You have done your best to plan rooftop amenities that will be profitable and bring you a return on your investment. You have a strong theme in place and leverage your rooftop amenities to differentiate your property from the competition.
But how do you know that your rooftop amenities are “working?”
The primary measure of how well your rooftop amenities are working is whether or not they have helped you meet your goals and metrics for success established at the beginning of your development process. To make your project stand out, these success metrics should be unique and specific.
However, there are some standard measures of success that can be applied to every multifamily development project. These key performance indicators, or KPIs, will help you evaluate how your rooftop amenities contribute to a more successful multifamily development.
1) Occupancy Rate
Compare your current occupancy rate to the market average (which is usually in the upper 90’s). With successful rooftop amenities you should be equal to or above the market average.
2) Tenant Turnover
Rooftop amenities should increase your tenant retention rate as renters who spend time in the space make friendships that tie them to the property. If you are beating the average tenant turnover (12-24 months in urban markets), you can attribute this to the success of your rooftop amenities.
3) Days to Lease
Rooftop amenities should make your property red hot in a hot market. If your average days to lease is 2 weeks or less, your rooftop amenities are doing their job attracting tenants to your property.
4) Net Operating Income
If your rooftop amenities are popular enough, they can become part of your strategy to increase net operating income. You can rent out certain areas, such as private poolside cabanas, or hold sponsored community events to pull in some extra revenue. Rooftop amenities that are working don’t just increase rent, they bring in their own income as well.
5) Repairs and Maintenance
If you have to perform regular repairs and maintenance of your outdoor amenities, consider that a good thing. It’s a sure sign that people are using and enjoying the space. As long as you are keeping up with regular maintenance, tenant use is a key indicator of the popularity and desirability of your rooftop spaces.
6) Net Promoter Score
A net promoter score is a great indicator of successful amenities. Run a survey of your residents asking how likely they are to recommend your community to a friend based on the amenities. The percentage of promoters minus the percentage of detractors will land you with a net promoter score. A net promoter score of 0 is good because it means more of your tenants are fans of the amenities than are not. But if your amenities are really working for you, you should be scoring above 50.
7) Tenant Acquisition
Rooftop amenities should lower the average tenant acquisition cost. As mentioned above, they should cut down your days to lease. Additionally, they offer built in marketing collateral, for virtual or in-person tours, video and photo shoots, and a location for micro influencers to rave about on social media. A successful rooftop amenity space is something you can leverage and promote over and over again across multiple platforms without having to reinvest in new content.
8) Tenant Use
Tenant use may be the greatest indicator of rooftop amenity success. The key to many of the above indicators is the relationship between the tenant and the property, enhanced by rooftop amenities. If you can just get your tenants to experience the space, the rest can happen without much effort.
How do you encourage tenant use of the rooftop? Keep it open as long as possible, in the evenings and weekends, and throughout the seasons. There should be an uproar among your tenants each time you close the amenities for any reason. Make it comfortable for people and make it easy and convenient to locate. Hold community events there and make it a big part of your tenant’s experience and lifestyle.
You can assess how many of your tenants are using the space by taking a count at a community event or by conducting an online survey. Your goal should be to have as many as one person per unit experiencing the rooftop during their time as a tenant.
It can be challenging to design and properly execute rooftop amenities. But it’s easy to see how they can benefit your property. By measuring their performance and making adjustments as necessary, you can be sure you are taking full advantage of your rooftop amenities.