Boxed in

  • By Laura Kusisto
  • Published November 2015

As online buying increases, so has package delivery and handling. The issue has grown so large that one REIT, Camden Property Trust, has chosen to stop accepting package deliveries.



Boxed in

The biggest property managers in the U.S. are being crushed under a mountain of packages, leading one large apartment operator to stop accepting deliveries and others to experiment with ways to minimize the clutter.

The moves are at the center of two colliding trends: an increase in apartment living and a surge in online shopping. The result is a rising tide of packages with no good place to go.

U.S. online retail sales are expected to swell to $334 billion in 2015, up from $263 billion in 2013, according to Forrester Research Inc., a research and advisory firm. Analysts at Forrester expect that number to increase to $480 billion in 2019.

The onslaught has turned management offices of apartment buildings into de facto receiving centers as landlords grapple with recording packages, tracking tenants down to pick them up and finding places to store the parcels.

Camden Property Trust, the 14th-largest U.S. apartment operator by number of units, stopped accepting parcels at all of its 169 properties nationwide this year. Executives said the Houston-based landlord, which has roughly 59,000 units in 10 states and the District of Columbia, had received almost a million packages in 2014, and the rate was increasing by 50 percent a year.

Each package results in about 10 minutes of lost productivity, Camden executives estimated. At a rate of $20 an hour for employee wages, that amounts to about $3.3 million a year, they said.

"Ultimately, this was going to eat our lunch," said Keith Oden, president of Camden. He refers to the situation as "package-gate."

Camden rolled out the policy earlier this year and fully implemented it this summer.

Other big landlords are looking for solutions. AvalonBay Communities Inc., the 10th-largest operator with 83,000 apartments, has experimented with installing electronic lockers in about a dozen properties. Delivery people leave packages in a locker and residents get a code to open it.

Some landlords are starting to allow tenants direct access to the package room, protected by a keypad and security cameras. Some higher-end buildings have a 24-hour concierge staff dedicated to making sure residents get packages. In some cases, building managers seek permission from tenants to enter their units to drop off packages, to avoid the extra back and forth of tracking people down.

"The goal is for us to work out a system where our associates aren't having to touch and deal with those packages. We want to get out of being the middleman," said Cristina Sullivan, executive vice president at Atlanta-based Gables Residential, which manages 31,000 units from New Jersey to Florida.

Equity Residential, the largest publicly traded apartment landlord with some 108,000 units, now has height and weight restrictions to help manage the 3 million packages it expects to receive this year. "When I went to a property and saw a wooden crate that had about a five-foot statue in it and weighed about 500 pounds, we kind of said 50 pounds is about as much as we will go," said David Santee, the company's chief operating officer.

Many landlords are likely to monitor Camden's experience closely, some observers said.

"They're realizing that it can't continue as it is," said Rick Haughey, vice president of industry technology initiatives at the National Multifamily Housing Council (NMHC). "It's just becoming too much."

The number of renter households has increased by 770,000 on average annually since 2004, according to Harvard University's Joint Center for Housing Studies, citing census data.

Landlords have more power to impose restrictions these days, with low vacancy rates giving tenants fewer options. But analysts noted that with a surge in new apartment supply in the pipeline, especially in higher-end markets, landlords who refuse package-delivery services run the risk of alienating tenants as the market slows.

Camden's new policy is more extreme than any of the other large apartment operators, said Dave Bragg, an analyst at investment-research firm Green Street Advisors. But, he said, "It's consistent with the sense of frustration that we've picked up from apartment operators."

Lisa Malin, a community manager at Camden Deerfield, a 292-unit garden apartment project in Alpharetta, Ga., owned by Camden Property Trust, said the volume of packages the building received last year "overwhelmed our lives." Residents would rush in to get packages just as the management office was closing or came knocking on the glass early in the morning, before it opened, she said.

Some residents of Camden buildings said the policy makes receiving packages more of a slog. They must pick up packages at a nearby post office or carrier center or have them shipped to work or friends and family and bring them home.

Camden said it works with carriers to give them access to the building so they can drop off packages outside residents' doors if they prefer, although that exposes the goods to the possibility of theft.

Braden Christian, a 26-year-old engineer who lives in the Camden Holly Springs complex in Houston, said he and his girlfriend have pared back their online shopping to just one package every few weeks since the new policy went into effect over the summer. They have the items shipped to her mother's apartment building, he said.

"Package delivery is almost a basic amenity. It's almost like they just told us that they're going to stop doing maintenance," Christian said. When their lease is up in May, they "definitely won't stay," he said.

Jed Billings, a 43-year-old travel agent who lives in the Camden Farmers Market, a midrise apartment complex in Dallas, in August started an online petition opposing the new policy. He got about 300 signatures, he said.

Billings said he receives two or three packages a week, and it can take an hour round trip to drive to a drop-off center or post office, where parking is scarce and parking tickets cost $45. When his lease is up in March, he doesn't plan to renew, he said.

Oden of Camden Property Trust said most of the uproar is coming from a small percentage of residents who are heavy online shoppers or run businesses out of their homes that require them to receive packages daily.

Still, "I'm not going to say that we didn't catch a few arrows in the back," he said.