How to Find Hidden Revenue in Underused Spaces

How to Find Hidden Revenue in Underused Spaces

How to Find Hidden Revenue in Underused Spaces

by | Nov 7, 2022 | Lifestyle

By Michael Zuchelli and Andrew Meditz CEOs and Co-Founders, Elite Amenity Management

 As amenity managers, we’ve learned to look at amenity spaces a little differently. They aren’t just pretty extras or icing on the cake. On the contrary: A smart developer or property manager can find lots of hidden revenue in amenity spaces. To begin with, you need to understand how spaces are utilized, and which ones are underused. Then you can maximize the potential in every space.

We like to begin with data and analytics. Key fobs and entry cards gather information, and our proprietary tech lets us analyze it to see exactly how and when a space is used, and by how many residents. This takes a lot of the guesswork out of optimizing your spaces. If a space is underutilized, that shows up in the data. Then you can assess what changes might be optimal for your bottom line.

Here’s an example: Let’s say you have a gym space where you offer ten fitness classes per week. At the end of the month, the data shows that two classes are underattended. Cutting back to eight, with a focus on times where attendance is high, frees up that space for other, more profitable uses – and you can repurpose the cost of staffing, or add it back into the operating budget.

Take a look at hours of operation for any given amenity space, too. Key fob access data may show you that the pool, for instance, isn’t used between noon to four. To provide a life guard during that dead time isn’t worth the expense, and you can close the pool for maintenance during that time.

Another thing to ask is whether a single-use space could become multi-purpose. One of our buildings, the Denizen in Bushwick, had a 500-square-foot card room that was often empty. Meanwhile, residents who worked from home often resorted to using their wine cellar space as a makeshift meeting room; and we found that the conference room in the building was consistently booked. Accordingly, the card room was modified to a multi-use workspace. It was an inexpensive conversion that transformed a single-purpose space into a multipurpose one. And, because we’d looked at the numbers, we could be confident that the change made financial sense.

On that note, take a walk through your space and think about how daily life has changed for residents over the past few years. The truth is that working from home is probably here to stay. That might look like telecommuting a few days a week, having some meetings offsite, or adding a flex-work option to the mix. How is this trend affecting residents? Can you take a fresh look at your spaces and capitalize on this trend?

Ask yourself: what do the problems for residents working from home look like? In an apartment setting, the square footage for a dedicated home office can be tough to come by. Residents may be sharing space with family, or simply challenged by distractions that aren’t present in an office environment. When you’re working in your home space, that pile of unfolded laundry, that dishwasher that needs unloading, or that comfy couch you take Sunday naps on can rob you of much-needed mental focus.

The right amenity spaces can make those challenges disappear for residents. An added workspace or shared-office amenity in your building need not be elaborate or expensive to be effective. Sometimes, all a resident might need is a quiet space to make some calls. Meeting rooms and conference rooms can be created just by adding a table and chairs and a coffee machine. Coworking spaces can charge around $30 a day for a desk or $300 a month for an office. Compare that to a space that residents don’t have to leave their home building to use, that can be scheduled in their residential app, and many will consider a space-rental or amenity fee money well spent. Think big, but also think small: even an unused closet space can be repurposed as a “Zoom booth.”

Work aside, certain amenities spaces are always busy during peak night and weekend hours. Outdoor grills, bowling alleys, basketball courts, and golf simulators book to capacity for Friday and Saturday nights, as residents entertain friends in those spaces. And people are willing to pay a premium. A movie room or chef’s kitchen are other popular rental amenity spaces for entertaining or special events. Rooftop amenity spaces are a now-established success story of an underutilized space being transformed into a VIP amenity space for parties and entertaining.

Finally, there’s a hidden benefit to optimizing your amenity spaces, and it’s one that can really pay off over time. When you analyze how your residents use the space, and optimize for the uses that attract most residents, it can foster a real sense of community – and that leads to a higher renewal rate on leases. It just makes sense: Residents meet their neighbors at a pool party, become friendly, run into each other again at the rooftop BBQ, and before you know it they have forged a friendship. When the lease is up, renewal is a no-brainer, because all your friends live here, too. Communal events – whether that’s a DJ at a pool party on the weekend, or a Paint and Sip night on the rooftop – strengthen the community within the building, and we all know that in this business, that’s more important than anything else.