The downward spiral of the economy and near shutdown of the capital markets may have put the brakes on new bricks-and-mortar development for the near term, but in cyberspace, where real estate is practically free, multifamily companies are ramping up construction of virtual assets to attract renters to their actual apartment communities.
Multifamily REITs like Equity Residential and UDR, Inc., are taking advantage of that flexibility. In the multifamily space, UDR is a leader on the Web site front. In September and October, the fifth largest of the country’s dozen multifamily REITs unveiled a couple of new Web sites the company has added to its collection of virtual domains, which include the apartment industry’s first Spanish language site.
“In a slowing economy, driving traffic to our properties is critical to our success,” UDR Senior VP of Operations Jerry Davis said last summer, as the global financial crisis deepened. “Our Web enhancements and call center initiatives ensure that we can interact with customers and prospects at their convenience, 24 hours a day, seven days a week.”
In its continuing effort to enhance its Internet presence while focusing on finding new ways to make doing business with UDR easier and more efficient, the company has added a bundle of new entryways over the 18 months since its Internet presence was completely overhauled, earning the REIT the top spot in an analysis of 15 multifamily Web sites conducted by a well-known, worldwide Internet research firm at the end of 2007.
In early October, the 35-year-old UDR, Inc., which owns and manages nearly 45,000 apartments from coast to coast, announced the launch of the multifamily industry’s first Web site on MySpace, a leading social networking Web site.
Located at www.myspace.com/rental apartments, the site extends UDR’s marketing reach to millions of new prospects and is expected to generate incremental apartment search traffic for its communities by tapping into the social media site that reported more than 117 million unique visitors for the month of June alone.
“The potential benefits of online marketing in this social space are too numerous for us to sit back and wait for others to go after this market segment,” said Davis. “We believe our MySpace presence will help us connect with prospects, generate low-cost Web site traffic, increase awareness of our apartment home communities and build and grow a social community around the UDR brand.”
Features of the UDR MySpace Web site include robust apartment search capabilities like Google mapping and real-time information about apartment availability, rent and amenities, UDR apartment videos, a FlickR.com photo feed that presents UDR apartment-related photos and opportunities to build a social community via Add a Friend, Forward to a Friend and Add to Group.
“We also plan to expand UDR’s visibility in other social media sites, such as Digg, Twitter and Facebook,” Davis added. “We want to be wherever our target prospects are and we want to be there first.”
At the end of September, the REIT launched a Web site that can deliver information about UDR’s apartments to Apple iPhone and iPod touch users.
“We’re excited to become the first company in the multifamily industry to offer an iPhone/iPod touch-friendly Web site,” said Davis.
“Millions of people use these mobile devices and this new Web site enables a growing number of customers and prospects to quickly and easily connect with UDR and enjoy a first-class user experience.”
The REIT’s new iPhone/iPod touch compatible Web site, http://iphone.udr.com, provides instructions to select Apple mobile devices that eliminate the need to zoom in and zoom out to adjust a browser in order to view information about UDR’s apartments. Other unique features include full apartment search functionality and presentation of a targeted community on the home page that is based on the user’s geocode area and/or the IP address of the service provider’s server.
The site also provides easy access to Google Maps, showing the precise location of apartment communities along with photo features that enable users to take a virtual look at an asset that interests them, an automatic telephone dialing feature that can connect the user to an apartment community office and mobile reservation capability that enables users to put a unit on hold.
“The iPhone’s Safari browser is perfect for people who are always on the go,” said Davis. “Since Apple is expecting to sell nearly 10 million iPhones by the end of 2008, we want to be able to connect with all of them, from anywhere, 24/7.”
Other renter-targeted tech initiatives implemented by UDR this year include the August enhancement of the company’s own Web site apartment search capabilities with the addition of Google Street View Maps, which provide 360-degree panoramic street-level views of the neighborhoods surrounding the company’s apartment communities. This feature enables prospective tenants to take an online, 3D walking tour of the area.
Last April, UDR introduced Quick Response bar code technology to its list of online marketing program enhancements. The Quick Response bar codes, which the company is adding to its print advertising, marketing collateral, Web site pages and apartment community locations, can store much more information than traditional UPC bar codes and can be scanned with most mobile devices.
“In Japan and Europe, people use the cameras in their phones as a navigation device,” UDR Senior VP of Technology Dhrubo Sircar said when the bar code initiative was introduced. “They see something of interest, point the phone, and related information appears on the cell phone screen. We believe that U.S. businesses and consumers will come to rely on this technology as well, and when they do, we plan to be ready,” he said.
“By combining this technology with geographic positioning system capabilities, we can offer customers and prospects instant directions to our UDR communities. This not only makes shopping for an apartment much easier for prospects, it also enables us to track the effectiveness of our print advertising and sales collateral,” he said.
A link to the UDR.com Web site, an apartment-related message displayed on the screen of the mobile device, salesperson contact information and a dial-ready phone number are just a few of the mobile marketing QR bar code tactics that UDR is using to increase its online lead stream.
Also in April, the company launched the multifamily industry’s first mobile phone application — udrapartments.mobi — that, along with its iPhone/iPod compatible site, allows apartment searchers to use a mobile device to place an apartment on hold any time, from any place.
The application couples front-end apartment search and online reservations processes with back-end systems to provide real-time apartment pricing, confirmed reservations and forward prospect information directly to a sales associate.
More technological advancements are on UDR’s virtual horizon. The company is working on cell phone speech recognition solutions to make the apartment search process using a mobile appliance even easier.
“These efforts are paying off. We are forecasting a 158 percent increase in year-over-year organic search engine visitor traffic to UDR.com this year,” Davis said recently. “In 2008, UDR.com is expecting over 1.6 million unique visitors, which is a 100 percent improvement over last year’s Web site traffic.
“In addition, we’ve made great strides in reducing advertising and marketing costs through innovation,” Davis added. “Since 2005, our annualized marketing costs per unit have dropped nearly 40 percent, from $155 in June 2005 to $95 in June 2008. We’re able to save about $2 million in advertising costs alone.”
At the close of Q3, UDR CEO Tom Toomey reported that marketing costs continue to decline as the company sees more and more traffic coming from Internet sources. “In September, we saw 55 percent of our move-ins originate through the Internet. This is up from 43 percent last September. Our Web site is on pace to have 1.6 million unique visitors this year. This is roughly double what it was in 2007,” he said during the REIT’s Q3 earnings call.
Meanwhile, Equity Residential, the largest apartment REIT in the country, has completely overhauled its apartment search site, equityapartments.com, and is in countdown mode for the launch of the remodeled version. The creation of the new customer-focused apartment search site, which can be reached both through organic search engine referrals and EQR’s corporate Web site’s apartment search link, began around three years ago, around the time EQR purchased the Lease Rent Optimizer (LRO) source code from Archstone-Smith. Under the direction of EVP of Operations David Santee, EQR made a number of changes to the management tool the company uses to price its apartments to tailor it to the REIT’s, topping off the technological makeover of EQR’s operating platform.
When the back end technology update was completed, the time had come to address the out-dated front door to the site where apartment seekers could search for a new home. Now, after years of overhauling the operations engine that powers it, EQR is ready to unveil the new apartment search site that puts the potential renter in the driver’s seat.
Because apartment owner/managers like EQR, basically are in the retail business, the main idea of the new portal is to turn the transactions over to the customers, putting them in control of when and how they pay their rent, how they want to give notice or renew the lease, explained Rick Blair, EQR assistant VP of interactive marketing, a position he has held since late 2005. “They feel empowered. They’re controlling their lives because they’re controlling the experience and that’s very important,” said Blair, who is responsible for the company’s Web sites, online advertising, search and email marketing and web analytics.
So the research component of the project was focused on what EQR’s target user was looking for in the way of a satisfying online apartment search experience.
“If you’re going to build something for someone, don’t think you have the answer. Go out and ask that individual what the answer is,” said Blair, who worked with clients like Kraft, Coca-Cola and JC Penny during his previous job with digital marketer Avenue A — Razorfish, reciting his favorite marketing mantra: “Rule number one: Know your user. Rule number two: You are not your user.”
A proponent of ethnographic research, Blair explained that the technique involves asking questions that are often prompted by those individuals themselves. Initial research indicated that the three biggest concerns of the apartment seeker were location, the number of bedrooms and the price, so that’s what the new site offers upfront, according to Blair, leaving the amenities and other such ancillary information to later in the search.
The holistic research method also demands fieldwork. “As we got closer to a working product at the end of this past spring, then we could actually take it back out into the field and test it with real prospects, and ask them if it works and if it’s doing what they expect it to do and then continue to move forward and wrap it up,” Blair said of the site that’s almost ready for the public to give it a try.
Currently, the newly remodeled Web site is view-able on the company’s intranet, which means it’s around 9.5 on a 10-point completion scale, the brand strategy expert said. A pause on the REIT’s intranet gives the employees a chance to get comfortable with the new format. “And we can start to iron out what few bugs may remain, understanding that the site, in and of itself, has been tested many, many times over and, from that point, the green light goes on and you launch the site,” said Blair in mid-October, estimating that the company was a few weeks from the beta-testing point.
And, even then, the new apartment shopping site will quietly make its way towards replacing the old site as seamlessly as possible, likely starting with an icon of some sort — a starburst or a blurb or a button up in the right-hand corner of the current search home page — that invites folks to take a peek at the Web site to come.
The ultimate goal of the extreme makeover, now that the engine has been installed, involves another three or four years of technology hurdles and operating goals enabled by technology, Santee explained, adding that the road map to the Web site’s future includes creation of paperless resident folders and other environmentally responsible activities.
The prospective renter who visits EQR’s overhauled apartment search site ultimately will be able to not only check online availability, which already exists on the company’s current apartment search site, but also run a credit report, qualify him or herself and take an apartment off-line and pay a holding deposit and an application fee, although the electronic signature feature is a bit down the road and probably won’t be available until late next year or early 2010, predicted Santee.
“But, once you’re approved, you will immediately transfer to the resident portal and pay all your move-in money upfront and see what’s going on in the community,” he said. And, Blair added, customer- generated activity “ranging from everything from You Tube-type videos through user-generated content and everything in between,” eventually will be woven into the fabric of the Web site.
“This ultimately creates a win-win for us because it’s completely transparent and you let the customer do all the work. There’s a lot of work to do before we get there, but it’s exciting,” Santee said.