Multi-Housing News - April 2009 - (Page 8)

How do you think the Obama administration will impact the multifamily industry? The new administration and the new Congress seem to be embracing the concept of a more balanced housing policy, which is something the multifamily industry has been espousing for years without finding many supporters. If this sentiment continues to hold sway, it will be a positive for our industry in the long run. In addition, the Obama administration has included items in the stimulus package and the new budget that address affordable housing programs and needs. I also believe anything that the Obama administration can do to improve the overall U.S. economy will have a positive impact on the multifamily industry. Is demand slowing for corporate apartment programs in the current economy? Demand for corporate apartments has slowed. The declining demand is impacting not only occupancy but is also putting stress on current pricing models. The slowdown is impacting each of our markets equally and seems to be reflective in general of a slowdown in corporate travel. With the challenging economic conditions, we believe there is pressure on many companies’ travel budgets. And this is reflected in the current activity we are experiencing in our corporate homes division. Interestingly, 2008 was one of the strongest years our corporate homes division has ever experienced, and this was driven primarily by a strong demand cycle. We began to see evidence of a decline in the fourth quarter of 2008. What’s your strategy for retaining residents during the downturn and beyond? Resident retention is always an important issue to monitor and control in any economic cycle. In periods of increasing rents, a higher level of turnover is often not a negative factor as it enhances a property’s ability to improve the rent roll. As a balance in a slowing economic cycle, it is often more beneficial for a property to have a lower level of turnover in an effort to reduce vacancy loss and redecorating costs. Given the current economic condition in most of the markets in which Gables is operating, the focus for our operations team is to minimize resident turnover in 2009. As such, Gables has structured creative resident retention programs that reward resident tenure and help promote renewals. We’ve found that simple gestures can go a long way in helping residents feel appreciated so that they decide to stay in their current homes. Our program includes such things as carpet sham- poos, apartment painting, front door facelifts, lease term flexibility and ancillary services. In addition, renewal pricing strategies and lease terms are evaluated to maximize property value and current cash flow. Great customer service is always the best way to maximize a property’s resident retention, and this remains at the core of our daily efforts and activity. What NOI tips can you share with MHN? Growing revenue will be difficult in 2009 from current revenue sources. To increase revenue, look for new ancillary services or a new way to provide those existing services in a bundle that is better or more convenient for the resident. Smarter, more efficient ways to do the job, and carefully controlling variable expenses will be critical to maximizing NOI in 2009. Minimizing expenses is always a key factor in maximizing NOI, but in times when rent growth is slow or non-existent, we will have to look for more creative ways to achieve expense control. Gables has made it a key focus and we are challenging our associates to find new ways to help achieve this goal. By encouraging the whole team’s involvement in the process we believe we can accomplish greater results. MHN To comment, e-mail diana.mosher@nielsen.com. MHN ONLINE From Apartments to Corporate Housing Rogers, Ark.—M. Kaplan Cos. LLC, a Houston-based owner, operator and developer of multifamily properties, recently converted its Ranch at Pinnacle Point, a 392-unit Class A apartment community in Rogers, Ark., into a corporate housing solution that enjoys a 95 percent occupancy rate. When the sub-prime crisis hit, the community was sitting at 31 percent occupancy after nine months of leasing, and the shadow market was deeply affecting apartment fundamentals. “I took a look at the asset and the surrounding community and what the anchors were and saw it was an opportunity to use innovative ideas,” Matthew Summers, president of management at Kaplan Management Co., tells MHN. As he explains, the community provides corporate residents with the same amenities as a hotel while charging less. To read more about this and other innovative solutions, go to www.multi-housingnews.com/KaplanCorporateConversion 8 April 2009 | Multi-Housing News | Official Publication of Multi-Housing World http://www.multi-housingnews.com/KaplanCorporateConversion

Table of Contents for the Digital Edition of Multi-Housing News - April 2009

Multi-Housing News - April 2009
Contents
From the Editor
Executive Insight: Sue Ansel
Finance: Fannie Mae & Freddie Mac
Quote of the Month
Market Forecast: Texas
Profile: Affordable Developers
Operations: Green Laundry Rooms
Technology: BIM
Kitchen & Bath: Tile Installation
Perspective: Doug Bibby, NMHC

Multi-Housing News - April 2009