GRAND RAPIDS — As competition in the rental housing market heats up across West Michigan, property managers are turning to new kinds of exclusive amenities for their residents.
That’s led Rockford Property Management LLC, the property management arm of Rockford Construction Co. Inc., to offer “Rock Perks,” discounts and offers for local businesses and experiences that are exclusive to residents at the facilities it operates.
“Across the industry, I think it’s recognized there are more apartments online, not just in Grand Rapids, but nationwide,” said Monica Steimle-App, executive vice president of real estate development at Rockford Construction. “People have choice. Whether it’s within a building or an experience amenity, residents choose what their experience is going to be as opposed to just a space.”
Rockford Property Management sees establishing these perks as an extension beyond what the company can offer its residents in the building. As thousands of units have come online in recent years in the city, multifamily housing managers are competing for residents in new ways that go beyond pricing.
Rents in Grand Rapids have increased by 0.5 percent year over year, according to recent data from Apartment List, a San Francisco-based listing firm. Grand Rapids is not alone when it comes to rent increases: In Michigan, the rent increased in each of the 10 largest cities.
Median rent for a two-bedroom apartment in Grand Rapids was $917, which is still below the national average of $1,193.
The growth in rent prices in Grand Rapids also lagged behind the state average of 1.1 percent, as well as the national average of 1.6 percent. Most cities nationwide saw rent increases last year, although Grand Rapids is “more reasonable” than most large cities, according to Apartment List.
Rockford Property Management, like many property managers, uses comparables when setting its rental pricing. The firm focuses on the reality that people have many choices when it comes to housing in Grand Rapids.
“Although there is some differentiation with how units are built out, a lot of the new apartments are really similar,” Steimle-App said. “We focus on a hospitality-driven culture. We emphasize the extremely high level of customer service, but also where we utilize our community as an amenity.”
Pure Real Estate Management LLC, which started in 2018 as an offshoot of what’s now known as Wheeler Development Group, manages multiple townhome properties in communities in and around Grand Rapids. Townhomes take different marketing compared to downtown Grand Rapids apartments, but Pure Real Estate uses some of the same tactics when it comes to attracting residents in a competitive market.
“We start to dial in on the things that we can add to the resident experience,” said Jason Wheeler, communications director for Pure Real Estate. “We want people to feel like they’re living in a home, so we try to attract that potential audience and look at in-unit amenities.”
The communities surrounding Grand Rapids also provide a valuable asset that sometimes can’t be found in more urban areas, including different school districts and amenities like bike and walking trails, dog parks and other recreation opportunities. These are high value add-ons that differentiate Pure Real Estate’s properties from others, Wheeler said.
Pure Real Estate also will offer incentives, including discounted units or first month free deals, when more competition exists.
“Those are dictated by how busy the market is,” Wheeler said.
For property managers who work with single-family or smaller multifamily properties, the competitiveness in the market has caused rents to plateau recently, said Tim VandenToorn, managing partner and broker at Grand Rapids-based United Properties of West Michigan LLC.
United Properties manages about 1,000 single-family and small multifamily units in and around Grand Rapids. VandenToorn cited several differences between the market for single-family home rentals and newly built properties.
“Condo and apartment buildings do have to add a lot of incentives to attract renters,” he said. “We have not had to add any sort of incentives to our properties as incentives to rent, but what we have had is owners asking, ‘How come this property is not renting for the same price as last year?’”
The days of being able to rent a “C-class” property that hasn’t been maintained or updated are gone, VandenToorn said. In this market, United Properties focuses on upgrades to make properties more appealing, which could be as simple as taking better marketing photos, and also offers a “very flexible” schedule to show the units. The company spends a significant amount of money on marketing and its web presence, he added.
“Our reputation based on the size of our company is very important,” VandenToorn said. “With social media and the web, that’s a very big thing for us and our owners.”
The tactics to attract renters seem to be working, as Grand Rapids has vacancy rates below 5 percent for multifamily properties, according to recent data from the West Michigan office of Colliers International. The firm expects more than 900 market-rate units to come online in 2020.
As more units reach the market, property managers predict a further shift into providing amenities beyond just a nice place to live.
“We feel that by adding more value to our actual physical space, we’re creating more value as a part of our building others may not have,” Steimle-App said.
News coverage in the real estate and development section of MiBiz is made possible by advertising support from Rockford Construction Co. Inc. Rockford is a nationally recognized construction, real estate development and property management provider, serving West Michigan and beyond for more than 30 years. This advertisement has no effect on editorial consideration in MiBiz.