Commercial real estate investors are navigating a dynamic market shaped by rising insurance costs, shifting interest rates, labor challenges and ongoing regulatory change. As a result, investors are leaning into operational efficiency as the most powerful hedge in an unpredictable market.
Over the past few years, the U.S. multifamily market has boomed, but it’s now feeling the pressure of this increased uncertainty. Rising about 40% since 2020, the cost of building materials is expected to increase 5% to 7% more this year. The sector also needs about 500,000 more workers to meet the current demand.
This has led building owners to hope for the best but prepare for the worst. The question then becomes: How can owners switch up their operational strategy from a “growth at any cost” mindset to one that’s more conservative and returns-focused to make smart decisions in today’s market?
To answer this question, multifamily owners are focusing on operational efficiency and are leaning on technology to attract and retain residents in a volatile market.
Practicing Operational Discipline
In a survey conducted by the National Apartment Association in 2023, nearly 60% of respondents reported that reducing their building’s costs was their top priority. Fast forward to 2025, this sentiment has changed very little.
“Today, building owners are really looking at what’s going to move the needle and what’s going to affect their net operating income,” said Sandy Jack, vice president of strategic relations for multifamily at ASSA ABLOY – Nomadix and Vingcard.
To reduce operating costs and help their buildings operate more smoothly in uncertain times, owners are increasingly turning to preventative maintenance measures and predictive analytic systems powered by artificial intelligence.
Preventative maintenance can look different to various owners/operators. Some may install smart thermostats and HVAC systems or energy-efficient lighting and appliances to save on utility costs, while others may prioritize servicing their mechanical components more frequently to catch any unwanted surprises before they become big issues.
Owners who take a proactive stance when it comes to maintenance see annual operational savings reach up to 20%. This can massively impact their return on investment.
Resident Satisfaction Impacts Bottom Line
In the National Apartment Association survey, another top priority for apartment owners was retaining current tenants. About 40% of respondents said it was one of the “most challenging activities related to maximizing revenue and profits.”
One of the biggest contributing factors to an unhappy residential experience is less-than-satisfactory building maintenance both inside and outside of the unit. Whether that means slow response times or lack of transparency, it’s estimated that more than 30% of those who choose not to renew their lease do so for this reason.
Another major factor to attract and retain tenants is knowing tenant behavior and catering to their needs through the right amenities, Jack said. Survey data from the National Multifamily Housing Council showed that the overwhelming majority of respondents also said that having flex space either inside or outside the unit for remote working was a must-have. Other necessary amenities to attract and retain residents include smart home features and high-speed internet, with 90% not renting without it.
Technology As A Strategic Tool
With 45% of tenants working from home at least two or three days a week, tenants are spending more time in their units than ever before. Therefore, they want them equipped with technology that will make their lives easier.
“Building owners are looking strategically at technology and what will make a big difference,” Jack said. “It’s very much a deliberate choice to investigate things that are going to help them today and into the future.”
For starters, building owners who choose managed WiFi services can see rates 50% lower than traditional retail WiFi services. This translates into massive cost savings for the tenant.
It also paves the way for other tech-based operational improvements and efficiencies such as stricter security and optimized building energy systems.
“WiFi is the digital backbone for everything,” Jack said. “Once you have that backbone in place with managed WiFi, you can add products like access control, digital door locks, smart thermostats, security cameras or any other proptech you need. For those looking to be strategic, these technologies make the biggest difference. It’s not just a nice-to-have anymore. It’s a hedge against economic volatility.”
This article was produced in collaboration between Studio B and Nomadix. Bisnow news staff was not involved in the production of this content.
Studio B is Bisnow’s in-house content and design studio. To learn more about how Studio B can help your team, reach out to studio@bisnow.com.
