Case Study: REIT Improves Occupancy and Retention with Privacy Management as Incentive

Challenge

• Pandemic drives high tenant turnover
• Tough competition to attract/retain quality renters
• Earnings for REIT grew less predictable
• Millennials and Gen Z presented different affinities for incentives
  

Solution

• Privacy Bee for Business subscription added to incentives offered to renters
• Marketing on benefits of privacy mgt. produced and included in sales process
• Rental agents educated on privacy mgt. via Privacy Bee University

Benefits

• Increase in new leases signed over 18 months
• Retention levels improved
• Reduction in litter/direct mail
• Lower incidences of domestic disturbances and threats to children/teens
• Positive media coverage and increased brand awareness/reputation
• Restored shareholder value for REIT investors

CUSTOMER: A well-established Equity REIT managing a portfolio of investment properties across 5 southern US states. Their portfolio is comprised of affordable, multi-family housing properties valued at roughly $1.175 billion.

CHALLENGE: Market volatility following the destabilizing effects of the COVID pandemic spiked levels of tenant turnover.  Changes in employment and unprecedented migration patterns roiled the rental markets in many of the locales where the customer’s investment properties were situated.  The competition to attract and retain quality renters was a primary concern for this customer as the organization sought to return to stable occupancy levels and the resulting earnings predictability. 

The competition in many of the metro areas where the customer’s prime properties were located grew heated.  The cost of incentives in the form of rent rate reduction and other promotions aimed at attracting renters began to eat into profit margins.  Executive leadership of the REIT sought different perquisites and other incentives (besides rent rate reductions) that would represent a strong attraction to new renters.  Since many of their properties were already equipped with attractive amenities such as swimming pools, fitness centers and on-site retail shopping, the customer began seeking more innovative ideas.

Additionally, demographic and social shifts are changing the nature of property management.  The Millennial generation and Gen Z are pursuing home ownership at far lower levels compared to previous generations.  They are also far more interested in engaging services and experiences as opposed to physical products and objects than their older cohorts.  With these younger renters now entering the rental market, property managers are having to re-imagine how they market the advantages of living in their communities.

SOLUTION: Turning their focus away from physical incentives/amenities and toward services and other intangible value-added features, executive leadership engaged Privacy Bee for Business.  As part of new lease agreements, the customer began offering the Privacy Bee suite of privacy management solutions to every family as an incentive to signing a lease. 

The customer was able to market the Privacy Bee privacy management incentive in numerous ways which proved effective at capturing the attention of prospective renters and their families.  They produced promotional materials highlighting the benefits of protecting the privacy of one’s family, but also of living in a community where strong privacy management practices were applied to all renters.  These included:

• Reduction/elimination of solicitors like telemarketers, email spammers, and direct mail marketing (junk mail/flyers)
• Decreased potential for domestic disturbances via doxing – people moving to new housing after divorces, custody fights and to avoid other acrimonious former relationships
• Lower instances of identity theft and social engineering attacks like phishing, smishing and email scams
• Increased security for young children and protection against being targeted by sex offenders

All unit rental agents were educated about the growing imperative for privacy management, receiving free training via the Privacy Bee University.  This prepared sales agents to convey the value of this benefit included for all new renters.

Of course, the REIT management pursued other service-oriented incentives and amenities besides privacy management as part of a broad strategy to attract and retain renters. Taken together with other service perks such as discounts on housekeeping services, restaurants/cafes, digital media subscriptions and others, the Privacy Bee privacy management service offering proved to be a cost-effect and positive attraction for the REIT.

BENEFITS: As part of the broader strategy to offer services and experiential benefits to attract renters, the Privacy Bee privacy management service helped successfully increase the number of new leases signed.  After 18 months, the customer reviewed data which showed that long-term retention of renters was also improved.  These two metrics alone represented not only greater profitability and increased shareholder values for investors.  But they also resulted in a decrease in costs associated with tenant turnover.

The benefits of privacy management advertised to prospective renters also provided similar benefits to the peaceable operation of the housing properties by the REIT as well. 

• Less direct mail resulted in less litter on the property from unwanted flyers and junk mail
• Fewer instances of domestic disturbances lowered the frequency of incidents on the property and the resulting legal liability of violence
• Several regional business journals published articles on the innovative strategy being fielded by the customer which improved brand awareness and reputation in a competitive industry
• Word of mouth among young families helped drive additional new occupancy as the properties gained a reputation for being safe for children and teens