In this rebroadcast of the Apartment Jedi podcast, Funnel CEO Tyler Christiansen joins host Andrew Bowen for a wide-angle look at the operating-model shift reshaping multifamily. They cover where centralization and specialization actually stand today, how AI is evolving from simple automation to agentic systems, and why brand power is finally emerging as a real economic lever in rental housing.

Tyler breaks down what he’s seeing across REITs, large fee managers, and early-stage adopters: which operating behaviors are sticking, where friction remains, and how the next generation of workflows will change staffing, service levels, and resident expectations. He also explains why winners and losers will separate faster than most expect — and what operators should be preparing for now.

You’ll learn:

 

Episode transcript:

0:00 Rebroadcast — Apartment Jedi with Andrew Bowen — Centralization, specialization and AI in multifamily

Tyler Christiansen: I will go to my grave believing multifamily will end up being a brand-driven industry because you just can’t pick another vertical where brands don’t matter. And housing is the only one today that we act like brands don’t matter.

I think that in the V1 of the AI era, everybody with AI wants efficiency. They want things to be a little bit more autonomous, a little bit more customer centric. I think the agentic moment is going to radically change customer experience in multifamily.

You define agentic AI as doing a thing but giving it autonomy to do that. We think in the next couple of years there will be, you know, today people say AI renewals. It’s not; it’s a renewal reminder. AI renewals would be, “Hey, virtual AI renewal agent, you can negotiate within these parameters. Go ahead.” And that’s coming relatively quickly.

0:54 Introduction

Alex Howe: Welcome back to Multifamily Unpacked. Today’s episode is a rebroadcast of the Apartment Jedi Podcast, where host Andrew Bowen and Funnel CEO Tyler Christiansen dig into what’s actually happening with AI, centralization, and role specialization in multifamily.

Apartment Jedi focuses on how operators actually work, and this conversation gets into the practical realities quickly.

Tyler breaks down why brand power is rising, and how agentic AI will change leasing, renewals, and resident interactions, and where the leaders of the centralization movement are today. 

Let’s get into it.

1:36 Apartment Jedi with Andrew Bowen — Centralization, specialization and AI in multifamily

Andrew Bowen: Has there been a more overused buzzword in multifamily over the last three years than centralization? Actually, yeah, AI. But you get where I’m coming from. Whether you’re tired of hearing about centralization or not, anyone looking at the industry objectively can see the operational model is fundamentally changing multifamily.

That’s why I wanted to sit down with the man who has the bird’s-eye view into these changes: Tyler Christiansen, CEO at Funnel Leasing. Funnel is arguably at the center of the centralization movement, and ironically put itself there almost by accident. Which is a really interseting story Tyler shares in our conversation.

With Funnel’s unique view into centralization efforts across the industry, I wanted to explore questions like:
 • Where are we on this journey?
 • Are my fears about the leadership development model breaking founded or just my paranoia?
 • Is this about headcount reduction or improved processes and efficiency?
 • Is it leasing or administration that is driving the real value in multifamily?
 • How does AI fit into an effective centralization strategy?
 • And is it centralization, specialization, or both?

Amazingly, we got through all of those topics and more in my upcoming conversation with Tyler Christiansen.

2:53 Tyler Christiansen, CEO Funnel Leasing

Andrew Bowen: Well, Tyler, I really appreciate you jumping on here and doing this. As we kick this off, my first question for you is: what’s it like to be the golden boy of the industry doing something that it seems like everyone’s been talking about for three years and is finally doing something about?

Tyler Christiansen: Andrew, I appreciate that. As we were just joking about before we started recording, you feel like for a long time as you’re an entrepreneur and working on the vendor side, the partner side of this industry, that you are shouting into the wind and that nobody’s listening.

And so there is a little bit of validation. I’ve had a few of our partners who tried to build their own CRMs and tried to centralize, and them coming around and saying, “No, you guys were right. You were onto something here.” It feels good, but as you know, you’re always, as an entrepreneur, thinking about 18 months from now, five years from now, and are we prepared for that?

So as many accolades as we may get, we get just as many, if not more, that say, “CRM is dead, SaaS is dead. We’re not going to need a tool like Funnel because AI is just going to run the properties with robots.” And so you have to always be willing to have an unpopular opinion, of which I have many.

I appreciate the kind words, but as it relates to centralization in particular, we are happy to have been proven right, although we think we’re in early innings.

4:11 Where is the multifamily industry on the journey to centralization?

Andrew Bowen: I agree with you, and that’s actually where I want to have the conversation. When I was reaching out to you to have this conversation, I really wanted to get a feel for: okay, where are we at in multifamily’s centralization journey? I know groups that are super far along.

Before yesterday, I was going to say everybody’s somewhere on the journey. But yesterday I talked to a group that has not started. They have not centralized anything. I question that just because of the way we centralized accounting as an industry a long time ago.

But as someone who has a really interesting, unique viewpoint into the industry and talks about this on a day-by-day basis, I’ll let you pick the analogy you want to use. Where do you think multifamily is from a centralization and specialization journey today? And then we can talk about where we think it’s going to go.

Tyler Christiansen: Love this question. And maybe just to take a step back, because so many people misuse the term centralization. To me, having grown up in multifamily, the historic model was onsite operations, and we had completely siloed individual communities that ran like they were their own business. They just popped out of the ground and there was no concept of economies of scale or corporate or back office or lead sharing or role specialization.

So to your question of where are we, I think it has gone from a fringe niche concept to a mainstream, widely adopted best practice.

You asked for an analogy. I like drawing the analogy with the EV industry, the movement in the automobile industry. When you look at what Tesla or Rivian or some of these newer car brands are doing, we think about the autonomous driving capabilities, the charging capabilities, and that’s part of it. It’s a better product. But the bigger disruption happening in the automobile industry is the consumer getting more direct-to-consumer.

You don’t buy a Tesla from “Andrew Bowen Tesla.” You buy it from Tesla. But you would still buy a Ford from Andrew Bowen Ford. Everybody has their franchises. Multifamily ran like franchises and is slowly moving toward a world of brand leasing.

We’re probably a decade away from, and it’s going to happen in automobiles as well—eventually there won’t be car dealerships. I will buy from Ford. I will buy from Chevrolet.

I think eventually in multifamily, to your point, there will be no single-property operators, or very, very few. It just will not make any more sense.

And to some of the most advanced centralized clients of Funnel, they still have a long way to go. They would tell you the same. They still have a lot of things they would like to move offsite, that they would like to move to a shared services capacity.

And I agree with you that still probably a third of operators I talk to, in my opinion, are running like it’s 2005 or maybe 2015. But moving toward the REITs as the early majority are trying to follow what the REITs did.

Early innings, but we’re well on our way.

7:23 How is Funnel helping the multifamily industry centralize and specialize operations?

Andrew Bowen: Okay. I want to come back to the Tesla example later on in the conversation because there’s a really interesting way that I think Tesla and others might be evolving their business that will be truly, completely, radically disruptive. And I’m curious if you see a similar path for multifamily.

But before we do that, you mentioned, you know, jump back a little bit. I love this stuff. I love to jump in. We probably shouldn’t assume that everyone listening to this podcast or everyone who might see it knows exactly what Funnel does. They might have an idea of it, but why are you in such a unique position to be able to talk about the way multifamily is centralizing and specializing operations? What is it that Funnel really does?

Tyler Christiansen: Awesome. Thank you. Great question. And some personal background. I started my career at Property Solutions way back in 2012 when websites and online payments were the cool disruptive technology.

Andrew Bowen: You guys were my vendor to put my prices out way, way back in the day at PSI.

Tyler Christianse: That’s right, PSI!

We had syndication and we had online payments. And I highlight that because whenever we’re talking about current and future technologies, we forget to look back in the rearview mirror. When I came into the industry, online payments were only being done at about 3%. If a hundred-unit community had three renters paying online, that was normal. And now it’s 100% everywhere. But it takes a while for future technology to be widely adopted.

My personal experience was there. I also did a stint at LRO, so you and I share our passion for revenue management. And then I ended up leading the sales organization at Entrada. So PSI became Entrada in the transition from Entrada being a point-solution website provider to, as folks know them now, a property management software.

I was there through that transition. Why I joined Funnel and, to answer your question about where we sit, is that I really wanted to be part of a technology platform that was not PM-software-dependent. That did not require you to change out the back office to fix the front office.

So I joined a startup in New York City called Nestio in 2018. In 2019, we rebranded to Funnel, and that name is intentional. Everything was “platform” in 2019, you’re one of the three or four big PM software platforms and you’re all in on that. We thought there was an opportunity to have a best-in-class workflow that could sit like an agnostic funnel on any back-office tool.

What we did not anticipate in 2019, and the funny story is, the first time I saw our CRM as we built it in 2019, I thought we had a bug. I thought there was a defect because natively, the way our engineers in New York built the tool, it showed you leads across communities.

And I remember saying to the engineers, “Guys, we’ve gotta fix that bug. Nobody’s going to buy this product from us with that.” And the answer was, “Ah, we’ll get to it. Everybody in New York likes lead sharing. I’m sure our customers will like it.”

To answer your question specifically, that “bug” as I perceived it wasn’t a bug. It was a feature. It was the differentiator.

That allowed us to have—you mentioned RealPage; their flagship product is OneSite. OneSite, by design, accountants want to look at a single entity. That makes sense if you’re looking at the asset manager worldview.

But if I’m in sales and marketing, and it was Essex Property Trust who told us this, I’d like to see my portfolio, especially if I’m a REIT with density.

And so that unique architecture that we built into the system by accident almost started to become this differentiator in 2019 with Essex, then with Cortland, and then with Camden. We were able to bring to large operators, owner-operators, and REITs a portfolio view of their sales process that they had never had before.

And to go back to the Tesla analogy, instead of looking at “I have a relationship with this Ford dealership and that Ford dealership,” I moved to having a single relationship. And all these amazing data points started to come out of it.

One of our partners, Camden, 6% of Camden’s residents are repeat residents. They didn’t really have that data point pre-Funnel because they had all these siloed systems, one site per site.

And then the big unlock: our REIT partners, in moving toward portfolio leasing and portfolio operations, saw the opportunity to begin to have shared staff, shared services, and for the first time really get economies of scale on their staffing ratios.

Famously, Camden has cited that they saved $4 million a year improving their employee-to-unit ratio from 1:80 to 1:120.

So that was early days. Where we sit at a unique vantage point now is we’ve seen that wave—from niche REIT operating model to now even most of our large fee managers having a centralization offering that they run on Funnel.

12:15 Is it centralization, specialization, or both?

Andrew Bowen: Yeah, it’s interesting because there’s a lot to unpack there, and that’s why I wanted you to share what you’re doing as an organization. As I talk to operators of all sizes, who are at various stages of—I’m going to call it—the specialization journey…

Actually, let’s unpack that real quick. Is it centralization, is it specialization of role, or is it both?

Tyler Christiansen: Really good question. If I had to pick between those options, I’d say they are unique words. Centralization is a broader word, which means moving from single-property operations to multi-property. It doesn’t require role specialization. I can still have generalists working a bigger group of properties.

The real unlock, though, as you just articulated, is role specialization. Once I’ve removed the artificial barriers of single-property operation and I’m viewing multi-property operations, now role specialization makes a ton of sense.

13:17 Where do the savings from centralization come from?

Andrew Bowen: And thank you for unpacking that with me. I’ve personally fought the word centralization for a while because almost every specialized model is a decentralized model, not a centralized one. They’re not sitting in the same room. But it is absolutely multisite, for sure. It is multisite and specialization.

To continue where I was going: a lot of operators I talk to who are down this path, some of them being your partners, the savings I hear them talk about are not coming from what Camden cited, going from 1:80 to 1:120. It really is that because we’re specializing our renewal team, our delinquency team, our collections team, our backend accounting team, all these things, they’re just so much better at what they do that they’re driving more efficiency and more efficacy because of the specialization.

Is that an oversimplification on my part, or is there something to that?

Tyler Christiansen: No, you nailed it. In fact, I think there’s probably a bit of a disservice that we and the REITs did early on in the centralization journey, that we tied it too much to cost savings and efficiencies.

In a tough market, where rents are not growing like they were in 2021, some of our partners, especially fee managers, have had to slow their role specialization and centralization initiatives. There was a perception early on that this was, similar to AI, they both have tremendous potential for cost savings, but the bigger opportunity is the improved customer experience, leading to greater revenues and outperformance.

I’d say the majority of our partners that have embraced centralization would answer it the way you said: they have made incremental staffing efficiency enhancements. Every one of them would say they need fewer team members. When a role opens up, they can just be a little more efficient, a little more efficient, backfilling less and less.

But similar to AI, no one’s turning it off because the customer experience is so much better.

Applications are a perfect example. The application process in multifamily, when not specialized, is unnecessarily long. It takes days and days, in many cases, weeks. The average application processing time is around 20 days for most customers before you centralize that.

Because when you just have somebody who is paying attention to the application process and moving it along, that will show up in fewer days of vacancy, in higher conversion ratios.

So while that isn’t a direct “I’m cutting one person because I centralized applications,” it shows up everywhere: in improved customer experience and improved operational performance.

16:22 Keeping centralized operations personal

Andrew Bowen: Okay, so let’s stick with the application process for a little bit because it brings up a good example of a couple different things I’ve been mentally grappling with, especially when it comes to the customer experience.

One of your clients, way back in the day, challenged me to think about the fact that when a prospect is coming out and they’re comparing the experience they’re having, they’re not comparing it versus the property across the street. They’re comparing it versus Amazon. They’re comparing it versus Marriott, booking a hotel. Shout out to AMLI for that conversation way back in the day.

But it really has gotten me thinking about: okay, there are points in the application process where I want friction as an operator. I don’t want it to be completely seamless because that’s what we got into post-COVID, when everything was out there, fraud was rampant, etc.

And I know this is a hard pivot, but go with me on it. I have to imagine the same is true from a processing perspective: at what point does the person onsite either have to be informed or have to be involved? And it may be different for every process.

Forgive me for such a broad question, but I have to think there’s got to be some point where, when Mrs. Smith actually walks on the property, because at some point she’s going to walk on the property, even if it’s just to move in, how are groups that are doing this well making sure that site teams are up to speed and communicated with, while still experiencing the efficiencies of a centralized, specialized service?

And I’m going to warn you, we’re going to come back to this question when it comes to utilizing AI for automation and when the human handoff should come there. But I realize they’re two different questions.

Tyler Christiansen: Really great question, Andrew, and it touches on a couple important topics.

The first one is that you’re nailing something fundamental. In the old, pre-role-specialization, pre-centralization world of multifamily, every property operated the same. The opportunities for differentiation were just how well your staff performed.

AMLI leaned into brand awareness when nobody else was. We were fortunate to partner with GID/Windsor. They’re very proud of their resident reputation. So differentiation was at the margins. Every grocery store looked the same.

Here in Florida, we have Publix. People love Publix because the staffing ratios are slightly better.

What centralization unlocks is immense variability in service levels.

We have many customers who have intentionally decided they are not opening back up the leasing office. Essex Property Trust is one. They’ve said this publicly. They closed their leasing offices and never reopened them.

In the REIT world, that’s a very intentional decision. They operate with a focus on FFO, funds from operations. So for them, that decision makes sense.

Now, to your point about the community across the street: that creates differentiation. We have partners who are trying for a more hospitality-oriented model.

Cortland is a good example. They’ve tried to take as many things offsite as possible. The best example is their community in Phoenix, in Scottsdale. It’s gorgeous, it looks like a hotel. It’s called the Biltmore.

You literally look across the street, go on Google Maps if you’re listening, and you’ll see a corporate office with a Cortland logo on it and the Cortland community across from it.

They have a hub in Phoenix where they moved application processing, renewals, tour scheduling, all the administrative work.

Because Cortland believes they can outperform on hospitality-level service.

When you walk in the door at Cortland Biltmore, somebody is waiting to greet you like you’re checking into a hotel. That level of hospitality.

And that spectrum of optionality in service levels didn’t exist before. Everything had to happen onsite; you had to staff the building the way you staffed it.

Now, to the second part of your question about the consumer experience, and we’ll come back to AI, consumers want choice. Our data shows the majority of consumers are good actors. They’re not trying to defraud the property. They have income, they’re happy to sync their bank account so you know they have the income they need.

By and large, at that point in the customer journey, they don’t want to talk to anybody. They already got their tour questions answered.

What I’m concerned about, and I remember this from being a renter: I lived in New York City when I was moving to Tampa, trying to rent a home sight unseen. There’s so much tension when you know there’s an available unit, it fits your needs, fits the school district. You need it now.

All I cared about was securing the unit. My questions could be answered later. I wanted to make sure I had the unit, I was approved for it, and nobody else could take it. Because there is scarcity. Even today, communities only have a few available units.

So if we can remove friction from that process, what we’ve seen is it allows teams to focus more on the bad actors. Get the good actors through the happy path as quickly as possible.

Most of our partners view application specialists as a no-brainer. That probably shouldn’t be done onsite. It’s a special skill set.

Morgan Properties is one who has done a great job recognizing the assistant community manager is not a fraud specialist. Why not have a team that is really good at picking those out?

So in short, you’re right: the application process varies. Some partners go very low-touch. Some go very high-touch. But applications are a great example of where centralization provides a lot of value to the consumer and to the management company.

Andrew Bowen: I completely agree. Sam’s a good friend of mine over at Morgan. We have a call every, I think every other week now. I’ve talked to her a lot about this.

And you’re right. As an assistant community manager, I’m going to completely date myself with this, I was the one reviewing credit reports. I had an aquatic biology degree. I had no business doing risk management at that point.

So it is interesting to see the way that is a legitimate one. And that’s a process where, again, I want it as frictionless as possible until there needs to be friction. If something comes up that either an AI or a specialist sees that has to create a friction point, I want that friction point.

23:13 Too much AI can cause cognitive offloading onsite. AI + humans = the future of multifamily

Andrew Bowen: Before we get into that, since we talked about AI, A couple different things. In my mind, and please tell me if I’m wrong, it feels like the application of AI models, chatbots talking to prospects, delinquency work, renewal work, workload management, groups would have an easier time adopting and fully utilizing these tools in a specialized staffing model than in a disparate model.

Just thinking about one person onsite doing everything versus one person, wherever they’re sitting, doing one thing and doing it well.

Tyler Christiansen: Yeah, I would agree with that. And I think it plays into something else. You and I were at a conference this summer, shoutout to our partners at ZRS, and we were talking about this.

A study had just come out, I remember citing it, about cognitive offloading.

When I talk to my kids about this, I tell them: if you let the AI do your homework, it will show up on your test that you don’t know how to do the math problems.

To your question, we’ve seen, whether through Funnel or our competitors, that when you tell someone onsite, “Don’t worry about it; AI’s got it,” they stop worrying about everything. They stop picking up the phones. They go into cruise-control mode.

I think that’s because they’re generalists. There are a million things they can do with their time.

Role specialization works better. You’re more likely to see the nuance of where AI can help you and where it can’t, and where you need to lean in and own the process. Applications, renewals, maintenance, whatever it may be.

And we track our NPS data for site teams. One surprising thing: we’ve been doing AI since 2021, everyone thought onsite teams would hate AI. But from the start, it was clear onsite teams were happier with our CRM when AI was turned on. Considerably happier. When AI was demonstrably helping them.

I have not looked at whether that correlates with centralized communities versus non-centralized ones. But it stands to reason, as you said: if I’m highly distracted and I think AI is doing a lot, I’m not going to get all the benefits.

But if I’m specialized, tour-scheduling specialist, application specialist, fraud specialist, I know clearly what it owns and what I own.

26:13 What’s next for AI in multifamily?

Andrew Bowen: Okay. That’s interesting. So as you do that and you look at your NPSs, I’d also really be curious to go look at changes in ORA score, and seeing like before and after and trends on that. Because it’s interesting.

I’ve talked to a bunch of groups—I’m just thinking about the way to measure that impact—but it’s interesting. I’ve talked to a bunch of groups now that are starting to think about: how do we train our managers, our regional managers, to use AI? I mean, you mentioned the conference with ZRS, that was the entire point of the panel we were on: getting at least the people thinking about this.

But it’s been interesting to see the way that, especially site-level teams… the last few conferences I’ve been to where I’ve actually had a booth and worked that kind of thing, we put cameras in the place just to attract people in, be that magnet, and we just asked everyone: “What was the last thing you used ChatGPT for?”

One person actually asked me, “What’s ChatGPT?” Had no idea. It blew me away.

Do you want to take a stab at the number? The landslide number-one answer we got as to what was the last thing you used ChatGPT for—from basically community managers and regional managers—was: “Write a hard email.”

Like, landslide.

And I’m like, you’ve probably used AI in so many other different ways that you don’t even realize just by interacting, but the thing you remember is you had to write a difficult email, and that’s what’s there.

So I think, again, from an industry perspective, the industry is still in a fledgling state from an AI perspective. I think where you guys are utilizing it and the interaction you guys utilize with the teams is probably the cutting edge.

In fact, you brought this up at that same conference. You brought up that, you know, multifamily is closer to the cutting edge of technology and AI than we ever have been. And that statement opened my eyes. I was really like, “Tyler’s right.”

Tyler Christiansen: Yeah, and you’re right. I think that the big change that we need to recognize is that today, when people say AI, they’re often in their head envisioning a product. And you know, for many of us, it’s ChatGPT. In multifamily vernacular, we mostly think about chatbots, right? Answering my questions about renewals.

But we’ve had AI in different forms for a long time in the industry. Whether it’s pricing algorithms, or specifically in our world, fraud is an AI algorithm. We are looking at your income, we’re looking at all these factors and coming up with, and we use AI to read your pay stubs. There are lots of use cases for it.

And I think the sooner we as a society, and this is going to happen, it always happens, stop thinking about it as a product and more that it’s enabling technology, like the internet. The only internet product that exists in multifamily is community-wide WiFi. Everything else that we do is a WiFi product or an internet-enabled technology.

Similarly, every product is going to have AI components in it.

And what I said at the ZRS conference was an epiphany for me because, again, payments were new to multifamily in 2012. They weren’t new to the world. Online payments had been around for 10 years. It took 10 years for anybody to say, “Oh, why not do rent payments?” That is the pace of change. It’s dramatically different now.

We’ve done a lot of press releases about, for instance, we’re partnering with the chairman of OpenAI for voice technology and our chat technology. If you go to a Greystar website right now, you’re likely to see our chatbot sitting on that website. They can talk to you in infinite languages.

We just did a press release today that we’ve introduced voice AI technology speaking—

Andrew Bowen: Thirty-four languages? Something like that today?

Tyler Christiansen: Thirty-four languages fluently. And that’s as good as anybody. The voice technology that we use for our customers, if you call a Camden community today, is as good as the voice technology for anybody. Period, period.

And that’s only going to continue to accelerate.

What’s interesting about the AI technology though is we are clearly moving into a new chapter right now. If you pay attention to the big LLMs, they’re doing less press releases about how much better their models are getting.

And for listeners who don’t follow this as closely: ChatGPT is a product. OpenAI is the company. OpenAI’s core business is a research institute trying to advance frontier models, creating the most intelligent algorithms in the world with the whole internet processed into them. Then we ping it and ask it questions.

Those models, by almost consensus, are starting to, I don’t want to say plateau, but the pace of innovation is not going from one to one-hundred anymore. We’re incrementally getting better.

ChatGPT 5.0 is better at coding, but if you ask it homework questions, it’s about as good as it was two years ago or maybe twelve months ago.

What is changing is that all of us, now that the models are stabilizing to a certain extent, are looking at our business practices and saying: okay, where are the, this is the buzzword, agentic opportunities?

And that is a real new chapter.

Let me tell you, this is kind of breaking news, but this week, or sorry late last week, OpenAI announced a partnership with Stripe. Stripe is the payment processor of Funnel.

And the big news is: you can do payments inside of ChatGPT.

At first you might look at that and say, “Is that radical?” But I think it is. I think it signals the moment where we stop just asking it things. “What’s the pet policy at the community?” That’s the party trick today, asking it fun questions in multiple languages.

Where this gets really exciting and disruptive is if we envision a world in which Andrew Bowen can pull out his preferred LLM, Gemini, ChatGPT, whatever, and as an apartment renter, you can make a rent payment. You can renew.

And it remembers. “Hey Andrew, are you telling me about your son or are you talking about your lease?”

And it takes the memory it has of you, and it begins to interact with the community systems, Funnel as the CRM system of Greystar, Yardi as the accounting system.

You could ask: “Hey, I saw that I had a late charge. Could you explain what that is?”

Then: “I’m ready to renew. Could you send me the renewal offer?”

And imagine all of that happens inside ChatGPT.

That is a whole new world. That is going to create very different workflows, experiences, technology that we are just barely getting into.

We are really excited for that next chapter of AI. The chatbots are fun, but they’re just the first part of what AI will be in multifamily.

32:44 Different AI models are advancing, which ones are actually agentic? Which AI models are best?

Andrew Bowen: Yeah, so you see, there’s so much to unpack there, and we’re not going over an hour on this conversation, so we’re going to have to leave a lot of the meat on the bone.

So to give people a timestamp, because this is going to come out probably about a month after we recorded: it’s October 7th today, from a relative perspective.

With your thoughts around agentic AI again drastically oversimplified, is the AI not just delivering answers; it can actually do tasks for you, and it can do it autonomously without you necessarily having to give permission to do it.

What you just described seems to be a relatively widespread agentic AI versus a micro-agentic AI that’s really good at very specific tasks.

Which way do you see that pendulum swinging? Something that’s more general agentic pretty good at a lot of things or leveraging very specific micro-agent models that are really, really good at something and building that in?

Tyler Christiansen: Yeah. Really great question. And there’s multiple layers to that as well.

I referenced the LLM models not advancing at the same pace they were a few years ago. What they’re getting better at, as you just articulated, is they themselves using different models.

So when I ask ChatGPT a question now, it actually can change on its own which model to use, because maybe Model 5 is better for coding, and Model 4 is better for homework.

Similarly, and maybe a very tangible answer on this.

I mentioned, and we’ve done press releases about our partnership with Sierra. It’s run by the chairman of OpenAI. He was formerly the CEO of Salesforce.

That partnership came about through a serendipitous interaction I had with him. I got to meet him, and I asked him point blank, when I heard he was building this company:

“Are you, chairman of OpenAI, former CEO of Salesforce, going to go into multiple verticals like housing and healthcare and go deep in every vertical?”

He literally stopped and sat there and was thinking and processing this, because they had just barely started the company. And he said:

“No. We need to partner with companies like yours.”

And so we immediately went to work trying to get an exclusive partnership with them, which we’re happy to say we secured. Smart move.

But that answer is the same answer to your question, which is: you need both.

It doesn’t make sense for Funnel, or any multifamily company, to be figuring out how to do voice AI in forty languages. They’ve figured that out. My team building that out is a waste of money.

But it also doesn’t make sense for them to figure out how to integrate with your old world—Onesite versus OneSite, right? And how to integrate with Blue Moon, and how to integrate with Zillow, and how to tie all those things together so that when a consumer asks to sign a lease, there are seventy-two things that need to happen simultaneously to be able to generate that.

You can’t just build that from scratch. Sierra, at a $10 billion valuation, is not going to go do that.

So in short, I think you need both.

I don’t think Yardi, or Salesforce or Microsoft are gonna be completely deprecated out of this world. We need them. You need databases, you need systems of records, and importantly for agentic software, you need workflows.

You need tools that can actually process a payment. You need tools that can actually, you know, do a lease deposit alternative, for instance. You need tools that can sign a lease. And then there’s a layer of conversation that happens, and I think where we don’t know the answer yet is, is that gonna happen on my website app? Is that gonna happen in the resident portal? Is that gonna happen in chat GBT? 

And the answer is probably all the above. Like just like consumers today like to do things in different channels, like Funnel gets leads in texts, we get leads in emails, we get leads in phone calls, you get leads from ILSs.

I think there will continue to be channels where consumers have conversations, and those channels should primarily be leveraging the best in class technology that chat, GBT and others provide, but the underlying infrastructure and technology to apply for secure pay, lease deposit, alternatives, renewals, they’re gonna take advantage of the hard work that you and we and RealPage and Microsoft have done to actually get the work done.

Andrew Bowen: Interesting. Okay. So, I mean, it’s—yeah, it’s a debate I’ve been having in my head, but I think you framed it really, really well in the fact that these models can switch between them. 

So every model could have, in today’s world, other than the compute and the energy it requires, you know, an infinite number of micro agents that it just switches back and forth between to do all these tasks.

Tyler Christiansen: Correct. And that is how we work today. When your use cases today, which are primarily chatbots. If a question comes in in Mandarin and it’s about a collections issue, we are going to, as the AI agent interface, query multiple systems on the backend.

We have trained ours, we have a multifamily context window essentially—to be able to answer those specific questions. But then we are hitting multiple systems in the background to bring that answer forward.

And you’re right, today, candidly, it’s highly inefficient. Over time, we’re all going to get better at using less compute, using fewer tokens to be able to do that.

But in short, you need both.

And I do not think there is a world in which I am, I mean, I would bet, I’m betting my entire company on this and my entire life savings: you’re not just going to go to a ChatGPT and say, “I need a renewal. Help me renew my lease at my community.”

Because the things that have to happen behind the scenes are going to require tools like Funnel and tools like RealPage to make that happen. Because there’s just not enough intelligence in the world, and compute intelligence, for an OpenAI to be able to create a lease that is state compliant and up to date with fee transparency, etc., etc., etc.

Which is why, like I said, this is coming directly from the chairman of OpenAI. He processed that question in his own brain and said, “No, we need you.”

And that—that’s kind of the answer.

Andrew Bowen: Well, yeah, and I mean the specifics, like, sure everyone is state compliant, but let’s be real: you could, there are groups out there who have their own lease that aren’t even part of the associations. Specific to it.

Tyler Christiansen: Yeah. We see them all the time. We call those proprietary leases. They’re a lot of fun.

Andrew Bowen: Exactly. That was the word I was looking for. Thank you.

Okay, so let’s—we, wow, we went deep into that part, which I love. I’m all for it. Even if nobody listens to us, I’m all for it.

39:10 Where are the hidden values of centralization beyond leasing?

Andrew Bowen:  Let’s back it up a little bit though, because one of the things that, when I look at centralization and specialization, you might get mad at me for saying this, but I look at the leasing side. 

From my observations of folks that are doing it and talking to folks that are doing it, it feels to me like leasing gets the glory and the publicity, but the back of the office is where people are really seeing real returns.

Not that leasing isn’t giving a real return, but it is just an oversimplification and observation on my part, or is there something to that?

And where do you see the industry from a progression perspective on centralized leasing versus centralized, let’s just call it administration to completely overgeneralize?

Tyler Christiansen: Yeah. No, you nailed it. And I don’t disagree at all, but I’m going to give a spicy take on where we go. 

I think folks that are new to multifamily and haven’t walked down it like you and I for decades don’t appreciate the nuance of different operating models and cap tables and how deals the pro forma of a given property works.

Right? And there’s a huge difference in the way an Edward Rose runs their community than the way, like one of our partners Hillpointe. One of the fastest-growing companies in the country. Hillpointe, they build properties like crazy, so they’re underwriting their deals as the developer.

Whereas, you know, Edward Rose famously has never sold a community. They keep them forever.

And those different models explain a lot about how you lease.

If you’re a merchant builder, famously in revenue management, we would look at merchant builders and we’re like, you know, there are these expiration cliffs that they weren’t thinking about, right? That the next owner has to figure out how to spread out the leases.

Andrew Bowen: Called that the year-two hangover.

Tyler Christiansen: Yeah, the year-two hangover. Right. Because the merchant builder didn’t care. They just needed to get it leased up.

So leasing inherently is a reflection of that pro forma to the business.

And I highlight that because centralized leasing, to your point in terms of the glamour, works beautifully if you are a REIT. Because all the incentives are there for you to cross-sell, for you to have a branded experience, for you to have a single centralized sales team.

All of those advantages have a lot of drama associated with them if you’re a fee manager.

Because if I’m a third-party manager, I have tremendous density, but each one of those communities is a different ownership group. And it goes back to my analogy of the car dealerships.

The reason why Ford and Chevy and everybody else can’t do what Rivian and Tesla do—they want to do it too, like trust me—is because they have contracts with their dealerships that prohibit them from doing that.

The same impediment exists for our third-party managers. They have contracts with their customers that say: “You can’t cross-sell. You can’t share my leads. That’s my staff. Those are my leads. And I’ll fire you on 30 days notice if you do this cross-selling thing.”

So there’s been a lot of impediments there.

I’m going to come back to how we get through it, and it’s really exciting.

But you’re right: the back-office centralization is kind of a no-brainer for everybody. There’s just no reason why I should not be looking for centralized renewals or centralized collections.

And that has been played out with our third-party management clients. A lot of them started off looking to try and be REIT-like in their centralization efforts, and they just ran into a lot of emotional—and candidly, not data-driven—opinions.

These are emotional: “It’s my staff. It’s my people. It’s my leads.” No data.

But they don’t care about sharing resources for centralized admin.

And therefore, our third-party management partners have seen great adoption with centralized admin.

42:56 Bringing brand experiences to multifamily

Now, where I think this gets exciting and where it’s going, is, you know, our friend Don Beveridge talks a lot about the big have gotten bigger, especially in the fee management world.

Now, having said that, Jay Parsons, our friend, also will highlight it’s still a highly fragmented industry. But somewhere between the highly fragmented industry that we have and the consolidation that is also happening is a world in which every other vertical that we as consumers interact with, brands matter.

And one of my core beliefs, you talked about, you know, we were early on centralization, I will go to my grave believing multifamily will end up being a brand-driven industry because you just can’t pick another vertical where brands don’t matter.

And housing is the only one today that we act like brands don’t matter.

Over time, and this shows up, like I mentioned, in our own data, you look at Funnel’s customers that have brand: Cortland, Camden, MAA. They have better retention. They have better loyalty without trying.

Right? It’s not like Camden has for years been having a cross-property renewal strategy. But because they have a brand and they have really great customer service, inherently, just kind of organically, 6% of residents at any given Camden community are from a different Camden community.

So like, it happens. It works. There’s a benefit.

We feel very strongly that as these larger third-party managers get on tools like Funnel that enable this sort of behavior, they will have chances to experiment and show: “Hey, you know what? If somebody’s already given me their notice to vacate and they’re leaving, typically the client is okay with me marketing to them. Well, what if I could prove that they want to stay in the ZRS portfolio? They want to stay in the Greystar portfolio?”

If I could prove that, well then I also am going to prove that my marketing spend is coming down. I’m going to prove the value of that lease is higher with me.

And you start to move toward, this is my big hypothesis, fundamentally, asset managers in multifamily are no different than asset managers in hospitality.

My dad’s an asset manager, so I know how they think.

In hospitality, no one has any problem paying for Marriott to be a brand.

Andrew Bowen: Oh, you are about to speak my love language, Tyler. Keep going.

Tyler Christiansen: And so in short, over time, I believe in a capitalist economy like America, we will end up with the best operating model, which is one in which brands matter and customer lifetime value matters.

And when we get there, Andrew, then centralized leasing, we won’t call it that, but it will be the preeminent model in multifamily someday.

Andrew Bowen: So I, at the beginning of the year, actually the end of last year technically, I wrote five big, bold predictions for multifamily that I thought would happen this year. Probably a better way to write that is that I hoped would happen this year.

One of them, and the one I feel most firm in still, is that company brand would usurp asset brand from a value perspective. And basically saying, exactly what you’re saying, that we’re going to go to much more of a “you’re selling the company.”

And I’m so glad you brought up hospitality, and Marriott in particular.

You know Marriott is the second-largest hotel brand in the world. And you probably know the answer to this, but do you want to take a guess at what percentage of their hotels are franchised—meaning that it’s owned by somebody else but operated under the Marriott umbrella?

Tyler Christiansen: I think 90, yeah.

Andrew Bowen: If we went to Choice Hotels—Choice Hotels is 97%, and they’re the number one.

Marriott is in the high eighties. They didn’t quite cross the nineties. Perfect.

Yeah, I’m with you on this. There is a, not a franchise model from an ownership perspective, but a franchise model from an operational perspective, that absolutely could deliver value.

And again, I was talking to someone earlier in the week, earlier on another episode. She was like, “Wow, that’s really dangerous.”

I’m like, yeah, you actually have to pull through. You have to do what franchises do. You have standards, and if you don’t meet the standards, you’re losing your flag. As an owner, we’re no longer going to represent you because you’re not implementing the systems as we need them.

Tyler Christiansen: Yeah. Well said. I think that, to your point, I have heard that excuse for many years. And now, it is an excuse in the branding concept.

But, you know, with all the litigation that’s gone on, I can, maybe that makes a little more sense. There’s been a lot of argument that, “Well, I don’t want my name on the building because, you know, it’s hard to get a bad Google review if nobody knows who runs the building.”

And to your point, I drive around a lot in Florida for work. I have kids that do sports. And I look at these signs of, like, Arbor Glen.

And you’re just like, you spent thousands of dollars putting up these random logos that mean nothing to anybody. And the name means nothing to anybody.

Most people don’t even know the name of the community. I can’t remember the name of my last apartment community. I don’t know where it was.

Andrew Bowen: Tyler, I can tell you what decade the apartment was built, or at least was acquired, by the name of the property.

If it’s early 2000s, I will guarantee it is the name of a tree followed by a body of water. Like Cypress Creek.

If it’s the early 2020s, you probably have the address as the name, 2499, which is the road.

Tyler Christiansen: Yeah. And the new one, the new cool thing, is you do The Andrew, The Bowen. Like you say “The” and a name. That’s all of them now.

So that tells you kind of where you are. If it’s like a cool Spanish name like The Poblione, you’re in Florida. Anyway.

Andrew Bowen: Yeah. I mean, just like the Biltmore in Scottsdale, Arizona.

Tyler Christiansen: There you go. At least it’s the Cortland Biltmore, right? It’s brand. And that tells me something.

And that, so in short, I think we are early innings in centralization. We’re early innings in AI. But all of it, to your broader point, cost savings is a little bit of it.

Improved renter experience is what gets us out of bed.

We are passionate at Funnel and the partners that we love working with, like ZRS and Cortland and others, they sing that same song. All of these are great tools. They’re just tools we need to use to better serve our customer. Our customers are asset managers. Our customers are renters. Our customers are associates.

And all of these technologies move that way.

And I fundamentally just come back to the point of: centralized leasing, I think it is a better model than the kind of franchise model that we have today.

Andrew Bowen: And I would say that the reason Marriott could do what they’re doing—and by the way, full disclosure, I used to work for Marriott. I used to run their corporate housing division. Not their entire division—a couple corporate housing offices for them.

They controlled the funnel. They were the lead generation platform for all of those hotels, all of those brands.

So it did start with essentially centralized leasing in that model.

49:30 Building the next generation of leadership with specialized skills

But, we’ve been going for a bit. There’s two other things I absolutely want to talk to you about that I will not get off this call without.

So the first one is one that I’m also passionate about, and I’m starting to see the cracks in it.

I believe that centralization, the operational model, will break, and is breaking, the leadership development model in multifamily.

Now, I’m not saying the old leadership development model was good by any way, shape, or form, but I do think it is breaking.

And here’s why I postulate that, and then I’d be curious, Tyler, from your viewpoint, how are you seeing organizations react to it?

So, the reason I think it’s breaking, or will break, is: the typical regional manager started as a leasing professional, or a porter, or a maintenance supervisor, etc. They worked their way through an incredibly clunky development ladder where you were good as a leasing agent, so we locked you in a back room as an assistant community manager. And once you survived that, because nobody, few people thrive in it, but once you survived it, we gave you the keys to a hundred-million-dollar asset, never taught you anything about asset management, and probably didn’t teach you anything about actually leading people.

But now you’re the leader of this asset.

You fought your way through that. And then you went from probably a $30 million asset, to a $50 million asset, to a $75 million asset, to a $100 million asset.

And this is where I think the model starts to break.

Most people did not do that the way I did. I did that by having fifteen mailing addresses in five states over five years. I stayed with the same company, moved to a bigger, better property or a bigger, better opportunity across that. Most folks in the industry stay in the same geography, and will go from a BH to a Greystar to a Willow Bridge to a Cush Wake, getting the next opportunity, ultimately getting to that regional manager spot.

Why I think that’s the challenge now, and that we as an industry have to overcome, is that right now, if I am… I don’t actually believe this, but I’m going to use names with it… if I’m a BH manager, and I’ve only known highly specialized services where I get to be a true hospitality manager onsite, I’m not sure you can go work for a Cush Wake now.

I don’t know that those skill sets are necessarily transferable at that point.

That’s why I say I think we’ve got a leadership development problem that we need to face.

Am I being Chicken Little or Don Quixote on this? And if not, how have you seen groups starting to adjust their internal processes to build those next leaders internally?

Tyler Christiansen: Yeah, it’s a really great question. And I think there is, the larger third-party managers are always going to have some economies of scale where they can attract good talent.

However, I do think, having seen many folks make the transition, the highly specialized organizations have way better retention. And they’re less stressful roles.

I mean, you and I know this industry has always had a terrible retention problem. The data is insanely clear for us that our customers that centralize have better retention.

I absolutely agree with you that it is a challenge to think about: okay, where are the next generation of leaders coming from? And it is going to look very different. In many cases, you’re going to have to have kind of this offensive coordinator, defensive coordinator, you know, you have the ops team, and that means something very different than the technology and centralized team.

A good example, a partner of Funnel’s, is UDR. And Josh Gamp, who’s their head of technology, is also their head of centralized operations.

And like, that’s a crazy… ten years ago, the head of technology running operations? Crazy.

Right now, he has to partner with the field operations. And again, that’s kind of like this OC/DC type, you’re on the same team, but they have to complement each other, and the head coach is responsible for both.

So in short, I agree with you that we are in uncharted territory.

What I think, though, is that the companies that embrace centralization are far more attractive because they represent the future and a higher quality of living. And it shows up in the retention numbers.

So while I think you’re right that the transition going from BH to Cush Wake may be difficult, anecdotally I hear more folks wanting to be in: “I want a centralized role. I want to be a multi-site manager. I want to have a resource center doing renewals for me.”

So I think the magnet is probably pulling one way more than the other, which then likely has a really positive impact.

I know point blank, I can tell you a lot of our third-party managers have embraced centralization in part because of the appeal for talent. Their team members want to be part of a company that is doing this.

But I won’t dismiss what you’re saying, which is: if I was a COO at a large operator right now, I would be thinking a lot about this. Where does my next regional come from? How do they work in this new world?

Andrew Bowen: Yeah, and again, that’s the question. I’m like I need more people thinking about this. And if every model’s bespoke, fine. Every model’s bespoke. That means you’ve just got to be to your point you’ve got to be really good at developing internal talent.

And I came from a group that was really good at developing internal talent back in the day. So I appreciate that perspective.

54:40 What’s next for multifamily operations?

One last question, and then we’ll talk about where people can find you, find out more about Funnel all that kind of stuff.

This is a really broad one, so get ready for it.

What’s next?

We’ve talked about leasing. We’ve talked about back-of-the-house type things.

Where do you think the next opportunity in changing the operational model of multifamily exists that isn’t really being tapped into yet?

Tyler Christiansen: Yeah. I’m unfortunately going to come back to two things I’ve said, because I do think they are radically impactful.

The first one is, and this is where, again, like every technology, V1 of that technology usually doesn’t deliver the promise. I mean, you think about the defining companies of the 2010s. They were companies that took advantage of GPS technology and internet technology, and, you know, boom, we have Uber. And we have DoorDash. And we have these combinations that are really exciting.

I think the V1 of AI era were chatbots. And those are cool, they’re fun, they’re helpful.

I think the agentic moment is going to radically change customer experience in multifamily.

I think we all know it’s going to be wildly disruptive for the ILS search process, because we’re going to be searching for apartments in ChatGPT instead of on websites.

What does that do? Does it change marketing spend? Maybe it doesn’t change. Maybe it changes radically.

I think there are going to be a lot of tasks you define agentic AI as doing a thing but giving it autonomy to do that.

We think in the next couple of years, there will be, you know, today people say “AI renewals.” It’s not. It’s a renewal reminder.

AI renewals would be: “Hey, virtual AI renewal agent, you can negotiate within these parameters. Go ahead.”

And that’s coming. That’s coming relatively quickly.

And then I think when you start to tie all that into, much like in technology we’ve seen the big get bigger in the last couple of years, I think it’s a chance…

It doesn’t mean only big operators in multifamily are going to succeed. But I think we all know,those who have been in the industry for a long time, every property management company is not created equal.

And in the old world, they kind of were, because the model was the same wherever you go.

Now, your ability to harness technology, your ability to have a differentiated operating model, I believe when rents get back to growing, which they will in the next 18 months, you are going to see winners and losers.

And in that winners-and-losers world, I think that comes back to what I’ve said before, which is: I think companies like a Cortland, a Camden, a BH, that have truly differentiated service models, will be able to both buy better deals, because they can underwrite them better, because they run them more efficiently and they’ll be able to offer better managed services.

And that will further accelerate that flywheel of winners and losers.

And much like if you look at the NMHC Top 50 list from 20 years ago there’s a bunch of names that are gone and a bunch of names that weren’t there I think we are in for another era of reinvention.

Where I think a lot of the big players will still be around and they’ll be bigger. And I think there are a lot of names on that list that won’t be there in five years. Not 20 years. In five years.

Andrew Bowen: I completely agree. I think that’s absolutely true.

So, switching gears just a little bit, where can people find you? Where can they find out more about Funnel Leasing? All the good stuff. Give us the details.

Tyler Christiansen: The only social media I have is LinkedIn, but I will check it, so please reach out to me on LinkedIn. Follow me.  Tyler Christiansen and then Funnel Leasing. And we would love to connect with you and,and help you on your centralization journey or just other technology vendors, you know, get to know you and see how we might partner.