AvalonBay CEO Benjamin Schall On 2025 Multifamily Trends, Using AI, Affordability

Trying to decipher what lies next for the multifamily real estate market is a complex task, especially as tenants, trends and demographics are constantly shifting. 

But even as big players such as AvalonBay Communities Inc. adjust their strategies to adapt to both current and future market conditions, they’re also sticking to their guns, committing themselves to their core principles now more than ever to get projects over the finish line.

“Our three lead values are the spirit of caring, integrity and continuous improvement,” said AvalonBay CEO Benjamin Schall on this week’s Walker Webcast, hosted on the stage of the recent Bisnow Multifamily Annual Conference East event. “If you focus on those three items, you'll get to the right place.”

Schall said that his firm has been through many economic cycles during its nearly 30 years — remaining successful throughout all of them. So when Schall stepped in as CEO in early 2022, he knew he needed to continue this trend by evolving the business while remaining true to its values.

Schall continued his firm’s big push toward the coastal suburban markets and widened its reach to “expansion markets” such as Southeast Florida and Denver. 

“AvalonBay’s suburban coastal portfolio is better positioned to capture rental demand over the next 10 years than it was over the past 10 years,” Schall said. “Today, the firm has about 90% of its portfolio in suburban coastal markets and 10% in its expansion markets.”

Willy Walker, CEO of Walker & Dunlop, asked Schall about his firm’s significant presence in the coastal suburbs, noting that other regions of the country, such as Austin, where AvalonBay has a shovel in the ground for the first time, have piqued more investment interest over the past three years. 

Schall said AvalonBay’s focus on coastal suburban markets is nothing new — it had been going on even before he assumed his position. The firm’s strategy behind this move? Long-term growth by targeting “knowledge-based workers” as its customers.

AvalonBay has been seeking the input and perspectives of current tenants and customers to see what amenities they value most.

“The amenity space transition over the last three years has had a few different themes,” Schall said. “One is flexible space. The old model of having a leasing office and common area space has been broken down. We’ve eliminated those boundaries completely. We now have flexible spaces where our associates are out interacting with existing residents or prospects.” 

The second trend related to amenities is the size of units, as people spend more time at home. Schall said his firm is building units that are about 100 SF larger than they were five years ago, even if the industry as a whole isn’t heading in the same direction. The thought process is that building larger units will drive rental growth over the long-term.

But one of the most important amenities to residents is technology, Schall said. Advanced technology, such as artificial intelligence, has completely restructured the way the firm operates on a daily basis.

“Our operating model journey has been probably the most significant change at AvalonBay over the last five years,” he said. “We now lead in our interactions with customers and prospects through AI. We were very early to adopt this technology and people are probably aware of what we used to call MeetElise. It's now EliseAI. That technology now handles 95% of our prospect interactions.”

Regarding the growing gap between renting and owning a home, Schall said a portion of AvalonBay’s customer base is staying in apartments longer as the number of those who can afford a median-priced home has sunk from 45% to 25% in just eight years. 

Traditionally, the firm saw between 15% and 17% of its renters transitioning out of apartments to buy a home, but today that number has sunk to 8% to 10%. 

“We’ve never seen these types of figures before,” he said. “That’s why retention is high and turnover rates are as low as they are across the industry today. As we look forward, it’s tough to know where things are headed over a multiyear period.”

Walker asked Schall for his take on the incoming Trump administration from an economic — and more specifically, housing — standpoint. Schall described the new administration as a “net positive” on the regulatory front.

Most of the regulations that CRE deals with are at the state and local municipal level, Schall said, but there has been a lot of rhetoric at the national level in and around rent control. 

AvalonBay, however, continues to believe that solving the nation’s housing crisis requires supply-based solutions.

“It’s very challenging to forecast what policies are going to be implemented and what the implications of those are,” Schall said. “But deal activity, financing activity and parts of the economy that have been a little bit subdued could potentially get going.”

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This article was produced in collaboration between Studio B and Walker & Dunlop. Bisnow news staff was not involved in the production of this content.

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