It is a cold rainy day in Portland back in late 2013. Capstone Principal Chris…
It is a cold rainy day in Portland back in late 2013. Capstone Principal Chris Nelson and Asset Manager Stacy Blanton are working through plans for the company’s latest multifamily development on a 2.7 acre property on Northeast Broadway at 33rd in Portland’s inner eastside. Located at the center of five historic eastside neighborhoods, the Grant Park site will transform from industrial property for the better part of the previous 100 years into mixed use luxury apartment homes for hundreds of families and individuals anchored by the wildly popular and quickly expanding New Seasons Market. While the location, surrounding amenities, and plans are promising, the Portland multifamily market is surging with new development coming out of the Great Recession, and Nelson and Blanton are exploring unique opportunities to find a competitive edge that will enhance the property even further, an approach that has helped Capstone maintain its position as the largest commercial developer in Portland for most of the past decade.
Chris Nelson, Capstone Principal
They turned to Sce Pike, the founder of design and technology company, Citizen, to discuss strategies for making Capstone’s next apartment community smart. At the time USB outlets were piquing interest of developers, so Pike did some research, as USB outlets were not exactly smart technology. What she found was a fast evolving IoT (Internet of Things) industry that had yet to effectively tap into multifamily housing. Pike saw an opportunity and took the lead into founding what became a leading smart apartment IoT company named IOTAS.
“As technology changes and evolves, so should the property and the resident experience. Nobody wants their property or devices to become obsolete.”
There’s always a first. Sometimes early-adopters need another set of eyes to peer into the future and get a sense of where they should be going, no matter how bumpy that progress may be. In the end, Capstone’s commitment to wow consumers, build value for their investment and stake a leadership position for an industry was the right combination to drive innovation, no matter how long the road. Capstone chose this road at the onset of the Grant Park Village’s Henshaw phase, and with the completion of Quimby, its second Phase, and the now bustling development, the benefits are bearing fruit.
Home automation had been in its infancy for single-family homeowners, but the technology wasn’t quite adopted nor scaled for a multi-tenant environment. In 2014, IOTAS developed a premier smart home technology platform that delivers a fully-connected, smart home experience for residents and property managers that integrates IoT technology directly into multifamily units. Their first client was Capstone Partners.
“We were, in essence, their research and development facility. Lots of bumps and bruises!” laughed Blanton. IOTAS set up their first office with 5 employees in a one-bedroom apartment in the new 211-unit Grant Park Village community in Northeast Portland, developed and owned by Capstone. “We were their Microsoft Garage! They were testing out all these smart devices, allowing us to be part of the process, while also observing the property management team and their day to day as we knew IOTAS had a concept to help create greater efficiencies for on-site teams as well.”
Being hands-on led Capstone to truly understand the scope of the opportunities at hand, while providing input about what would be helpful to them as an owner.
Stacy Blanton, Asset Manager, LinkedIn
The IOTAS platform is robust, yet simple in its impact within a multifamily community. Each apartment property, whether new construction or retrofit, becomes outfitted with a smart thermostat, lock, light switches, dimmers, sensors, outlets and a Hub. All devices communicate with each other so the resident has a plug-and-play ready environment upon move-in with built in automation known as SmartStories. Once the resident moves in, the SmartStories app is downloaded and a custom floorplan view pops up. The tenant can control each device through this one app as well as utilize an automation tool which allows the user to create a lifestyle for their day to day with stories like Welcome Home, Good Night, Movie Mode, and more where a sensor triggers behavior with a cascade of events following. The apartments are also designed for voice control, custom to each floorplan, and set-up takes about 30 seconds.
This entire set-up allows the resident to control all lights, thermostat levels, TV, curling iron and more from the app, voice or automation tools. With this software platform, each apartment and community will also evolve with technology over time.
“As technology changes and evolves, so should the property and the resident experience. Nobody wants their property or devices to become obsolete.” Some future integrations will also include, “being able to have auto-fulfilled household goods based on behavior and usage is one thing you will see soon. Integration with transit like Uber and delivery services are other integrations targeted in the near future,” said Pike.
By May 2016, Capstone was renting apartments with a new technology that was still in beta mode. “Honestly, I have no idea what we would have done without Capstone’s blessing,” said Pike. “But they were, and still are, incredible partners that allowed us to field test on site so that we were able to quickly install numerous smart devices while testing the streamlining of the set-up and deployment process and get practical feedback.” The goal was to establish a fully dialed in IoT platform for their properties where the future opportunities had enormous upside.
Capstone had a vision that, if this worked, this premium offering would be a market differentiator that would attract new tenants at premium rents, while lowering utility and management costs. Residents now had smart home technology as they move-in that is managed from one app, voice control, and automation with no set-up whatsoever. “It was a very compelling value proposition for our residents,” quipped Chris Nelson, Principal of Capstone, “but we believed in Sce and her vision. She secured a great start-up team as well. We wanted to see where this could go, not just for the residents but also how this platform would impact our property management.”
The IOTAS property management dashboard (which is also integrated with Property Management Software platform, Yardi) is of incredible importance to the Capstone adoption of this technology. They’re able to control common areas and vacant units from one interface, which allows leasing agents to prep units remotely and show potential renters the experience upon walk-throughs with automation. This also allows the set-up of Good Night rules for the property, which allows all units to shut off at the plug load level with the ability to rotate lights on and off in vacant units overnight, and then turn on early in the morning. When residents move-in and move-out, the property doesn’t need to manually reset devices as all turnover is automated and occupied units become vacant units and vice versa. They can also set high or low thermostat and targeted humidity levels for all units. Numerous properties have reported labor savings averages of nearly 200 hours per year and utility savings nearly $30-$35 monthly per vacant unit.
Grant Park Village initially launched with a selection of smart apartment homes. “We took a risk to be an early adopter of this cutting-edge platform and partner with IOTAS and bought into the vision. We see this technology as the future, and we wanted to foster the development without committing the entire property at that time, for obvious reasons,” shared Blanton. Fast forward two years, $25-$35/unit monthly rental premiums at Henshaw, and now Grant Park Village’s second phase, Quimby has renters moving into a fully equipped, 167 door smart property beginning in July 2018.
“With Quimby, we integrated this technology into all units and common spaces during construction. It was simple and makes all the sense in the world with the positive response from renters combined with the ROI we’ve had from our initial property,” said Blanton. “We also created a marketing and brand strategy around the smart technology with IOTAS and our on-site manager Avenue5, called SmartApart,” said Blanton. IOTAS has learned over the years that properties need to market and brand their properties effectively, while also training the leasing staff about best-selling practices and the importance of the smart technology to the bottom line. “It’s a small learning curve but works out well when done correctly. Being a trusted resource is very important,” said IOTAS’ VP of Marketing, Matt Greene.
“There has been a fantastic hands-on training and engagement experience with the IOTAS team. The on-site team is training how best to sell this technology and can control vacant units where we can set up automation stories like ‘Welcome Home’ when potential renters walk through. It’s an incredible wow factor when you can also blend with Amazon Alexa for voice control.” said Blanton.
Quimby has already been outperforming competitors in their pre-leasing efforts. The village features an outdoor community with a gas fire pit and lounge, a bike repair shop and a pet spa with a grooming station. It sits at an intersection that handles 30,000 cars per day and houses New Seasons Market on-site, providing residents with access to fresh, local produce. Capstone expects Grant Park Village to be the model for their multifamily communities moving forward.
“We have had some very successful properties in the Portland Metropolitan Area over the past five years and have high hopes for Quimby because of the location, the design detail, and the evolving Portland market,” Blanton said of Grant Park Village’s newest community. “IOTAS helped us take a few steps further with this property than we knew we could five years ago. We are excited about how this will evolve both from the perspective of a resident amenity and a property management tool.”
As smart technology and smart connected homes become more of the norm, Capstone is placing bets that the early adopters will reap the benefits by laying the infrastructure early while allowing their properties to evolve as the technology improves, changes and integrates with other services. The resident experience is incredibly important for Capstone and the desire to provide the experience of the future is a bet they’re willing to place today.