AIM 2023: The New PropTech Vendor Paradigm Puts Apt Companies in Front

Finding apples-to-apples bid comparisons is not easy. 

Sourcing and purchasing technology solutions in the apartment industry creates challenges for operators big and small because of the unique way multifamily is structured.

Currently, the large variety of ownership and management structures makes “apples to apples” comparisons of tech implementations tricky.

Solutions are totally different for a public REIT and a merchant builder that focuses most on lease-ups versus a third-party manager, for example. Prop tech decisions are increasingly about properties and not portfolios. 

Beveridge said that multifamily has no research sources that make it easy to compare solutions. If they did, it would make it much easier to start a conversation about pursuing and solving their problems. 

Besides, financial incentives focus best-of-breed vendors on larger operators, which pushes most of the market to the periphery.

Dom Beveridge, Principal at 20for20, led a session with panelist Mike Bergelson, Managing Partner at Glencrest Group; and Annie Koo, Chief Operating Officer at Catalyst, to explain how property owners can take an active role in identifying problem areas and then specify the solutions they need. 

Forward-thinking companies are not always content with being approached by vendors, hoping that they meet their needs and solve their problems. 

There is a pathway to get more differentiated technology that specifically meets the needs of a property – or even portfolio.

“These specifications can be shared with a broad range of vendors that may improve them and offer up targeted solutions,” Beveridge said. “The key is owners taking the risk and guesswork off the plate of the vendors. Proactive specification leads to better/cheaper products and more constructive vendor relationships.”

Many industries have departments devoted to sourcing tech. But not in multifamily.

He said that technology sourcing has not been a historical priority in property management and multifamily tech buying patterns are highly relationship-driven.

“By setting clear definitions [of needed technologies], it helps to better structure conversations with vendors,” Bergelson said. “There’s a ton of opportunity to put more structure around sourcing and buying in multifamily.”

He and Koo both stepped out of the traditional manner for sourcing, finding solutions for security cameras, and renovation bidding, respectively.

More Interesting Points: 

• Bergelson said when recently speaking to suppliers in the exhibit hall, many said they didn’t have many direct competitors in multifamily. “We view our product as completely different,” they said.
• Potential alternatives to the traditional multifamily approach to sourcing include: Do nothing; Purchase stuff off the shelf; Partner with a vendor; Create a new approach. “The easy path is to wait and see what develops,” Bergelson said.
• Catalyst creates essential housing for California. Loo said innovation has “always been at the crux of what we do. We’ve always had to think differently. We have our own innovation lab.”
• Catalyst ultimately found a generative AI tool, Tailorbird, that reduces bid times, construction time, and costs and reduces errors. “The timeline was reduced by six months and construction costs fell by 8%,” she said. 
• Koo said one key to the pilot property’s success with the tool was “honest and critical conversations with the vendor. We gave them a standard PDF which is used now as its template. 
• Bergelson reached out to about a dozen vendors for cameras and couldn’t find a viable, affordable solution. So, he worked with a former colleague to develop CameraPods that monitor the property’s grounds that plugged in to self-create connectivity – one of the top sticking points for the cost through a traditional security camera product.