How Multifamily Operators Are Creating Value in a Tough Market
For much of the past decade, success in multifamily real estate followed a simple formula: Buy a property with cheap debt. Raise rents. Sell. Rinse. Repeat. But that strategy is running up against today’s realities. High interest rates and escalating operating costs are squeezing margins. Rent growth has slowed to near zero in many markets, a sharp reversal from double-digit increases in the post-pandemic peak.
“We’re entering a period where it’s less about financial engineering and more about operations,” says Matt White, CEO of Basin Street Properties, which owns and operates more than four million square feet of office, multifamily, industrial, retail, and mixed-use assets across Northern California and Northern Nevada.
Owners can no longer rely on the market to do the work for them, White says. That favors operators who have built the infrastructure to create well-run, desirable properties that attract and retain renters.
The Resident Experience at the Center
For White, the foundation of a well-run multifamily property starts with the resident experience. “This is home for people,” he says. “Our job is to make them proud of where they live.” Clean and safe are table stakes. What separates strong operators is consistency.
That looks different depending on the asset. In a family-oriented community, tenants value grass, greenery and programming designed around children. An urban building might partner with neighborhood restaurants and gyms to offer residents exclusive perks. The through line is understanding who lives at the property, what they value, then executing on that vision.
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Defining that vision is also one of the most powerful levers operators have for holding on to good residents. White notes that retention is a long-term strategy that must be earned continuously, not just at renewal time. “Retention doesn’t start 30 or 60 days before a lease reset,” White says. “It’s the 12-month experience that determines whether someone stays.”
Every vacancy carries costs. Turnover, downtime and renovation expenses can compound quickly when rents aren’t rising fast enough to offset them. Smart operators are taking note, with CBRE reporting an increase in renewal rates versus a decade ago, at 57% versus 51%.
Working Smarter, Not Harder
Another lever is keeping costs down, but in smart ways. For instance, White’s team has revisited vendor contracts, negotiated bulk pricing across properties and traded reactive capital spending in favor of long-range replacement programs.
He cautions against cuts that directly impact residents. “You see people cut landscaping or skip the annual flowers,” he says.
Solid operations practices can also be a key differentiator. White argues that strong multifamily performance today comes from alignment between property management, leasing, facilities, and construction. “Finance matters,” he says, “but their time of driving the bus is done.”
In his view, the facilities team—the people fixing toilets, maintaining grounds and interacting with residents daily—has more impact on retention. Management should give them a clear vision and room to execute.
“There are times in the real estate cycle where all you need is money,” White says. “That’s not today. Today is about who can actually run [the property].”
Source: GlobeSt.
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