After the lost year that was 2020, many in multifamily are looking forward to the promise of a brisk leasing season in 2021. All signs point to increased demand and strong pricing. However, property managers who are looking to turn units quickly so that new tenants can move in are met with an emerging threat, which all started on a frigid February day in Texas.
Sherwin Williams, a supplier to many multifamily operators, stated, “In an already challenged supply chain due to COVID-19, the February natural disaster in Texas further impacted the complex petrochemical network causing significant disruptions. These production disruptions, coupled with surging architectural and industrial demand, have pressured supply and rapidly driven commodity prices upward. Recovery has been significant in recent weeks and is improving but is still far from complete. The pace at which capacity comes back online and supply becomes more robust remains uncertain. We have been highly proactive in managing the supply chain disruptions to minimize the impact on our customers.”
On the heels of this statement, I posed a simple question to the Multifamily Share Space social media group which focuses on those working in multifamily:
Is anyone having issues turning units due to paint shortages?
More than 100 reactions and 100 answers later, I knew I’d struck a chord. My non-scientific poll received 100 specific answers to the question, with 90 affirming that they were having issues, while only 10 said they were not. Ninety percent is a big deal. This paint shortage is real, especially with the busy season upon us. As one person wrote, “Hard to fathom a shortage in peak season, ridiculous!”
The few responses that mentioned national contracts didn’t report that they weren’t having issues, so there seems to be value in leveraging scale. That, however, is not possible for everyone.
Many commenters have been working to solve this issue, and their insights should be useful to anyone else caught in the same bind:
Work with your supplier to upgrade the paint. This seems to have worked for some, a portion of which reported price matches to the regular paint. There are some concerns about compatibility to existing paint and inconsistent finishes actually causing the needs for additional coats.
Another group of respondents went away from their traditional supplier to find paint elsewhere, some going to retail outlets.
Plan and purchase ahead
Getting out in front of this issue is a smart move, but I’d caution against over buying. One reply indicated that they pre-bought paint based on their summer turn budget so they could have it on hand. While prudent individually, mass buying of limited supply will likely raise prices and exacerbate shortages (e.g., COVID-19 toilet paper shortages).
Although the question was focused on paint, many respondents also mentioned other supply issues for items like appliances, plumbing, lumber and even mulch.
If paint and other supply constraints continue, it may make for another challenging summer, albeit one of a different color than 2020.
A well-known subject matter expert, industry panelist, and trusted advisor in the real estate tech market, Brian Zrimsek is Industry Principal at MRI Software. Brian leverages his experiences as a former client, IT leader, and Technology Analyst to help shape product strategy and direction. You can connect with Brian on LinkedIn.