Centerspace Beat Its Own ROI Projections With SmartRent

THE CHALLENGE: Navigating Cold Weather Risks and Operations

Operating a portfolio in regions prone to harsh winters presented Centerspace with a persistent challenge: mitigating costly damages from frozen and burst water lines.

"If a resident in North Dakota goes on vacation and turns their heat off for a week because they don't want their heating bill to be too high, their pipes are going to freeze and burst," said Centerspace Project Manager Michelle Hemming. "Sometimes we wouldn't get into vacant homes for a couple of days after move-out and find the thermostat turned off. That's all it takes for pipes to freeze and crack during a cold winter."

Beyond these environmental risks, Centerspace also grappled with industrywide inefficiencies, notably the time-consuming process of key and lock management.

"We needed to be more efficient," said Hemming. "We could have multiple units being turned in a single day at one community, which means we have painters, cleaners and carpet cleaners on site from literally the minute we open the door. With multiple turns across shared sites, a leasing professional could spend the first hour of the day checking out keys to vendors. While they're doing that, they're not assisting residents or talking to prospects."

Centerspace Property Manager Gail Renwick, who manages four properties in Bismarck, North Dakota, estimates that rekeying a single residential door took a considerable 45 minutes, a task her teams did twice with every home turn.

"We were rekeying doors at move-out and again at move-in, which takes a ridiculous amount of time," Renwick said. "We needed a solution that absorbs that process and allows us to focus on other tasks so we could expedite our home turns."

The process inefficiencies were exacerbated by Centerspace's multi-site staffing model, which required a team member to be physically present to manage keys.

"Our shared team member structure is different today than it was two years ago when we started looking at potential solutions," said Sue Picotte, Senior Vice President of Asset Management and ESG for Centerspace. "If those communities are 15-20 minutes apart and team members had to drive across town every time they needed to manage keys, it was incredibly inefficient."

Hemming said solving the lock issue came down to three central questions: how can we get lock changes done faster? How can we make it easier to find the keys? How can we streamline and create time savings while also maintaining our properties in a better way?

THE SOLUTION: Centerspace Deploys SmartRent Locks, Thermostats and Leak Detectors

Centerspace conducted exhaustive research of the solutions available on the market, screening each potential solution against a list of product requirements. Centerspace insisted the technology integrate with its property management software — OpenAPI was the baseline.

"We looked at several different vendors in excruciating detail. I have an Excel workbook that would make your head spin," Hemming said. "We wanted to ensure that access, permissions and alerts went to the right people, and there is a lot of minutia involved in that process. We wanted some things to be automated but still have a user-friendly interface that gives team members and residents more convenience and efficiency."

Centerspace prioritized technology implementations that would strategically support its multi-site teams. Remote capabilities were essential to improve logistics and eliminate unnecessary legwork. Accommodating resident technology preferences was also a priority.

"There's a growing renter expectation regarding in-home and common area technology," Picotte said. "We wanted to feature leading technology that works for us, gives us that 'wow' factor and translates to both cost savings and revenue."

The Right Fit for Every Property

Ultimately, Centerspace selected SmartRent as its smart home technology partner, recognizing its comprehensive capabilities and ease of integration with existing software infrastructure. Centerspace initiated the implementation with a successful pilot in Minneapolis as part of a three-phase rollout. To date, Centerspace has deployed SmartRent solutions at 55 properties, including more than 11,000 smart locks, more than 9,000 smart thermostats and more than 69,000 leak detectors.

"The leak sensors are critical in our markets, so we went all in. If there is water running through it and it could leak, we put a leak sensor there," Picotte said. "We already had data on the number of water leaks at each asset and losses they had, so that's something we really tried to solve for."

SmartRent surveyed each community to customize the installation to meet the unique needs of each asset and assigned a remote project manager who oversaw the entire roll-out and training process.

THE RESULTS: SmartRent Mitigates Water Risks, Drives NOI Through Time Savings

SmartRent's smart lock software compatibility with Centerspace's preferred community access control technology was a key factor in its selection, delivering almost immediate operational benefits.

"Our community access control software and the SmartRent smart lock system work so well together that we can easily and seamlessly provide access to a vendor or emergency responders, even after office hours," Picotte said.

Every day key management was also drastically simplified.

"Now, we set up a vendor in SmartRent and assign the work order for the turn. When we verify it's complete and close the work order, that code is disabled," Hemming said. "That piece certainly wasn't in the underwriting from a time perspective, but it is a huge time savings."

Resident adoption and usage of the new technology exceeded expectations during the first two years of implementation.

By the Numbers

• 87% of Centerspace residents are using the SmartRent app
• More than 340 Centerspace associates had been trained on the platform
• 59,026 work order access codes had been submitted through the SmartRent app
• Since Oct. 2023, 1,446 leaks have been detected and mitigated
• Among 23 properties with water damage mitigation data, water damage losses decreased by nearly 50% year over year since the SmartRent detection installation
• Almost 30 low-temperature detections have been automatically reported in residential units and resolved already this winter
• Leak mitigation savings per property were estimated at $9,500 in Phase 1 and $133,000 for Phase 2

Centerspace included a smart home premium in underwriting for SmartRent. The overall ROI has surpassed initial projections.

The Impact Goes Beyond the Numbers

"That's just on the cash. That doesn't include the time savings, the efficiency savings or the productivity increase," Picotte said. "It doesn't include the loss reductions through early leak detection and low temperature alerts. The total impact of the deployment hasn't been fully quantified, but it has been significant."

Building on this success, Centerspace has already initiated Phase 3 of the roll-out, with a continued focus on supporting its properties with streamlined operations and enhanced risk mitigation.

WHAT SMARTRENT SOLUTIONS DO FOR CENTERSPACE

By combining SmartRent's software with smart locks, thermostats, and leak detectors, Centerspace equips its teams with the necessary tools to safeguard assets and boost operational efficiency.

Smart Locks:

• Keyless access management for residents, vendors and staff from any location
• Seamless integration with community access control software for after-hours entry
• Automated work order access codes that disable upon job completion
• Reduced time spent checking out physical keys, freeing staff to focus on residents and prospects

Smart Thermostats:

• Remote temperature monitoring to prevent frozen pipes in vacant units
• Automated low-temperature alerts to flag at-risk units before damage occurs
• Helps maintain property condition standards during seasonal transitions

Leak Detectors:

• Continuous monitoring of any water-bearing systems throughout each unit
• Instant alerts to enable rapid response and minimize damage
• Proven reduction in water damage losses, nearly 50% year over year in properties with detection data