Recorded right after NMHC Annual, this episode looks past the noise to what’s actually shaping multifamily right now. Alex Howe, SVP Marketing + Growth at Funnel, and Tyler Christiansen, CEO of Funnel, unpack how sustained cost pressure is driving real operating decisions, why early AI hype cooled, and where AI is finally delivering value inside centralized workflows.

They break down:

PS: Forum registration is filling up fast, register today.

Episode transcript:

0:00 The Report — Beyond the headlines on AI, policy, and capital pressure

Alex Howe: Before we jump in on today’s episode, a quick heads up if you’re interested in going deeper on any of the themes we cover on this show. Those tend to be AI, centralization, and how multifamily leadership is evolving.

That’s exactly what we focus on at our annual conference. Forum brings together more than a hundred multifamily executives for candid, peer-level conversations. This year it’s happening March 24th to 26th at the Camelback Inn in Paradise Valley, just outside Scottsdale. We’d love to see you there.

The link to register will be in the show notes, or you can go to funnelleasing.com/forum.

1:27 NMHC big takeaways

So Tyler, we’re recording this Thursday, January 29th. NMHC Annual just wrapped in Vegas. It’s known as the infamous Blue Blazer event, where the industry talks about where it’s heading. Tyler, I think—and I’m glad you’re not wearing a blue blazer—I think we had a conversation about the blazer you wore earlier. But after a few days of conversations with operators and leaders, what stood out most to you? And what do you think people are under- or overestimating right now?

Tyler Christiansen: No, Alex, I definitely did not wear a blue blazer. It wasn’t pink either. I wanted to respect the stodginess of NMHC Annual, so I wore a gray blazer that you bought for me—so thank you.

The vibe at Annual this year felt pretty pessimistic. Our good friend of the pod, Jay Parsons, posted that he thought it was neutral. If we’re calibrating between negative and neutral, I think that gives you an overall sentiment of the industry right now, at least as it relates to this demographic—asset managers, investors, deal makers.

And I think that is a fair framing. It tells you that we’re in a tough time no matter what. It is a challenging market for multifamily, which we’ll unpack in a second. And a little bit of that variance certainly depends on the markets that you are in, right?

If you’re in Denver, Colorado, Salt Lake City, Utah, Austin, Texas, Tampa, Florida, you are feeling like, I don’t know that rent growth’s coming until ’28, right? They’re looking pretty far out.

No sarcasm, I thought this executive was joking with me when they told me 2030 was when they think rent growth is coming back. 

And that boils down to the fact that we know there’s been a wonderful, for American renters, influx of supply to the market. What we didn’t anticipate was that demand would drop off, and it has dropped off for various reasons that have been unpacked in many economists’ podcasts.

But demand has dropped off. Supply has not dropped off very quickly. We’re still working through a backlog. There are still units coming online. And then probably the most surprising thing, even beyond the fact that demand dropped off, was that there are still deals breaking ground.

And we are working through a backlog of new inventory. There’s a lot of capital that still has an incentive to build right now in the marketplace.

And so all of those factors lead to, generally speaking, again, a pro–American renter type state. I’ve got several family members that are renters. They’re very happy. Renewals are not going up.

But if you are my dad, who’s an asset manager, or if you are a lot of these blue blazers, it’s tough, because the deals don’t pencil anymore.

Because ultimately every asset in the world wants to be able to get in at X and exit at Y. And so it’s hard to put money to work when you’re not sure how you get to Y.

So we’re still in that world.

What I will say for the operators listening, for the technologists listening, is that it turns the conversation, of course, to what can I do about it?

And if rent growth isn’t there for a couple of years, it really only leaves one lever. And that lever is cost.

Interestingly, I noticed that a lot of the folks that thought AI was the silver bullet a year ago have recognized it is not that. But it is an incredibly powerful tool that they need to continue to understand and unpack, in particular, as you referenced Forum a second ago, how can I plug AI into centralization?

If I can’t reduce headcount at a three-person property, the staff of three, perhaps with centralization I can run more efficiently.

So I think we’re going to continue to see a real focus on operational excellence, because there’s no easy answers.

But my takeaway from Annual is that folks have come to terms with the new reality, which is rent growth not coming back anytime soon. And therefore, we need to embrace operational discipline if we’re going to drive cost and unit improvements.

5:09 Is the future of multifamily AI + Humans, or AI-only?

Alex Howe: So let’s lean into that AI discussion in particular. There’s a very solid piece out from Brad Hargreaves, who writes Thesis Driven, framing some recent developments between ourselves and Elise AI. As Brad points out, the story is really more about the proxy fight over how AI shows up in multifamily operations.

We at Funnel really came up as a CRM built for centralized, human-led leasing. We have since developed a ton of AI tools that obviously supplement and do things that those teams cannot do in the mundane and the day-to-day.

Elise started more with lightweight AI handling conversations and has expanded further into leasing with their AI-first CRM. Where things have collided, it seems, is more at the integration layer.

So Funnel’s push for tighter integration terms is to keep PII and protected work and data inside our CRM as the system of record, without having things, in many cases, manually pulled into Elise’s free CRM. Elise’s pushback is saying that limits competition and how their AI learns.

A client quote from that article reads, “I’m a big, fully invested customer of both. We’re intimately involved in both products, fans of both. I love that the two companies are having an arms race of innovation, but everyone should play nice in the sandbox. If I’m Tyler, I get it. I would feel the same way. I’d think we didn’t integrate with you with the sense you were going to play dirty within the integration field.”

At the core, this comes down to two different bets on the future: AI assisting humans versus AI doing nearly all of the leasing and sidelining some of the teams.

Tyler, anything you wanted to clarify about the article? We’ve obviously heard a lot of buzz about it. And can you share some perspective on where we see the future of AI working alongside teams differently than some other vendors in the space?

Tyler Christiansen: Yeah, for sure. First of all, I had never met Brad before he reached out for this article. We didn’t ask him to write the article. And everyone should follow Thesis Driven. He does a fantastic job of writing on the PropTech space. I really grew to respect his professionalism as a journalist through this process.

So thank you, Brad, for doing as fair a job as possible.

And I think that my next point would be that we tremendously respect the Elise AI team. I love the quote that said it’s an innovation arms race. How great is that, right, for the industry?

It’d be one thing if there was this one technology that could be the best centralization tool, the best AI tool, and you don’t need anything else. So it is great that you have two well-funded, really ambitious teams trying to solve problems for this industry.

We love competing with them. We respect them. And we know that it’s a big industry. There’s room for plenty of us, or multiple vendors, to win in this space.

I think that the only thing that was a little bit unclear to customers in the industry that I want to make sure we make clear is that there’s multiple assertions or references that perhaps this integration may go away.

And I get why that came up. I worked at Entrata back in the day when the Entrata–Yardi integration had a sunset date and customers were forced to pick sides. That’s never been the case here.

We’ve never put a date out there and said, we have to have this resolved by a certain date. There is not a single customer that we’ve ever approached and said, if you don’t turn this off, X is going to happen.

Of course we don’t want to disrupt our customers. And of course we want them to have choice and competition.

The only thing that’s really changed is that until we can come to terms with Elise on, to your point, securing the data and an integration that is scalable—much like we have with Apartment List and Perk and many others—it doesn’t make sense to add new customers to that integration.

But I’m confident that we’ll figure that out. And we’ll be able to continue competing and cooperating in the industry.

Most interestingly, as you pointed out, is the way that Brad framed the conversation, and that we are gladly placed on the side of AI plus humans.

We’ve always believed that humans play a critical role in this industry. We do not believe there’s a future of human-less leasing.

I believe in the future of autonomous driving. Alex, you and I have been in Waymos across the country. I do not believe in purely autonomous leasing. If so, these are boxes, and there’s no differentiation. There’s no need for property management companies.

I believe in property management companies. I believe in differentiation and service. And because of that, Funnel has built its product to really embrace the human elements of leasing while automating away the mundane, as you stated.

And so I think that, again, Elise has done a fantastic job of really pushing the boundaries on some of the components of AI.

I mentioned earlier that a lot of operators had this idea that AI was going to solve everything, and it didn’t do that.

There are a lot of folks that recognize, okay, I’m not going to zero and I don’t want to go to zero, but there are still incremental gains I can find through automation, centralization, and the latest AI technology.

So for instance, Funnel’s partnership with Sierra brings the world’s best voice AI product to our customers. And you can genuinely reduce your need to staff 24/7, because renters love talking to our voice AI product.

And to give Elise credit, they were one of the first to do voice AI really well. Them, plus our acquisition of LeaseHawk, really pushed us into voice AI as a big lever for cost savings.

Yeah, I think that it’s the right framing that it’s an innovation arms race, and we love it. We’re here for it.

Certainly the integration is not going away. We’re not sunsetting it. We’re going to continue working in good faith with our partners and with Elise to sort out the areas where we’re at a disconnect.

And in the long run, though, it’s clear to us the future is AI plus humans. And we’re going to keep leaning into that.

10:20 TPG Real Estate acquires major stake in Corra

Alex Howe: To your Waymo comment. I’m not sure I even fully believe in a fully autonomous driving future based on some experiences we’ve had. But anyway. 

TPG Real Estate just announced they acquired a majority stake in Corra, Lennar’s multifamily development platform. They paired the deal with an additional billion-dollar capital commitment, signaling clearly a long-term bet on scale and operating discipline.

Earlier this year, Corra merged with RKW Residential, creating a combined platform of 52,000-plus units and more than $20 billion in assets. Underscoring that this is less about a one-off acquisition and more about building a scaled, repeatable operating engine.

RKW, we should mention, is a Funnel client and owned by PropTech company Alfred.

Is this kind of investment signal that capital is now prioritizing repeatable operating models over individual assets, or do you see the same shift happening on the operations side as AI and centralization become table stakes?

Tyler Christiansen: I certainly think those are true, but I would actually frame this news as a continuation of the reshuffling of the deck that we’re seeing in multifamily.

So we started off by talking about NMHC Annual, and while there’s not a ton of deals changing hands in the traditional sense of 2021-level buying and selling of properties, there is a lot of reorganizing.

And in the last week, I’ve heard of several more that are on the way. There are more management companies that are going to be closing, and their management is going to be farmed out to large third-party managers.

And in this case, this is more of a continuation of the story of Lennar changing its approach and, in some ways, exiting the multifamily space, focusing in on its single-family build.

And ultimately landing in a place where Alfred got bigger. Alfred is a larger third-party manager now than they were.

And that theme is going to continue.

We do not know exactly how this reshuffling of the deck is going to happen in multifamily, but I would bet my bottom dollar it results in larger operators and fewer boutique operators, particularly as property management companies, as third-party managers.

Unless they are hyper-localized, right? Like, we are the best-in-class operator in San Antonio, Texas. Or they are leveraging best-in-class technology.

Some of Funnel’s customers that may be sub-5,000 units, they operate as well as, if not better than, some of the REITs in terms of FFO and the way that they leverage AI and centralization.

So that’s my bigger takeaway here. We’re going to continue to see restructuring of asset management and fee-management relationships in the industry.

There’s more of this to come. I’m sure in the next Report we’ll be talking about some of the other ones that are moving around.

But net, the mega-managers that we’ve referenced on this call in the past are going to get bigger.

13:04 Executive order targeting institutional housing investors

Alex Howe: President Trump recently signed an order targeting institutional housing investors. This executive order goes after institutional ownership class, specifically in single-family rental—not multifamily as far as we know.

But for now, it mostly kicks off reviews, definitions, and potential legislation rather than real enforcement. Build-to-rent got carved out. Timelines are a bit fuzzy. Even what counts as a large institutional investor is still a little bit TBD.

The bigger tension we seem to be focused on with this order is who owns homes, while the real problem obviously hasn’t changed. We’re short millions of units. Buying is still materially more expensive than renting. And access to mortgages keeps tightening in spite of Fed rate shifts.

Institutional investors still own a relatively small slice of the market. And in many cases, private capital has been filling gaps left by banks rather than driving prices on its own.

There was another GlobeSt article titled “How a Single Trump Tweet Froze a $70 Million Deal,” which showed that that nuance could land pretty differently in practice as well.

So capital is reacting to some political signals, not necessarily technical definitions. And many lenders are treating anything near SFR or BFR as a potential headline risk.

The result is more of a chilling effect.

Tyler, what’s your take on not necessarily this order itself, but the general sentiment behind it?

Tyler Christiansen: Yeah. At Funnel, we’re neither red nor blue. We’re pink. So this is not a political commentary. This is a pro-housing commentary.

And as somebody who—I’ve been very fortunate to travel around the world and lived overseas—America’s housing economy is the best in the world. The quality of housing that we provide and the service level that we provide is second to none.

I feel very strongly about that, and it is a result of housing being an asset class.

And the best example you can look at is what we led the show with, which is the fact that rents aren’t growing in America. That may be bad for folks that are asset managers and they’ve got to figure it out and they’ve got to get innovative. That’s hard.

But it’s great for renters, right? It is unquestionable at this point in time that over the last couple of years, the influx of capital into multifamily real estate has resulted in a better state of living.

As I mentioned, I’ve got lots of family members that are renters, and they’re better off because of the influx of capital into this space.

While I understand the potential logic that institutional buyers buying homes away from first-time buyers is bad, it doesn’t match the reality on the ground.

And if you want to dive into that, I’m going to send you back again to our friend Jay Parsons. He’s written about this extensively. He has a whole podcast on this. He can unpack it with data better than I can.

But our point of view, our kind of core argument, is that anything that has the impact that you just articulated—which I heard firsthand this week in the market—which is chilling, where people won’t touch SFR now with a ten-foot pole because of potential regulation, that looks to me like the same rent-control effect that we’ve seen in places like Toronto, Canada.

Where well-intentioned legislation resulted in subpar housing and increased costs.

And we’re pro–free market here. We’re pro more housing. And I think the data is pretty clear on this.

The last thing I’ll say is that I can also speak from this as a former, quote-unquote, institutional renter.

I rented from Progress Residential. Shout out to my friend Dave Feldman and the folks at Progress.

It was an incredible service that they provided to me and my family, creating rentable housing in a school district that I wanted to be in when I moved from New York to Tampa.

They provided high-quality service. And candidly, it was actually much more affordable than renting from an individual landlord. It was easier to find, and it was very pro-renter.

And so as somebody who used that institutional class and used it to get a foothold in a good school district for my kids, and save money to be able to purchase a home in a good school district, I think that the notion—although I’m sure well-intentioned—is that we align with the majority of multifamily, or the majority of rental housing folks, that think it will not have the desired impact.

17:06 ZRS selects Funnel as enterprise CRM + agentic AI platform for 110,000 units

Alex Howe: We’re going to wrap up with this.

We were honored to announce that ZRS Management, the 13th-largest NMHC manager, selected Funnel as the enterprise CRM and agentic AI platform across their 110,000-plus-unit portfolio.

We also got some really great data already. Properties using Funnel’s products saw 115% more scheduled tours per property and 227% more completed and walk-in tours per property, along with a 26% higher tour completion rate, a 53% lower cancellation rate, and a 50% reduction in no-shows.

Tyler, you were very close to this deal. You and Jackie and her team have spent a lot of time together. Give us a little bit more of the why behind why they went with Funnel at the end of the day, and what you think that signals for other large operators.

Tyler Christiansen: I think that what it signals is that, again, even in tough economic conditions, you can continue to improve performance.

And I think that, like I said, folks that have embraced the fact that it’s going to be a tough couple of years in the rental housing space are not sitting on their hands. They are investing in technology. They’re investing in operations.

And ultimately, we—and I would advise anybody, it doesn’t need to be Funnel—found a partner that was aligned with our objectives.

And the impetus for this partnership was that I had the chance to attend the Z Conference in Fort Lauderdale. It’s a wonderful conference put on by Jeremy Brown, the head of marketing there.

And I got to hear Jackie, their COO, and Darren, their CEO, speak. And it was very clear to me that these are folks that believe in AI plus humans. These are folks that believe we can provide a high quality of service while still improving our operational efficiency.

And so just thrilled with the results. Not shocked by them, given the alignment of the companies and what we were trying to do.

And really excited for what this means for their clients—their asset managers who hire ZRS to deliver excellent outperformance in tough markets.

So yeah, just very grateful for that partnership.

And for those folks listening, you can continue to outperform. It does require investments. It does require changes sometimes, so it can be painful.

But probably the coolest part of this whole story is that we were able to migrate that portfolio in about 60 days over the holidays.

And one thing that always makes me pull my hair out is that sometimes we—and I’ve done this here at Funnel with our tools—you just take forever and you get into analysis paralysis.

When you’re aligned on an objective and an outcome, you can accomplish it in record time.

So major kudos and thank you to the ZRS team for trusting us. And we’re excited to improve on those already stellar results.

Alex Howe: Thanks for listening.