Dom Beveridge, Principal of 20for20, joins Daniel Cunningham on Apartment Academy to discuss what else but – centralization.
Introduction to Centralization
Centralization has become a buzzword in multifamily operations, largely spurred by the operational shifts necessitated by the COVID-19 pandemic. The concept isn’t new, but its application and understanding have evolved significantly in recent years. Dom discusses the phased approach to centralization, breaking it down into components that are moving at different speeds across the industry.
The Three Phases of Centralization
- Leasing Operations: Initially, centralization focused heavily on leasing. Initially, many companies embraced centralized technologies like CRMs but struggled to overhaul operational models completely.
“When we actually ran the research, when we asked 20 different leaders, ‘Could tell me what you did last year?’ It turns out hardly anyone had actually changed that much,” says Dom. “Lots of people have rolled out technology that supports centralization. So if you think about rolling out something like a CRM that has a more centralized structure, it has benefits like sharing leads between different properties, but that doesn’t necessarily entail changing the way that you staff properties as far as leasing agents go. What I found last year was that you have a lot of people who implemented the technology, but very few who’d actually change much about how their operating model worked.”
- Administrative Functions: The next phase saw a shift towards centralizing administrative tasks—those repetitive, lower-value tasks like month-end accounting and payment collections. These functions are increasingly being handled by centralized teams or through shared services, improving efficiency and allowing on-site staff to focus more on customer service and sales.
“That (administrative functions) tended overwhelmingly to be the thing that people started with if they were trying to change the model,” says Dom. “There were two things I think that make people think about it that way. There’s actually no good reason to do that work on property in the first place, right? Nobody’s going to renew their lease because of the great month-end accounting that you do. Right? It also doesn’t have that much of a service element to it, and yet it’s always been this slight kind of constraint on career paths as well. Like, if you’ve got a really good leasing agent, the path to be a community manager is via this job that’s really heavy on bookkeeping.”
- Maintenance: The centralization of maintenance is less about reducing staff numbers and more about optimizing resource allocation. Specialized roles in maintenance, like appliance specialists or painters, can service multiple properties efficiently, reducing the need for external contractors and associated costs.
Challenges and Opportunities
While centralization offers significant benefits in efficiency and cost-effectiveness, it also poses challenges, particularly in navigating operational complexities. Issues around data sharing, legal implications, and resistance from on-site teams or third-party managers can slow down adoption.
The Human Element in Centralization
Despite the push towards automation and technology, the human element remains crucial. Dom emphasizes the importance of balancing technological integration with human interaction, particularly in high-touch areas like leasing and customer service. The goal is to enhance efficiency without compromising the quality of tenant interactions and experiences.
“You can’t get rid of that work (maintenance) from the property altogether,” says Dom. “But you can greatly reduce it, streamline it, make it more efficient, effective. Maintaince – this is very limited extent to which you can automate maintenance activities. You can be way more efficient. You can save a lot of money. But, ultimately somebody has to show up and fix the fridge, right?”
While centralization is advancing in multifamily operations, it’s not a one-size-fits-all solution. The pace and adoption of centralization vary by function and are influenced by company size, property locations, and technological capabilities. As the industry continues to evolve, operators must remain flexible and responsive to both technological advancements and tenant expectations.
As we look towards the future, the interplay between technology and personalized service will define the next phase of operational efficiency in multifamily.
EPISODE LINKS
Follow Daniel Cunningham on LinkedIn: https://www.linkedin.com/in/cunnuh/
Follow Dom Beveridge on LinkedIn: https://www.linkedin.com/in/dombeveridge/
Follow Apartment Academy on LinkedIn: https://www.linkedin.com/showcase/apartment-academy/
Click here to download the 20for20 white paper: https://20for20.com/white-paper/
For a full transcript of this episode or to catch up on previous seasons, visit: https://info.leonardo247.com/aa-request-a-transcript-
About the Apartment Academy: Hosted by Leonardo247 founder and CEO Daniel Cunningham, each episode of the Apartment Academy delves into the multifamily industry’s operational challenges and strategies. Tune in for insightful conversations that are shaping the future of property operations.