How AI Is Reshaping Apartment Leasing with Matt Service & Tech Nest

In a recent episode of the Tech Nest: The Proptech Podcast, Apartment List COO Matt Service joined podcast host Nate Smoyer to discuss the unique user experience and value proposition of Apartment List's matchmaking rental marketplace and announced the company's latest innovation: Lea Pro.

Tech Nest: The Proptech Podcast is hosted by Nate Smoyer and the show highlights founders and leaders of companies who are working to transform the way we buy, sell, and invest in real estate. Throughout the conversation, Service shared insights into industry trends, Apartment List's capabilities, and the development of the company’s latest groundbreaking AI leasing sales agent, Lea Pro.

Here's a quick overview of the conversation:

Navigating Historic Highs of New Construction

To kick things off, Service and Smoyer discussed broad overarching trends impacting the real estate industry. Service indicated the rental market has experienced significant fluctuations in recent years, due to external factors like the COVID-19 pandemic.

“The swings… They've been wild since COVID. I can't tell you how many times over the last few years. I said, ‘Well, I think we're through it.’ And it proved not to be true. I do think we are, quote unquote, through it now. But, there are still swings, as you referenced, always happening in the market,” said Service.

Digging deeper on the trends, Smoyer asked Service specifically about what some of he’s seeing that’s driving the most impact in the multifamily industry right now, to which Service responded:

“There is an unprecedented, historic high of new construction coming into the market – something like a million new units are being finished and released into the market. That is really driving up overall vacancy rates in the industry, and that is coupled with some historic lows in terms of renter demand. So it's a little bit of a perfect storm. That's a really big trend that we are working with our property manager partners to help them address and navigate through.”

Service then continued to elaborate on how Apartment List adds value for their partners looking to fill vacant lease-up projects. He said, “It's a core part of our value proposition and where our platform really adds a lot of value to our partners in terms of those either net-new construction or redevelopment projects where they've effectively got a 200-unit property that has 100% vacancy rate.”

Not Your Average ILS – Apartment List’s Differentiation Through Matchmaking

How exactly does Apartment List stand out against its competitors? Service indicated that we differentiate ourselves from traditional Internet Listing Services (ILSs) by taking a personalized matchmaking approach to apartment hunting. Unlike the standard search functionality of most rental platforms, we begin by understanding the unique needs and preferences of each renter through a series of questions.

“Rarely are you going to find that perfect apartment that matches the location, commute length, all of the amenities that you want [for the right] price. So actually being able to surface these trade-offs to the renters is where we add a lot of value, and really that matchmaker component comes in,” said Service. By surfacing such trade-offs, Apartment List acts as a trusted advisor in the apartment search process.

Elaborating on how that might work, he provided the following example of trading proximity for cost savings: “You said you wanted a 20-minute commute, and you wanted to spend $1,500 a month… Well, would you be interested in saving $300 a month for an extra five-minute drive to work? Is that something you'd be interested in?” Service emphasized that technology is at the heart of Apartment List’s operations, enabling them to deliver tailored solutions to both renters and partners. We leverage our proprietary smart technology, AI, and renter insights to match qualified, ready-to-move renters with the right apartment efficiently.

How AI Is Reshaping Apartment Leasing

The Rise of AI… Introducing Lea

The conversation pivoted to Apartment List's introduction of Lea, an award-winning AI-based leasing agent aimed at enhancing the renter experience and accelerating the leasing process.

To provide some historical context of how Lea came to be, Service indicated that Apartment List started looking into AI and its applications within the real estate space in early 2021. The company became excited about its potential and decided it was an area that was worth investing in, which led to a significant amount of research and discovery and, ultimately, the decision to acquire Diffe.rent, an early-stage AI technology provider company.

“Acquiring the company [Diffe.rent] really gave us that core team of AI expertise and foundation for us. We also then acquired their core technology, which provided the foundation for us to build Lea on,” said Service.

Optimizing the Renter Experience with Lea

As the two progressed in their discussion, Smoyer was impressed with a figure regarding the number of renters that have used Lea in some part of a transaction since its launch, more than 7 million. “That's a pretty sizable sample to have worked with and, on something complicated, like apartments,” said Smoyer.

He continued, “The range of questions you might get asked or the needs that come up, there are some nuances in real estate. What have you learned in that process of either fine tuning the AI – what you can trust and can't trust?”

Service indicated that AI is only as good as the data that it has to essentially answer the questions. Furthermore, Apartment List believes itself to have the largest data set in the industry, which really makes our AI so much better in terms of its ability to interact with renters in high-quality ways.

“Our technology is effectively representing them and their brand so the most important thing that we've learned is that renter experience is paramount. Regardless of what you do – it has to be a great experience for the renters, and that is effectively the basis of everything we do every day,” said Service.

Looking to the Future with Lea Pro

Furthermore, the discussion progressed to the unveiling of Lea Pro, the next generation of Lea. Service noted that Lea Pro’s core conversation engine is 100% generative AI, which enables massive advancements in conversation quality and comprehension.

“So what really sets Lea Pro apart is the natural, seamless nature of these conversations. It doesn't feel like you're talking to a scripted chatbot. So you actually feel like you're engaging and having a conversation,” said Service.

Both Smoyer and Service agreed upon the importance of meeting renters where they are and being able to respond to them after hours. Smoyer reflected back on his days as an agent and the conundrum of being forced to move a call to voicemail when being out with another client on an appointment.

“I can see immediately how something like this [Lea Pro] would be such a huge relief, knowing that you don't have to necessarily miss those calls or miss those messages. You can actually have a response back to someone versus just moving them to voicemail,” said Smoyer.

Service then remarked on how, in consideration of the anecdote Smoyer shared, with all the new construction coming into the market that it makes for a highly competitive situation – “As you referenced from your experience, [it] just makes it all the more important to be there ready to engage the renters whenever they're ready. That is one of the core areas of value that Lea Pro brings to the table.”

Prioritizing the Renter Experience & Embracing AI to Meet Evolving Renter Requirements

In closing, Service reiterated the importance of prioritizing the renter experience and embracing advancements in AI technology to meet the evolving needs of both renters and property teams. With a commitment to innovation and customer satisfaction, Apartment List is poised to shape the future of apartment leasing in the years to come.

Lea Pro isn’t just a chatbot – it proactively qualifies and nurtures leads, overcomes objections, and converts prospects to renters. Discover more here about Apartment List’s omnichannel next-gen AI leasing sales agent that leads to 68% more lead-to-tour conversions.

To listen to the full podcast episode, click here.