Here is some key information that security pros need to know to tap into the growing and lucrative multifamily market
- 9,800,000 apartment units are more than 40 years old.
- Explosive growth and radical changes are happening.
- Retrofits may be done in stages.
Market growth is reflected in the fact that just about every lock company sells multifamily products. Explosive growth of this market is expected to continue. Major players include Allegion, ASSA ABLOY, dormakaba and SALTO. Alarm Lock, Codelocks, Hager, Keyincode, Kwikset, PDQ, Proxess, TownSteel, and others also target this market.
Delivery times are a big issue. As one salesman stated: “I wish I had another factory to produce twice as many locks.”
The National Multifamily Housing Council reported 21.3 million apartments in the United States in 2022. Here’s the interesting part: 46% of these apartments were built before 1980. Many buildings are owner-managed, while others engage professional property managers. Smaller units tend to be mom-and-pop retirement income properties.
Although Real Estate Investment Trusts (REITs) and corporate investors are building many thousands of new urban apartments, millions of existing properties will also consider upgrades.
Tenant security is indeed becoming a bigger issue. Access control, fire safety, burglary prevention, personal safety, and disaster preparedness (tornado safe rooms) are top concerns for renters and landlords. Note that three of the five are lock-related.
Customer Motivation
The #1 owner motivation is Return on Investment. These apartments (and condos), whether new or old, live or die on low operating costs and high occupancy rates. Cost-containment and increased revenue are the drivers. If you focus on those two issues, you’ll talk their language. If you can demonstrate that a lock upgrade helps reduce costs or justifies increased rents, the owner will want to know how. Two basic areas, labor content and revenue, are worth exploring.
Labor content is a big deal. Significant savings can accrue to larger sites when tenant access in multiple locations or buildings can be controlled from a single manager’s site. Eliminating labor costs from managing and issuing keys or rekeying locks is another possible cost savings.
Revenue is driven by monthly rental fees and occupancy rates. Since every property is focused on attracting and retaining tenants, improved security and safety always improves the competitive position. Among millennials, only 26% feel secure in their apartment, while 72% were willing to pay more for improved security.
The economic viability of lock upgrades will depend on reducing labor content and/or improving income.
Upgrade Strategies
As an experienced locksmith, you already know that older properties hate to spend money and newer sites will have long budget cycles. Many do, however, desperately need security upgrades.
Lock work at older facilities tends to be handled by a member of the owner’s family, or a handyman. Larger facilities will have a maintenance man or staff that handles locks along with roof leaks, paint touch-ups, and other duties. Although door hardware tends to come from Home Depot or Amazon, you do have some advantages we’ll explain later.
Internal key control may simply be a rack of spare keys on hooks. Keying may be changed with each new renter, but often not. Offsite key duplication is a non-issue for the owner. He really won’t care if the tenant has extra apartment keys, and knows most won’t be returned. His primary concerns will be entrances or common areas.
New tenants often get existing keys or replacements copied at a hardware store, while larger complexes may have a key cutter on site. We’ve seen some property managers who used spare interchangeable cores for quick updates at every tenant change. This has been a rather efficient internal key control process.
Whatever the case, professional locksmiths may only be called on rare occasions. The service call is your opportunity to ask a few questions that can lead to a good upgrade and build your reputation. Here are some questions to explore:
- What security concerns do your tenants have?
- What kind of security or lock problems do you have?
- What electronic access control do you have at present?
- How are your keys, credentials, or codes managed?
- What areas need to be locked?
- What areas have high traffic?
- Are there environmental factors like weather or caustic atmosphere?
- Do you have a property-wide Wi-Fi network?
After each question, reflect the answer back to the site manager so he knows you understand his problems. As your customer discusses the issues, he or she will discover hidden security needs. Although we all have a tendency to immediately offer a familiar solution, it may not be the best one for the customer, or your most profitable in the long run. Ultimately, you do have a lot to offer.
Your advantages are that you can deliver a professional installation that improves the rental and property values; you understand the difference between consumer locks and encrypted commercial grade products; and you can also manage a migration through multiple upgrade stages.
Experts suggest that upgrades are often done in stages.
Properties with mechanical locks can begin by upgrading gates, exterior openings and common areas.
Stage two can be adding wireless electronic locks to apartment doors. These may be offline, or online, depending on Wi-Fi availability and structure.
Finally, third-party proptech integrations can offer advanced features, functions and amenities that increase net operating income for the investors. [1]
Don’t sweat migrating from existing gate or common area access controls. Multi-credential electronics are becoming standard practice. Most of today’s multifamily lock products can read RFID cards, fobs, wristbands, or mobile credentials. Some can also use Near Field Communication (NFC) common on college campuses. Fobs are available that support both BLE and RFID communication.
Another reason for multi-credential devices is that some tenants will want to use their card, or a fob, while others will prefer to use a mobile credential. Multi-credential devices are getting smaller, less expensive, and are here to stay.
In many cases, hardwired or Wi-Fi connections might not be practical. Exceptions might include high-traffic areas like gates and common areas that need power or phone connections. Typical communication protocols from a smart lock to the network are Wi-Fi or hard-wired.
Product Solutions
The good news is that Allegion, ASSA ABLOY, dormakaba, and SALTO all have extensive entry-level products with migration paths to high-level systems. TownSteel also has an easy-to-navigate catalog with extensive options. Yale and Schlage both have residential products as well as commercial lines. The major players are rapidly integrating technologies from their far-flung companies into more cohesive systems.
All of the major players are developing partners to provide installation, software, training, and service for the clients. You may find this to be a productive relationship. SALTO’s Keys as a Service adds a recurring-revenue component for this market. Connections to residential networks and thermostats are becoming popular as well.
Yale’s Assure, Allegion’s Schlage Control and dormakaba’s Saffire all provide entry-level deadbolt retrofits. Although some of these Grade II deadbolts are multi-credential ready, make sure the lock can read your customer’s existing card technology. My own hard-won experience suggests you try a sample to make sure the technology actually is compatible.
Manufacturers have taken two basic approaches to smart deadbolts. Some products use a battery-operated deadbolt, while others use the battery to only unlock the thumb turn. The latter uses substantially less battery power. Typical technologies include various MIFARE®versions and HID iClass® technologies with Wi-Fi, BLE, or NFC transmission. All commercial products are encrypted; typically with AES 128 or 256.[2]
Allegion’s system starts with the Schlage Control smart lock for deadbolts and interconnected locks. Grade I hardware for heavier traffic areas include LE mortise series, NDE cylindrical and RU VonDuprin exit devices, plus multi-technology readers. These devices all connect via Wi-Fi through the CTE controller, or with the Engage™ mobile and web APPs. The open architecture system is designed to connect with many existing PACS systems.
ASSA ABLOY’s Yale serves large and small multi-tenant properties. Yale’s Assure data on credential deadbolts and interconnected locks are designed for resident doors. The nexTouch® line provides Grade-I cylindrical or mortise locks and exit trim for common spaces, stairwells, and exterior doors that get heavy or more abusive traffic. One unique feature is that cards and Fobs are updated each time they connect with the online reader/updater. Yale’s Accentra cloud-based access management software is designed specifically for multi-family properties.
ASSA ABLOY’s other multi-family offering called SMARTair is from Mul-T-Lock. The company currently offers an escutcheon trim to accommodate mortise locks and cylindrical cartridges. The system uses cards, fobs, keypads, and mobile credentials.
dormakaba is a major player in hospitality and multi-family markets with rather complete product solutions. The BHMA Grade II Saffire LX series accommodates all ANSI lock formats – mortise, cylindrical, deadbolt, interconnected, and exit devices. The Saffire LX readers are also future-ready for multiple formats.
The dormakaba SR series covers hard-wired readers. BHMA Grade I locks are the Nova D series. The Blue Sky APP controls applications on mobile credentials. APPs and readers are encrypted with Legic Connect AES 128 encryption.
The Community and Keyscan Aurora Software platforms allow scalable migration from small to the largest multi-site facilities. Card, mobile, fob, and wristband credentials are native to the locks and readers so no upgrades are required. One important issue is the full line of escutcheon trim pieces that allow clean looking upgrades.
SALTO is one of the major players with a solid product offering. The company is headquartered in the northern Basque region of Spain, with North American offices in Atlanta. The company has earned a solid place in the hospitality and multifamily markets.
The SALTO XS4 escutcheon operates storefront latches, or ANSI Grade I mortise locks. The XS4 Mini ANSI escutcheon is designed specifically for the unique cylindrical deadlatch that drops into the standard A156.2 cylindrical preps with four popular backsets. Deadbolts are operated by the standard XS4 GEO deadbolt cylinder. Multiple credentials are of course available.
Worth noting are KeyInCode, Alarm Lock, Hager, Code Locks, RemoteLock and TownSteel. These companies may have appropriate solutions for properties that want to stay with mechanical products, or don’t envision large expansions. Denver-based Proxess uses all Grade I hardware cylindrical, mortise, and exit devices.
Here’s the plan. Start with questions. Let the property manager understand that you understand his issues.
Cameron Sharpe, CPP, worked 30 years in the commercial lock and PACS industry. Contact him at [email protected]
