of tasks, from rent collection to resident communication and tracking of maintenance requests.

Industry participants are also rolling out centralized systems that give off-site teams the ability to handle countless, and often menial, property management tasks remotely, freeing on-site staff to lean into their core, revenue-generating functions, such as touring prospective residents and interfacing with current ones.

The following section outlines the direct benefits of a centralized, automated approach for property managers, including benefits to management of maintenance and repairs, resident turnovers, capital improvements, and more.

Centralization (noun): to concentrate operations or decision-making in a central location.

Automation (noun): the use of technology to perform tasks without the need for human control or intervention. [Image: Im0]


Drilling Down into Maintenance & Repairs

For smaller rental landlords, managing repairs and maintenance can quickly escalate into a persistent challenge. For large multifamily owners with diverse national portfolios, this aspect of property management can easily become overwhelming.

Fortunately, landlords and their property management teams are now moving away from outdated, paper-based processes traditionally used to handle resident work orders. Instead, they are adopting new, tech-driven, centralized systems.

Leveraging machine learning and automation, these platforms not only offer significant time and resource savings but also enhance transparency and visibility for management, property owners, and even residents.

“Repairs and maintenance are typically the largest variable cost in a multifamily community, but task management for this work is often done manually or on a desktop computer,” said Lessen Residential President Josh Swift. “Technology can be an absolute game changer. With our software, the majority of task assignments are fully automated — the technology automatically dispatches work orders from residents to the most appropriate vendor without the need for a human middleman. By moving from whiteboards to mobile apps, we’re solving problems faster for residents, while also bringing greater visibility to corporate executives.”

Days to Completion VS Average Rating - YTD

There is a clear correlation between the speed with which a maintenance request is completed and the resident satisfaction rating

4.84 4.81 4.76 Source: Lessen Inc. 4.75 4.71 4.71 4.70 4.66 4.58 4.49 4.41 0 1 2 3 4 5 6 7-14 14-21 22-30 31+

For the first week, each extra day it takes to complete a work order translates into more than 0.02 fewer stars on average. Work orders completed in the second, third and fourth week have progressively worse satisfaction ratings.


Simplifying the Triage Process

A key benefit of tech-driven platforms is their ability to revolutionize how open projects are triaged and how property managers communicate with technicians.

For example, software can guide residents through a detailed yet intuitive list of questions to more accurately identify their respective issues. Critically, these platforms allow users to upload images and video clips, providing technicians with precise insights into the problem.

This level of upfront visibility is transformative. Not only does it enable the software and property managers to strategically assign repair and maintenance requests to specialized vendors when necessary, but it also ensures technicians arrive on-site with the appropriate materials and tools, ready to efficiently complete the job.

Technicians themselves also can upload before and after photos as an additional form of work order validation, significantly expediting the invoice resolution process.

Software can guide residents through a list of questions to more accurately identify their respective issues. Critically, these platforms allow users to upload images and video clips, providing technicians with precise insights into the problem. [Image: Im0]


Centralized platforms offer improved visibility and collaboration between management staff repair staff through…

Calendar synchronization. Visibility into every technician’s real-time schedule is a lens into the actual state of maintenance coverage across an entire portfolio, which is especially helpful in emergencies or for planned maintenance requiring special competencies.

Provider skill set profiles. These help determine which provider should be dispatched for a specific work order. Service providers that perform especially well in certain trade categories are more effectively dispatched to locations with sudden needs. This way, problems are solved faster and on the first visit. Detailed provider profiles are especially useful for building out preventative maintenance calendars.

Geolocation technology. While self-reported information on arrivals and departures gives property managers some visibility into a technician’s schedule, geolocation gives proof of service that can streamline the billing process.

Lassen

Schedule | Schedule Calendar Total Utilization Now 50% GROUP 809 Wednesday, Aug 9, 2024 Completed Organize Scheduled Blocked Time OFF Moved LTA Proposed Scheduled Time Impacted MIO Scheduled (B14)

Edit Assigned SR

Schedule New Time Selected of Some Time Manual 4:30 PM - 6:00 PM

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Schedule


Turns: Preparing for Move-In

The process of multifamily apartment turns, or “make-readies,” involves the intricate coordination of third-party vendors, internal staff, and essential inventory like new appliances. When not managed efficiently, turns can lead to significant delays, increased costs for property owners, and miscommunication, all of which contribute to a negative experience for residents.

Even for operators with dedicated on-site teams, prioritizing make-readies can be challenging. Property staff is often diverted to handle emergency repairs or oversee seasonal maintenance tasks, such as snow removal, which causes units to remain vacant longer than necessary.

Centralized management platforms significantly streamline the apartment turn process by reducing staff downtime and ensuring that teams have the necessary tools and materials exactly when they need them.

“We’ve seen properties where units sit vacant for two to four weeks because turns weren’t completed quickly — that’s a lot of lost revenue for what boils down to lack of coordination and labor,” said Lessen Residential President Josh Swift. “Centralized platforms allow managers to zoom out of the micro day-to-day activities and plan for the broader needs of the portfolio, better scheduling their staff and managing inventory, to keep apart- ment downtime between residents to an absolute minimum.”

“It’s all about making sure that, after a resident moves out, the apartment is made move-in ready and the high standards set for new residents are met at every level. If the make-ready process is not performed efficiently, ideally in three to five business days, the resident could be lost for lack of ready availability.”

Phillip Boatwright, Executive Vice President of Property Management at The NRP Group.

Plumbing Services


Managing Capital Improvements

Capital improvements - such as HVAC upgrades, landscaping projects or even replacing windows, doors or roofs - are a major source of stress for managers of older rental properties.

Already dealing with increased labor and materials costs, property management staff must also ensure these renovation activities do not interfere with or impact the day-to-day quality of life for residents. For instance, repaving parking lots and sidewalks should be strategically scheduled during non-peak traffic hours, while repairs to pools or outdoor amenities should be planned for fall or winter months, when usage is low.

When planned and coordinated at the property level, without leveraging insights offered by a centralized platform, property managers leave significant efficiency gains on the table.

“Much like with make-readies, a centralized property management platform allows managers to see the forest in addition to the trees,” says Lessen Residential President Josh Swift. “You’re able to plan out capital projects across entire portfolios months in advance while also seeing up-to-date costs for comparable projects. It dramatically improves efficiency while allowing management teams to budget more effectively.”

44 Years Average age of U.S. rental properties

$55+ Billion Estimated cost to address repair needs of the nation’s occupied rental stock

America's Rental Housing 2024; Harvard

$55+ Billion efficiency gains on the table.


On-site Management Teams: Retention and Job Satisfaction

While the peaks of the so-called Great Resignation of 2021 and 2022 are largely behind us, a significant number of Americans continue to leave their jobs in search of better opportunities. This trend is particularly pronounced in the property and facilities management sector, where nearly one-third of employees turn over annually.

The reality is clear: Serving as a maintenance technician at an apartment community is a demanding role, often involving irregular hours, challenging interactions with residents, and the constant feeling of being stretched too thin. However, data suggests that much of this attrition is preventable. A recent Gallup poll revealed that 42% of Americans believe their job departures could have been avoided if their supervisor or organization had provided better support.

For on-site management staff, centralized, tech-driven platforms offer a vital support system. “By automating routine tasks and streamlining processes, these tools not only reduce burnout but also enhance job satisfaction,” said Lessen Residential President Josh Swift. “When team members can focus on what they do best, they’re more engaged and effective in their roles, leading to better outcomes for the entire organization.”

Reducing staff turnover also has the added benefit of enhancing individual skill sets, fostering more meaningful career progression. Residents, in turn, benefit from consistent, high-quality service delivered by well-trained, long-term staff.

22% 33% 11% 33% Average annual turnover for US property managers. 11 percent over the national average. (SNAPPT)

51% Number of Americans actively watching for or seeking a new job (GALLUP)


Growing and Fostering

Vendor Relationships

Even for apartment properties with substantial on-site staff, managing relationships with external tradespeople presents its own set of challenges.

Traditionally, external vendors have skewed heavily toward personal contacts of property managers. But without a robust “rolodex” of trusted, licensed vendors to call upon when needs arise, managers can find themselves in difficult situations, often resorting to Google searches for critical third-party support. This ad-hoc approach can result in overpaying for services; in the worst case, it can necessitate damage control due to scheduling conflicts and inconsistent service quality.

At the single-property level, managing existing vendors while cultivating relationships with new technicians can be time-consuming. At the portfolio level, it can quickly become unmanageable.

For Stacey Smith-Shelley, VP of Real Estate Management at EAH Housing, a nonprofit affordable housing developer active in California and Hawaii, access to a centralized vendor database has been crucial as her management portfolio expands.

“With just a few clicks, I can quickly identify a variety of vendors we trust in any of our markets,” says Smith-Shelley. “Most importantly, it allows my team to ensure that the technicians have the proper insurance and experience to manage affordable housing needs. This is especially helpful when onboarding a new property, as we need to be up and running very quickly.”


Nurturing the Property

Owner-Manager Relationship

With record-high apartment deliveries across the U. S., third-party management firms are preparing to onboard new properties while striving to differentiate themselves in a competitive market. A <u>recent</u> <u>industry report</u> indicates that 94% of property managers nationwide plan to expand their portfolios throughout 2024-2025, with 54% anticipating “significant” growth.

Stacey Smith-Shelley of EAH Housing emphasizes that the cornerstone of building trust with new third-party management clients lies in providing timely, accurate reporting and transparent communication tailored to the unique needs of each client organization.

“Every company values different aspects of their property or portfolio in their reports, and sometimes even individual stakeholders within a single property have specific preferences. Customizing these reports can be time-consuming, but our property management platform streamlines the entire process,” says Smith-Shelley.

Much like today’s smartphones allow users to set phone notifications according to their preferences, modern management platforms allow landlords to fine-tune reporting on the health of their assets. Crucially, these reports can be automated, ensuring they are consistently delivered on time without burdening management teams.

This level of transparency and reliability fosters trust between managers and owners, leading to improved decision-making and ultimately enhancing property performance.


The Affordable Nuance

Managing an affordable housing community comes with a unique set of challenges, including navigating stringent regulatory requirements, operating within tight budgets, and meeting the diverse needs of tenants.

“The primary challenge in affordable housing is fully qualifying the prospective residents. Determining whether a prospective resident’s household income fits specific Area Median Income (AMI) designations —which vary by city and between communities—requires significant due diligence.

“This process involves verifying the number of people in the household and typically goes through either an in-house compliance department or an external compliance vendor,” says NRP’s Phillip Boatwright.

Traditionally, compliance with these regulatory requirements—such as get- ting residents approved—has relied on paper documentation, and, in many cases, it still does. However, leading affordable housing managers are ex- ploring ways to streamline.

Some organizations are developing off-site, centralized compliance teams that alleviate the administrative burden on on-site staff, allowing them to focus on core functions, such as resident services. Others are doubling down on the human connection by enhancing their on-site approach with updated technology that simplifies the complex process of affordable housing appli- cations.

Ultimately, both strategies leverage technological innovations to improve the applicant experience and reduce the time between application and move-in.

“Affordable housing communities have a different culture to those of market-rate properties. In my experience, tenants feel a deep gratitude for having a place to call home; however, this can sometimes mean they delay or avoid placing maintenance requests to not burden on-site staff. Of course, we do our best to make them feel comfortable placing work orders, but their hesitance may lead to certain maintenance issues growing larger and more severe.”

Stacey Smith-Shelley, Vice President of Property Management at EAH Housing Group, which oversees a management portfolio of over 13,300 units.

A


Achieving Higher Valuations, Growing Portfolios

On their own, the improvements in tenant satisfaction, internal team morale, and third-party vendor relationships fostered by centralized tech platforms may appear subtle. However, when combined with the cost savings and efficiencies unlocked by advanced analytics, the impact on a property’s overall financial performance can be substantial.

Phillip Boatwright of NRP highlights the effectiveness of his firm’s integrated in-house tech platform, which connects seamlessly with software including Yardi, Microsoft Outlook and other essential technologies for analyzing day-to-day operations. “The platform provides us with a comprehensive scorecard that tracks dozens of metrics, including occupancy levels, renewals, service requests, make-readies, and procurement. Ultimately, our system delivers a score reflecting the health of each property and is accessible across the entire department. ”

Data-backed insights can easily be provided to would-be partners, as well as to potential investors looking for high-performing assets.

In addition to enhancing the bottom line, these operational insights empower owners and investors with the confidence to expand their portfolios, whether through acquisitions or new developments.

“It’s hard to overstate the value of better data for executives thinking about making new acquisitions,” said Josh Swift of Lessen. “One property where our tech is deployed recently sustained significant damage from a hurricane. The digital work orders started rolling in pretty quickly, and within 24 hours, we had a handle on all the damage the hurricane had caused and an estimate of repair costs. Years ago, property owners considering buying a property in hurricane-prone regions had to rely on their gut or months of paperwork. The ability to gain an immediate, deep understanding of hurricane risk — among dozens of other operational costs — gives investors a much greater comfort level when they seek out and underwrite new deals.”

One Search FVD & Location Dashboard Active Center VID Management Call Center Insurance Utilities Calendar PVD History Energy Training Preferences

Repairs & Maintenance Dashboard Configure our dashboard

Region District Service Category State Secret Threat Apply Clear Calls

1 Unprepared 2 Unknown 3 Driven by mistake 4 Custom servicing request 5 Preventing Client Dispatch Abort 2 Programmed information

Part No. Completion BM 8400 MN 9000

Report Estimate Project ID Service Resource Pro KD Level Program Y Aggregate cost per hour Y Duration PVR performance H Expected per hour H Expected duration H Avg repair PVR age Avg solution cost H Item served to faults Open notifications Insurance 60 2 61300 24 2 days 632 1 1 Gasoline 10 16 61300 68 8 days 632 0 0 Hairline 71 56 61300 2 6 days 632 0 0 Gasoline 74 56 61300 67 4 days 632 0 0 Gasoline 75 56 61300 67 4 days 632 0 0


Section 6: The Lessen Solution

Lessen simplifies the property services process. Specifically designed to help property teams better manage distributed real estate portfolios across multifamily and other real estate asset classes, the platform eliminates uncertainty and risk, while empowering teams to grow and scale through fully- outsourced real estate property maintenance services, and management of capital projects and make-readies across multifamily portfolios.

Lessen currently handles 12,000 work orders per day, including maintenance requests and make-readies. With a 96-percent satisfaction rate, Lessen streamlines operations for residential and commercial owners and occupiers, who collectively manage over 1 million locations.

With 24/7 access to a pre-qualified, national network of 34,000 vendors across 55 trades, Lessen is committed to optimizing every property by simplifying complexities and delivering value through property maintenance solutions.

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