Smart Money Is On Smart Apartments
By Jake Voll, President of SS&Si Dealer Network
Between 1985 and 1998, Network Multifamily Security Corporation amassed approximately 200,000 alarm monitoring subscribers. Then in 1998, Protection One acquired Network Multifamily for $180 million.
How did Network Multifamily add so many subscribers so quickly? While other companies were adding accounts one subscriber at a time, they were adding them in bulk! They quickly became the leading security provider to the multifamily housing market.
Protection 1 went on to merge with ADT almost 20 years later, and the Network Multifamily business model was adopted and adapted to become ADT Multifamily. In a few short years, the United States’ largest security provider became a leading provider of smart home technology to multifamily managers and developers nationwide.
Why are Developers and Managers Investing in Smart Technology?
“They are investing because as the renter demographic changes, their residents are looking for simpler ways to access the property and their unit, and they want more control of devices in their homes,” explained Marshall Friday, Director of Sales at ADT Multifamily.
And residents are willing to pay for it! According to research from Parks Associates, 95% of property managers perceive smart home devices can increase rental fees between 5% and 30%. And based on data from the same firm, half of renters are willing to pay more for an apartment with a resident app that offers controlled access to the unit, activity monitoring, energy savings, notifications, and voice assistant support.
Security Integrators are the Trusted Technology Provider
“Integrators need to understand the support structure and how the end user—both the managers and residents—will be served before they make commitments to the equipment. Even as a hardware manufacturer, our support needs to come first,” explained JCI’s Jennifer Doctor, Sr. Director, Product Management.
Doctor leads a global team responsible for analyzing market conditions, defining features and functions, and developing strategies for security and smart home products. Those products include the Qolsys security and smart home hub utilized by ADT Multifamily and other multifamily technology providers.
Doctor’s advice rings true with Friday. He explained that a big part of his value proposition is that when developers and managers choose ADT, they have access to 5,000+ technicians nationwide to help whenever something breaks. And at some point, something will break. A provider’s ability to dispatch a technician for a timely repair is very important to property managers.
Aside from that, while niche technology providers are sometimes narrowly focused with limited integrations, security providers can offer a fully integrated solution. They can provide smart locks, thermostats, and lighting control along with monitored leak detection and automatic water shutoff valves that can prevent costly damages. And they can be a total one-stop-shop providing the common area access control and video surveillance too.
But is the Market Expected to Grow?
“This market has amazing growth. There are about 3-5 companies that seem to be dominating the market share, with new startups entering each year,” explained ADT’s Friday.
The data supports continued multifamily development. According to the National Association of Home Builders (NAHB) Home Building Geography Index, multifamily construction is outpacing single-family construction. While rising interest rates, labor shortages, and surging material costs have caused a single-family construction slowdown, developers are confidently moving forward with multifamily projects.
And as many would-be-homebuyers grapple with the highest mortgage rates since 2008 and a cooling single-family real estate market, continuing to rent is a smart choice. If Marshall Friday has anything to do with it, their smart choice will be a smart apartment.