Lightovation Report: Multifamily Housing Trending as a Driver for Showroom Business
The June edition of the Lightovation resi-oriented trade show and the Lighting One lighting co-op convention – timed to coincide with Lightovation in Dallas last week – was an ideal time to take the collective temperature of distributors now that the noise regarding tariffs has settled down.
Lightovation and the Lighting One convention each provided the opportunity for retailers to meet with manufacturers face to face to work out any issues or challenges — including re-evaluating inventory and working out longer terms.
Showrooms attending both events agree that while single-family home sales have slowed (on a year-over-year basis), there has been an uptick in two areas: remodeling and multifamily.
The remodeling sector – which includes updating lighting fixtures and adding smart controls throughout the home – is holding its own. Long-time homeowners who aren’t motivated to sell and face a much higher interest rate than when they bought or refinanced are instead renovating popular rooms such as the kitchen, primary bedroom, and main bath because they realize they will be living in – and looking at – those rooms for longer than anticipated.
When it comes to what showroom buyers were looking for at Lightovation, the answer was a little bit of everything. Cindy Agers Strong of The Lighting Corner in Michigan recently completed some light commercial work that came about from a residential client. “I had done the lighting for his home a few times previously and he thought of me when he needed decorative statement and functional lighting for a business he owns,” she said. While Strong said she is not actively seeking more commercial work, she certainly is open to the opportunity. In fact, more and more showrooms are finding a cross-over in business from residential to hospitality projects as well as multi-family and office projects.
Allan Margolin, president and owner of M&M Lighting in Houston, has done a booming business in the multi-family sector for decades — not only in Houston, but all over Texas and beyond. With Texas attracting the likes of Chevron and SpaceX, among 200 other corporations that recently relocated to the Lone Star state, the multi-family sector continues to be a steady source of reliable business for M&M.
According to independent sales representative David May of DM Sales in Arizona, the Phoenix area has been especially growing with an influx of businesses. An article in the AZ Central recently reported that “Arizona has become one of the most important states in the country for deploying data centers, with projects from greater Phoenix to Tucson.” In addition, the state has attracted semiconductor manufacturers, medical research facilities, tech startups, fintech, and software developers. This mass business migration means one thing: multi-housing needs to accommodate the large influx of employees.
Showroom buyers are seemingly more apt to attend different lighting shows than they have in the past, looking for product categories they might not have sought out previously because of the changing customer landscape in their selling area.
Multi-Housing News recently released its findings on the sector (using Yardi Matrix data) and examined smaller markets that recorded exceptional performance last year and that point to sustained growth moving forward. The data points Multi-Housing News used were employment, deliveries, construction pipeline and occupancy, as well as investment metrics.
The Top 10 Emerging Markets that Multi-Housing News pinpointed were (in order): Tucson; White Plains, NY; Madison, WI; Central East Texas; Knoxville, TN; Lexington, KY; North Central Florida; Columbia, SC; Columbus, GA; and Lafayette, IN. To read Multi-Housing News’ report and learn why each metro was selected, click here.
Until interest rates for home mortgages comes down, spurring home sales again, the multifamily sector seems worth pursuing, depending on how well your store’s product assortment fits developers’ needs.
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