Four Multifamily industry leaders convened on June 8 at NAA Apartmentalize in Atlanta, GA for a renovations panel session to discuss reducing the unknown and unexpected during the renovation process.
Brad Chandler, SVP of Sales and Operations at FacilGo moderated a panel made up of Daniel Kughen, SVP Construction and Facilities at The Barvin Group; Kyle Smith, SVP and Managing Partner at Guardian Construction; and Mike Gorman, Division President – Indianapolis Division at Edward Rose & Sons.
To Renovate or Not to Renovate: That is the question
There are many factors that play into the decision making process when it comes to renovations. Return on investment, rising interest rates, labor stortages, and supply chain issues. What factors were deemed most impactful by the panel?
Daniel Kughen indicated that several of their renovations have been put on hold due to economic factors such as higher interest rates, the need for more upfront funding, and uncertainty in rental rate increases. The increase in labor costs and shortage of maintenance staff due to transitioning to skilled labor positions for better pay are additional factors they face.
On the other side of the coin, Mike Gorman cited that Edward Rose & Sons is self funded, so they are moving forward with their very robust renovation program, however, they sometimes need to re-prioritize certain projects. Edward Rose & Sons is still seeing rent increases and doesn’t see that changing in the near term.
From the General Contractor perspective, Kyle Smith indicated that labor shortage is not an issue for them like it was a year ago. He did state they are paying more for skilled labor, an increase of up to 10% over the last 3 years.
How the Approach to Renovation Has Changed Over the Last Three Years
According to a poll taken during the session, 35% of attendees said they have changed their renovation approach over the last three years by conducting early walks and purchasing, 22% said they haven’t made changes, 16% stated they started using technology, while 8% respectively said they started managing inventory and outsourced total renovation. 11% indicated they have stopped renovations all together.
To learn how to simplify your renovation planning process, check out FacilGo® Capital & Renovations. Our all-in-one solution can help you manage your planning and execution while maximizing efficiencies for both multifamily and single family portfolios. Spend more time focusing on your residents and less time focusing on renovation uncertainties.
If you are interested in learning more about FacilGo’s solutions, contact us to set up a time for a discussion and a demo.
Stay tuned for Part 2 of this 3-part series, where we discuss tools to help your renovation process.
