Multifamily construction is a big market that continues to grow. Most building materials manufacturers aren’t aggressively pursuing multifamily and don’t know how.
Manufacturers believe if a multifamily project uses their type of product, such as windows, then they will naturally get some of the sales. They probably assume that the sales will generally fall in line with their market share.
Four reasons why multifamily construction is a two headed monster
1. Commercial or Residential?
Multifamily can be constructed using either residential or commercial practices.
Residential homebuilders regularly construct basic multifamily structures such as a duplex. Residential builders can go from a simple duplex up to a multi-story apartment building. This type of sale can be reached through normal homebuilder sales channels.
High-rise multifamily construction is typically going to follow a traditional architectural specification selling process. This is no problem for manufacturers of commercial building products who already call on this channel.
The challenge is for manufacturers of residential products, especially interior products who probably don’t call on commercial multifamily. There are tens of millions of multifamily units and they all have toilets, faucets, sinks, closets and more.
2. High End or Low End?
Wealthy boomers are choosing maintenance free multifamily and they are willing to pay for high-end features. On the other end are the many lower cost rental units where volume can be high with lower profit margins. Much like selling to the largest homebuilders or big boxes.
3. Keep or Flip?
Developers who plan to quickly sell the building typically want the lowest cost products unless it is a high-end property. There are also firms who are large multifamily owners. Owning rental properties is their business. For many of them durability can be an important part of their product decision.
The long-term durability of a residential building product is usually not a feature that is promoted. Enhanced durability may be an opportunity for a residential manufacturer.
4. New or Repair/Remodel?
There is both a market for new and for repair/remodel in the multifamily market and they each require a different approach. Multifamily owners have lots of repair replacement needs that can be managed by a facility manager who is usually an untapped market for residential manufacturers.
How to grow your multifamily sales
Learn About Multifamily.
Study the market, learn how your product gets selected and decide if multifamily is worth a serious effort. Here are a number of resources. I would start at the top and call on the largest multifamily owners, architects and contractors.
Here’s a list of the Top 50 Apartment Owners
The Top 50 Apartment Management Firms
Top Multifamily Architectural Firms
The Multifamily Association
A List of Meetings and Conferences
The Leading Multifamily Publication
Appoint a Lead Sales Person.
If you decide multifamily is an opportunity for you, hire a sales person whose total focus is multifamily. Have him start at the top, with the largest owners, managers and architects.
If smaller multifamily is an opportunity for you have him work with marketing to develop to develop programs that can be implemented by your existing sales force.
Everyone needs a roof over the head. Many people can’t qualify for a mortgage or chose multifamily. Its a big growing market that most building material marketers are missing.