What: A conversation with industry thought leaders at IMN's Conference
Where: Austin, Texas
When: Thursday, August 22nd 2024. Time: 9:00 - 9:45 am
Tony Julianelle CEO, Partner, Atlas Real Estate Tony has over 25 years of executive leadership experience in the finance and real estate industry. Before joining Atlas, he was a senior leader at a top four bank, overseeing cross-functional teams in the US and overseas. He leads the overall strategy and direction of Atlas while maintaining a relentless commitment to the firm’s values and culture.
Zac Maurais President & Co-founder, Utility Profit Zac Maurais is a serial entrepreneur known for founding and scaling three successful startups, including his latest venture, Utility Profit, which streamlines utility setups for property managers and tenants while generating additional revenue. Previously, he co-founded Sunroom, a home leasing service that grew to 8,000 homes nationwide with innovative AI and IoT tools. His first startup, Favor, became one of Texas's largest employers and was sold to HEB Grocery in 2018. Zac is also a real estate and angel investor and enjoys design, technology, and spending time with his family in Austin, Texas.
Katelyn Utsey VP, Operations, H2 Real Estate Katelyn is the Vice President of H2 Real Estate, serves on the AAA Board of Directors, and is the GBAA President. She received her Certified Apartment Manager credentials through NAA and has a passion of mentoring future industry leaders. Katelyn oversees 189 apartment buildings and 300k sq.ft. of commercial space, contributing to the resurgence of vibrant areas of Downtown Birmingham. Katelyn states that multi-family is more than just a job; it’s a passion, and she owes all success to her current and previous Teams!
Whitaker, Matthew CEO, Evernest Matthew is passionate about making Evernest the best property management company on the planet, inspired by Good to Great. He spent seven years in the trenches and now focuses on expanding into new markets. Entrepreneurship runs in the family, as his wife runs a successful business called Engaged. Outside of work, you’ll find Matthew at his son’s baseball games, his daughter’s dance recitals, or dining with his wife—unless he's traveling. He hails from Vestavia Hills.
John Hirschfeld Chairman and CEO, HomeRiver Group John founded HomeRiver Group and oversees all its operations. He has executed over $10 billion in real estate transactions throughout his career. Before HomeRiver, John was Senior Managing Director at AZ Bidder, co-founded Class Green Capital Partners, and held key roles at U.S. Realty Advisors, Eastdil Secured, and Citigroup. An honors graduate of Harvard and Fordham Law, John lives in New York City with his wife, Meg, and they have three grown children.
Nicole Washington
Mortgage professional with ten years of experience executing and auditing post-closing loan documents. Analyze, multitask, plan efficient work solutions, and provide exceptional attention to detail. Resourceful and adept at prioritizing responsibilities to execute daily tasks successfully.
Panel Conversation key takeaway:
The panel discussion sparked a lively debate about which is better equipped to serve tenants and investors: smaller, mom-and-pop operations like "Little Dave" or large institutional groups managing over 1,000 homes. "Little Dave" offers a personal touch, directly handling calls from investors and conducting hands-on property inspections. In contrast, institutional players invest heavily in data, cutting-edge tools, and AI to optimize operations at scale. While larger companies benefit from centralized, tech-driven efficiencies, the question remains whether the industry will shift towards this model or retain the personalized service that smaller businesses provide. This topic was central to the IMN event, attracting innovative property managers eager to leverage the latest property-tech advancements to streamline operations and enhance the experience for investors and renters.
Tony prompted the group to delve into the essence of genuine customer service. The consensus was clear: it's about more than just collecting tenant surveys or trying to talk to tenants. Proper customer service is about engaging with tenants through their preferred communication channels. If a tenant prefers texting, stick to that—don’t force a phone call.
Matthew further emphasized that exceptional customer service is all about flawless execution. He noted that most people have never had a lengthy conversation with an Amazon customer service representative, yet Amazon is widely regarded for its top-notch service. The reason? Amazon fixes it swiftly and effortlessly when something goes wrong, making the experience as seamless as possible. The key takeaway: excellent customer service isn't about constant communication—it's about getting things right when it matters most.
There are approximately 10,000 SFR-focused property managers in the U.S. with active listings online. Of these, only about 1% manage over 1,000 homes, with a smaller fraction managing over 5,000 doors. About a third of property managers oversee between 100 and 1,000 homes, while the majority (66%) manage fewer than 100 doors. The industry is split between third-party managers and in-house REITs.
New value propositions, such as predictive maintenance insights, are emerging for investor homeowners. For example, some large REITs are developing tools that use detailed images and datasets to predict when specific home components, like roofs or appliances, must be replaced. Additionally, better data will allow for more precise ROI calculations on renovations, helping investors make informed decisions with just a click.
For tenants, recent innovations include self-showings, automated identity and income verification, and resident benefits packages with credit-building features. The next wave of advancements will focus on streamlining the move-in process, where everything from lease accountability to utility setup and moving services can be managed with a single click—significantly reducing stress for renters.
AI has been a buzzword, and for good reason. Soon, one virtual assistant (VA) might perform the work of 20, drastically increasing efficiency. At Zac's last venture, Sunroom, AI was trained to handle thousands of tenant inquiries weekly, answering common questions and enforcing global policies across listings. Katelyn emphasized that AI will augment human work, allowing team members to focus on more complex tasks and providing a premium experience for residents—even in more affordable housing options.
At a previous IMN event in Miami, there was optimism that interest rates would stabilize, but that didn’t happen, leaving many on the sidelines. This slowdown has also affected prop-tech vendors, with a significant drop in venture capital investments—from $32 billion in 2021 to $11 billion in 2023, with 2024 expected to be a weak year. According to Zac, large property management companies will likely grow through consolidation, driven by private equity roll-ups.
The institutional SFR market still has room for growth, though rising interest rates have somewhat delayed it. The demographic trends remain favorable, with many tenants unable to buy homes due to high prices. As a result, the demand for rental housing continues to grow. However, the industry must strategically find ways to reduce housing costs for tenants as discretionary income tightens.
The panel discussed potential legislation limiting REITs from acquiring large swaths of homes, reflecting political concerns about corporate ownership of residential properties. Although no bills have passed, this issue could significantly impact the industry.
On a positive note, changes in eviction and squatter protections are expected to become less restrictive, benefiting property managers.
John shared insights into the ongoing trend of property management company acquisitions, noting that valuation expectations are becoming more realistic. Future valuations will focus on growth, profitability, and EBITDA as the industry moves towards more rational pricing than the peak years ago. Both Evernest and HomeRiver are well-positioned to continue acquiring companies in this environment.
These insights highlight the dynamic nature of the property management industry, with technology, data, and regulatory changes playing critical roles in shaping its future.
The opening session, "The SFR Property Management State of Play," was an excellent start to the conference. Industry leaders discussed the future of property management. Moderated by Tony Julianelle, the panel featured insights on the impact of AI, the importance of flawless customer service, and the growth potential in the institutional single-family rental market. The session highlighted how technology, data, and industry consolidation are shaping the future, leaving attendees with much to consider as the conference continues.
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