Ben Schall, Chief Executive Officer and President of AvalonBay
Dec 12, 2024
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Ben Schall, CEO of AvalonBay Communities, shares insights from his extensive career in real estate. He discusses AvalonBay's strategic move toward suburban markets and the impact of AI on customer interactions. Ben reflects on the importance of company culture and the organization's commitment to integrity. Additionally, he forecasts trends in the multifamily market for 2025, the rising gap between renting and homeownership, and the burgeoning Build-to-Rent sector, all while navigating today's economic challenges.
Ben Schall outlines his journey from education to becoming CEO, emphasizing the importance of community-driven real estate redevelopment.
AvalonBay is adapting to demographic trends by expanding into suburban markets and focusing on the needs of knowledge workers.
The integration of AI technology in AvalonBay's operations enhances customer interactions and boosts efficiency amid economic uncertainties.
Deep dives
Personal Background and Early Career Choices
The speaker shares anecdotes from his childhood, including humorous moments of living with his parents and waking up to his father's check-ins, illustrating the familial support he received. His educational journey took him to Swarthmore College, where he did not initially plan to enter commercial real estate but eventually found a passion for it. After completing his education, he began working for the New York City Economic Development Corporation, where he was first introduced to the real estate sector. This experience piqued his interest in transitioning to the private development side, leading him to pursue further education at Harvard Business School.
Career Progression Through Major Companies
Transitioning from his educational background, the speaker reflects on his early career at Vornado, a company known for its entrepreneurial environment, which accelerated his professional growth. His role at the Rouse Company involved repurposing underperforming shopping centers to better serve communities. This focus on community-driven redevelopment shaped his understanding of real estate's impact on urban environments. Eventually, he took on the CEO role at Seritage, where he had the unique challenge of shaping the company's culture from the ground up, emphasizing the importance of collaboration and shared values.
Shifting Dynamics in the Real Estate Market
As the speaker discusses his move to Avalon Bay, he notes the ongoing transformation in the multifamily rental market, emphasizing the need to adapt to changing consumer preferences. He highlights that demographic trends, such as the growing demand for housing due to high rates of homeownership, are reshaping the industry landscape. The discussion touches on strategic growth in suburban markets, addressing potential challenges posed by an influx of new developments in urban areas. By focusing on their core customer base of knowledge workers, Avalon Bay aims to align their offerings with shifting rental demands.
Innovations in Amenities and Technology
To cater to evolving tenant expectations, Avalon Bay is integrating innovative amenities into their properties, such as flexible spaces that recognize the growing trend of remote work. The focus is on increasing apartment sizes and incorporating individual workspaces as tenants prioritize comfort and productivity at home. The use of technology, particularly artificial intelligence, has revolutionized prospect interactions and operational efficiency, allowing for better customer service and higher engagement. This forward-thinking approach is seen as critical for maintaining competitive advantage in a rapidly changing market.
Future Prospects and Market Strategies
The speaker discusses Avalon Bay's strategies amidst the uncertain economic conditions and the anticipated decline in new supply in specific markets. They approach the potential downturn with caution, recognizing the importance of maintaining a strong balance sheet and being adaptable to market changes. He points out that while some markets may face challenges due to oversupply, others are positioned for growth, especially in suburban areas. The overall strategy is to leverage their size and resources to capture new opportunities as the market evolves, ensuring sustained growth and resilience.
On a special episode of the Walker Webcast, Willy sat down with Ben Schall, Chief Executive Officer and President of AvalonBay, at the Bisnow Multifamily Annual Conference. What are they forecasting for the multifamily market in 2025?
Don’t miss this compelling, in-person discussion where they covered Ben’s early career trajectory and how he worked his way up the ladder to CEO, AvalonBay’s cultural values, the company’s movement to the suburbs and expansion markets, how they are leveraging AI through every phase of the customer journey, how to stay nimble amid interest rate uncertainty, and Ben’s outlook on market performance, jobs, supply, and where he’s seeing momentum.
