Over the past decade Multifamily investors had it easy; interest rates were nearly zero, debt was widely available and cheap, capital poured into the space compressing cap rates, fundamentals were strong etc. It was nearly impossible not to well. The key to success was just being in game and outperformance meant not selling too early.

That’s quickly changed. We’ve shifted from an asset market to an operator market, where success requires buying assets at the right basis and executing well.  

Outperformance, going forward, will require differentiation. Packy had a great post on differentiation, positing that in a future (dominated by AI), “the value of things you can teach or copy trends towards zero, and the value of fresh new ideas increases.”

I believe the same to be true in the multifamily space, which is dominated by copy-cat operators/developers. Look at any multifamily project and you see generally the same floor plans, unit interior design, amenity set, branding, and online marketing approach. I get it. A lot of things are done a certain way because it works and is proven, but others do things because that’s the way it’s always been done or that’s what everyone else does.

That’s not going to cut it over the next decade.

At Atlas, we buy, develop, and operate apartment buildings that we can own for the long-term (10+ years). We take both a long-term and differentiated view.

So what does that mean?

We view creativity and our willingness to test and fail is our moat.  We don’t make decisions based purely on return-on-cost metrics on a spreadsheet and we don’t operate within industry norms.  

We recently completed construction and welcomed first residents at Standard Assembly, a 310-unit multifamily community in the Wedgewood-Houston (WeHo) neighborhood of Nashville. It’s an opportunity zone development we intend to hold for 10-15+ years located within a competitive market surrounded institutional-quality projects. It’s hard to stand out, but we’ve made a number of small decisions which provide a competitive advantage.

Retail Curation

We signed a lease with a local hybrid retail concept called Moto Moda, combining throwback wood-fired pizza and a full bar with a motorcycle-centric theme. They’ll be occupying an old warehouse space in the back of the property. The cost of the shell work and TI needed to bring the structure back life isn’t justified purely by the retail rent. However, although it’s tough to quantify, I think it’s a worthwhile investment for several reasons.

• The tenant will activate an otherwise dead area onsite, overflowing into the public spaces and creating a vibrant “living alley”. The residential units around this space become more appealing, demanding an amenity premium.
• The tenant’s brand aligns with ours and has an overlapping target consumer. The space serves as an amenity for our residents; it’s where they get coffee in the morning, hang out in the afternoon, and grab a drink in the evening. People who live at Standard Assembly hang out in places like Moto Moda.  
• The tenant is well-known locally and has a lot of credibility. Their presence at Standard Assembly signals to the market that this is a great location for any tenant with a similar brand focus.

On paper the lease doesn’t make sense, but we take a hospitality mindset to retail curation, valuing concepts that activate spaces, align with our brand, and set the tone for a project.

Marketing / Resident Events

Marketing and resident events are controllable expense items that can be hard to quantify. We largely ignore the $/unit industry norms and focus on creating a great resident experience and cultivating a sense of community, which results in a strong reputation and increased demand and resident retention.

At Standard Assembly, we give each new resident a custom move-in gift curated with local goods and items tailored to the resident. If the resident has a dog, we give them dog treats from a local pet store and a pet bandana. Each month, we aim to surprise & delight at least one resident with an unexpected gift such as champagne and flowers for a newly engaged resident and a gift card to a local restaurant for a resident who is hosting a friend for the weekend. On birthdays, we give cookies from a local bakery. It’s amazing how much residents appreciate small, unexpected gestures that show we care.   

We also host weekly events, utilizing residents whenever possible. For example, we recently had a floral arrangement class, partnering with a resident who has a side business making decorative arrangements.  

These events are fun and enable the team to get to know residents personally and the residents to get to know each other. This results in a strong sense of community.

There’s a quote from Daniel Humm (owner of Eleven Madison Park) which I absolutely love. It’s from TED Talk where he shares a story about a hot dog which showcases what makes great hospitality.

When talking about his diners, he says, “make them feel seen, make them feel welcome, and give them a sense of belonging. The food, the service, the design, they’re simply ingredients in the recipe of human connection.”

I believe the same applies for multifamily communities. Aim to make the residents feel seen via personal touches and create a sense of belonging through everyday service, event curation, unexpected moments, common area design, and retail curation. These are the ingredients which make up a great place to live.  

Project Design

Standard Assembly is located in an emerging neighborhood with unique character and history. From day 1, we aimed to embrace and infuse that character into every aspect of the project.

One of our 10 project commandments was “Embody and embrace the character of the neighborhood.”

We accomplished this by taking a hyper-local approach to design. We worked with a branding agency located just down the street from the property to ensure the brand was authentic. One of our architects’ offices is located adjacent to the property. We’re working with local artisans to curate the various common areas, highlighting local goods and artists. We’re decorating the pet wash with professional photos of resident’s dogs.

Everything is done with intention and attention to detail. Although most residents won’t recognize every little detail, I’m convinced it makes a difference and will shine through over time.

These are just a few of the things we’re doing to create a differentiated community

As Packy notes, “it’s easier, even fun, to do something hard when you believe you’re doing something that no one else can. It’s really hard to go to work every day to build the same thing, or an even worse version, of what others are already building.”

I couldn’t agree more.