Amenities Deep Dive Part 2

The Real Estate Espresso Podcast

Amenities Deep Dive Part 2

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Amenities Deep Dive Part 2

Welcome to the Real Estate Espresso Podcast, your morning shot of what’s new in the world of real estate investing. I’m your host, Victor Menasce. Last week we started a mini-series on amenities, and we took a short break from the mini-series to cover a few consequential items from the World Economic Forum, which is still underway in Davos.

There’s probably still more that we could be covering from Davos, but there’s only so many things you can cover in a daily show. After all, this is not my full-time job.

The deep dive into amenities was based on the outstanding work by apartment owner and operator Greystar, the largest owner and operator of apartments in the US with over 100,000 units in their portfolio. Our firm is working with Greystar on our own active adult project in Spokane, Washington. And if you want to learn more about that amazing project, come and register for our portal at wisetreecapital.com and we can have more to share about the project. And this is not a solicitation for investment. Of course, any investment would be by prospectus in compliance with SEC regulations.

Greystar recently published their latest amenities and apartment features market study. It’s based on a year-over-year survey from 2023 to 2024. Now, on Friday last week, we talked about the overall trends in amenities. On today’s show, we’re going deep into one aspect, and over the next several days, we’re going to cover storage, technology, security, kitchens, social space, fitness, e-commerce, and parking. Today we’re going to cover storage, security, and technology packages, and what’s expected in a new modern building.

The report from Greystar provides a clear data-driven view into how tenant preferences are evolving, and the findings carry important implications for developers and owners, as well as investors making capital allocation decisions. The study tracks year-over-year changes in renter interest, their willingness to pay for amenities across three broad categories: storage, sustainability, technology, and security.

One of the strongest signals in the report is the continued rise in demand for practical storage solutions. Interest in creative storage features increased year-over-year, led by in-unit gear walls designed to store bulky or dirty equipment. While the absolute percentage change appears modest, the direction is consistent and meaningful. Renters increasingly value functional space that supports active lifestyles, hobbies, and hybrid work patterns.

Traditional rentable on-site or off-site storage did see a decline in interest, and there’s minimal rent premium growth associated with that. That means renters prefer storage directly in their living space rather than ancillary storage offerings. Now, that’s counterintuitive. Some people want to get rid of clutter. Going down the hall to a storage room to access a frequently used item is inconvenient.

The report also highlights a broad and notable decline in enthusiasm for sustainability-related amenities. All 15 sustainability attributes measured experienced a decrease in renter interest, as well as a reduction in the rent premiums. Perhaps the most striking drop is in the perceived necessity of community recycling programs, historically considered a baseline amenity.

Expected rent premiums for sustainability features fell sharply across the board, averaging a 24% decline year-over-year. Energy-efficient lighting, high-efficiency appliances, renewable energy systems, and green certifications all saw meaningful reductions in both interest and pricing power. The data suggests renters increasingly view these features as table stakes rather than differentiators, or they just might be prioritizing affordability over environmental considerations in a higher-cost living environment.

The most decisive positive trend in the report appears to be in technology and security features. All of these gained popularity across every managed or private Wi-Fi network that follows residents throughout the community showed the largest increase in demand, with the same security features associated with your own dedicated Wi-Fi. Smart locks, smart thermostats, community Wi-Fi in common areas, controlled access systems, video doorbells all experienced strong gains in renter demand.

The rent premiums associated with those features remain relatively modest. Their growing status as necessity items suggests they’re becoming core infrastructure rather than optional upgrades. The tech packages include facial recognition for building access, AI-based vehicle and license plate recognition for parking, programmable temporary access for cleaning staff and for guests. These are all being embraced by residents.

A simple and clean method for communicating with building management through a smartphone app removes another barrier. It’s easier to issue a trouble report with a text-based message rather than looking up a phone number, calling, waiting for the phone to ring, and then finally leaving a voice message.

Taken together, the findings point to an increased importance in renter psychology. Renters are prioritizing convenience, connectivity, and day-to-day functionality over aspirational or values-based amenities. Technology that reduces friction in daily life is absolutely gaining ground, while sustainability features are losing pricing power unless absolutely mandated by regulatory bodies.

For developers and owners, the implication is clear. Capital should be deployed towards amenities that enhance usability and digital connectivity. Those sustainability investments should be underwritten conservatively and justified through operating efficiencies rather than rent premium alone. Storage should be rethought as part of unit design, not an afterthought.

Ultimately, the report reinforces a central principle of real estate development: amenities must solve real problems for residents, not just reflect the last decade’s assumptions.

As you think about that, have an awesome rest of your day. Go make some great things happen, and we’ll talk to you again tomorrow.

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