Apartment Blogs

Last June my wife and I had the privilege of attending NAA in Las Vegas.  We stayed at the Luxor and decided on one of our evenings to take a walk to the famous Bellagio.  We had heard so much about it.  It is known for its beauty inside and out.  There was so much positive feedback about this place coming from friends and coworkers, that we purposely put it in our plans to make the trip.  The destination was wonderful but the path to get there was not.  The entire time we walked we were bombarded with people flicking their little cards trying to set us up with escorts.  I was completely mortified and I am sure the expression on my face was the same.  I was completely uncomfortable until I reached the destination I intended to see in the first place.  The Bellagio had invited me on many levels and I responded.

 

Some recent discussions have inspired the following analogy.  I have been too many trade shows over my career, but NAA was my first national event for the multifamily industry.  I did not know anyone!  The looks on many folks faces was priceless.  It was the look of, who are you, what are you trying to sell me, give me your 1 minute speech so I can get my free pen and tote bag.  I really felt for them.  After my trip down the Vegas strip I wondered if these individuals felt the same way I did.  My focus was on the Bellagio.  Their focus was on perhaps a handful of key booths that they planned in advance to visit.  They knew about the company, heard good reviews and wanted to make a connection and experience.  They had been personally invited and were looking forward to their discussion.  They just needed to wade through the all of us card flickers (in their opinion) to reach their destination. 

 

Let's face it...you are tired of seeing them. Yes, I am talking about those ugly roof stains. Are the roofs in your complex covered with black streaks & stains? If so, then you may be surprised by what the staining you see actually is. It is a form of algae called "Gloeocapsa Magma" which feeds on crushed limestone used in common asphalt shingles. The good news is it can be removed using the right roof cleaners and cleaning technique. Many people don't realize what causes the stains on your roof. We have heard almost everything...from residue of jet fuel to the shingles rotting from the insideout.                                                                              

The truth is shingle roofs are manufactured with different degrees of quality. Most roofs applied by builders and roofing contractors are in the low quality to at most mid quality range with few, if any, fungus fighting elements like zinc or copper.  

On February 9th, 2010 a very special and unique event will be taking place in honor of a special Multifamily professional.  The event is entitled, The Peggy Waskom Superbowl.  It's an event where owner managers, vendors, and students will be able to get together and bowl for a fantastic cause.  Below is a bio composed by the Peggy Waskom Committee, of which I am privileged to be on.

 

Thanksgiving is around the corner. I'm going to take a break from my 3-part series on facebook, and be thankful. I'm  thankful for some of the hardest working yet most underappreciated people in our industry - the vendors of the multi-family industry.

I should also point out, that as an industry, WE, ourselves, are vendors. We are vendors to every person who rents an apartment from us. Knowing how bad it feels when a renter takes out their frustrations on us, why do we do that to our vendors? We know that it takes time to learn about someone in order to sell our value proposition (remember all those questions from the guest card?), and how frustrating it is when our prospects say,  "just tell me how much it is," and yet we're always asking this of our vendors all the time. (Remember when you asked your sales person to *JUST* give you a number, without taking the time to explain what you want?) How hard is it to sell on value when you prospect says, "Well, ABC Apartments down the road is giving away 2 months free rent," and we turn right around and tell XYZ contractors their bid is 2 cents too high. Our renters don't buy IT, as we aren't buying IT ourselves. Kinda sucks when the shoe is on the other foot, huh?

Don't get me wrong - smart business is still smart business. We definitely need to know where the market is and demand competitive pricing from our vendors. Whether the service is software, advertising, carpeting, screening, information, bulk purchasing, etc., beyond asking that vendors be competitively priced for the market, the secret to my success has been carefully choosing the right business partner for my needs. THIS is the exact intersection point where smart business becomes GOOD business. The "smart" business person in me would have squeezed that extra 2-3% savings out of a vendor. The "good" business person in me realizes a 2-3% savings will be repaid back ten-fold through a healthy business partnering relationship. The right business relationship can mean the extra competitive edge it takes to succeed in today's economy.

 Most apartment owners and managers operating in multiple markets across the country will tell you that Houston has been a comparative bright spot for their portfolios during the national downturn. But the metro turned in a weak 3rd quarter performance, losing residents in what is normally the seasonal high point in leasing activity and suffering notable rent cuts for the first time during this cycle.

Houston apartments registered net move-outs from 2,760 units during the July-September time frame, taking the overall loss so far during 2009 to about 7,900 units. While demand is holding solid for new properties moving through initial lease-up - almost 3,900 top-of-the-market units were absorbed during the past quarter alone - this top-tier demand can't keep up with the slide occurring in the middle segment and bottom end of the market. Those resident losses reflect that this latecomer to recession now is dropping jobs at a serious pace. The Bureau of Labor Statistics reports about 95,000 jobs eliminating across metro Houston during the year-ending August, downsizing the total base by 3.6 percent.

Houston's net move-outs are coming at the same time that considerable new supply continues to reach completion. Properties totaling another 4,544 units were finished during 3rd quarter, taking year-to-date deliveries over the mark of 13,100 units.

 

So you receive your energy consumption bill in the mail (electric or natural gas).  It's already not a pleasant item to have to open, but you have no choice.  Much to your chagrin, what you owe this month nearly gives you a heart attack.  Then you reflect on how you have to pay all this money this month for your utility bill and yet your home never feels comfortable!! It is still so hot and my air conditioner is always on and nothing, no relief, still uncomfortable!!

 

A quick Google search for the terms "apartment" and "doubling up" gets you about 20,000 hits. Quite a few of those results are articles that feature photos of amazingly wholesome-looking twentysomethings who have combined households to reduce their individual rent payments during today's recessionary times. (Those in the heavily-pierced and totally-tatted set apparently go the lone wolf route, regardless of finances.)

Each story also will feature a quote from a local apartment manager who will state how common the doubling-up trend has become of late.

What you won't see in the article are any reliable numbers that back up the supposedly widespread pattern of behavior. And that absence seems to reflect that such moves in actuality don't occur frequently enough to produce a noticeable impact on apartment market stats.

Like quite a few other markets across the country, Las Vegas registered reasonably decent apartment demand during 2009's 2nd quarter. The metro managed to absorb approximately 1,700 units for the quarter, despite losing jobs at an annual pace of about 59,000 positions (backtracking by 6.3 percent). That demand was enough to push up occupancy by half of a percentage point on a quarterly basis. The June occupancy, figure, then, came in at an even 90 percent. But, of course, occupancy is only half the revenue story, and the bump that Las Vegas posted in its apartment renter count during recent months didn't come close to countering the huge declines suffered in rental rates.

Effective rents were whacked another 2.4 percent in Las Vegas during 2009's 2nd quarter, measuring change on a same-store basis. That quarterly cut took the annual pace of price reduction to 5.7 percent. Furthermore, the sizable downward adjustment in rents seen for the metro as a whole carried through to every niche of the market. Rents faltered by 4 percent to 9 percent in every product age segment during the year-ending June, and losses were at 4 percent to 10 percent in every single neighborhood.
 

The near-term challenges for apartments in Las Vegas go beyond continuing job losses and a vast selection of shadow market condos and single-family homes offered for lease. The metro also is going to have to contend with quite a bit more new supply. About 5,500 apartments remained under construction going into 3rd quarter, with those additions set to expand the metro's total inventory by 3.6 percent. In particular, the Summerlin/West Las Vegas submarket and the North Las Vegas/Sunrise Manor area are going to receive new completions that could be tough to process in a timely manner.

Overall, then, metro Las Vegas looks like it will rank among the nation's weakest apartment sector performers through the remainder of 2009, and that position relative to other metros across the country doesn't seem apt to change much during calendar 2010.

It's interesting that in a down economy, there are so many low-cost opportunities to "wow" residents.  I'm noticing that residents are responding especially well to community-building "interactive" amenities much more so than the usua

l "physical" amenities like pools, fitness centers, and business centers.   It's really shown me the value of more community-building types of amenities as a cornerstone of resident retention and leasing strategy.
In talking to property managers, they all share the same complaint in these economic times.  Old tenants are moving out, and new tenants are not moving in as quickly as they used to.  How are their management companies responding?  Many are slashing marketing budgets and lowering rents.  I don't see this strategy as working well for them, however.  It's a bit of a Catch-22: they need visibility, but they can't afford to buy it.  We're seeing that our most successful customers are actually increasing their budgets for small-ticket items that pay off in big ways, and they are still charging among the highest rents in their territories.

I think the a big reason so many communities keep lowering their rents in a recession is that they get into a bidding war, because they aren't making themselves stand out.   Many offer the same types of "physical" amenities like gyms, business centers, and pools, so that they become relatively indistinguishable and compete mainly on location and price.  But in fact, residents tell us time and again that they are more likely to sign or renew their lease

s, regardless of location or price, when they feel emotionally connected to their communities by getting to know neighbors with similar values and interests.  What they want more than anything is to meet other residents more often, and in the right way!  You might call this a demand for "interactive" amenities, rather than "physical" amenities.  We also notice that some physical amenities, such as clubroom areas, kitchens, or certain outdoor spaces, go largely unused, just waiting for managers to turn that dead space into a profit-generating "interactive" amenity.  The great thing is, creating these sorts of amenities is extremely quick and easy to implement.  Best of all, it's incredibly inexpensive, since communities already have a multifunctional space, and they already have the residents!  All managers need is to pull them together with the right activities and a little creativity.

We always tell our customers to think of their clubhouse as the neighborh

ood's town center or social hub.  Imagine residents filling those empty areas socializing in small groups each week, really getting to know each other, and making friends in the neighborhood.  Those beautiful clubhouse areas are specifically designed for group gatherings!   By organizing such gatherings, managers finally put those spaces to good use and tap into their biggest marketing asset of all - the residents themselves, waiting to meet each other around interest-based activities.  We've seen many types of community-building activities flourish, including:

• Volunteer Groups - organize a group of neighbors to participate in a charity walk, or create a bake sale fundraiser.  Get the staff involved!
• Book Clubs - get residents together to read and discuss bestsellers.
• Gourmet Cooking Classes - bring together residents with a hands-on, live cooking show with a professional chef.  This is an ultra-p opular, high-class amenity at little cost.
• Wine Lectures - have a vivacious wine expert bring together your residents for a trendy, upscale "happy hour."  It's like a night out at a wine bar with friends, but on-site!
• Group Fitness Classes - bring in professional fitness instructors to host after-work pilates or yoga classes once a week.
• Intramural Sports Teams - organize a community softball team to participate in local intramural leagues.  This increases pride in the community.
• Mom-and-tot Play Groups - Buy some inexpensive toys and games for the kids, and host a morning coffee-and-muffin indoor play gathering in your clubhouse.  Moms can relax on sofas and chairs while kids play in a safe space.  Or, organize a bring-your-own lunch outdoor playgroup in a grassy area or playground.

These are just some of the things that we've seen work at our customers' communities over the years.  But especially now, they are really hot!  And we're getting strong feedback that the monthly cooking class and wine lecture program is their number one most successful amenity.  They even use this event as a marketing tool in their "For Rent" magazine ads, on their property tours, and even announce it when new residents are "on hold" when calling in.

Anyway, today I just wanted to talk a bit about this idea of interactive amenities helping communities create a real in-group mentality and a lot of b

uzz among their residents, since it requires a bit of a different mindset.  Next time, I will touch upon some of the challenges we face in dealing with different property management styles, and maybe some of you will be able to offer some insight on that.

I look forward to meeting more of you in the weeks and months to come.

Unlawful Detainer by Attorney Tamara Cross

Many community owners and managers have been through the unlawful detainer process. Not all of them, however, have encountered just how different and difficult one unlawful detainer action can be from another with regards to time frames, discovery and even trial. If you are lucky, your encounter with an unlawful detainer action took approximately three to four weeks and ended nicely in a default judgment without the need to go to court. This article will walk you through the non-default unlawful detainer action and address some of the options that resident/tenants have to delay the process and to make the unlawful detainer action a long, expensive experience. In discussing the difficult unlawful detainer trial, this article will address the delay tactics taken by residents and their attorneys, the defenses raised to complicate the issues, and finally, suggestions on how best to avoid these delays.
 

Summary proceeding

The unlawful detainer trial was intended to be a “summary eviction proceeding,” which means it was intended to be a quick and limited proceeding in comparison to the general civil litigation matters. For example, in a general civil lawsuit, the defendant has 30 days to answer the complaint, but only five days to answer in an unlawful detainer action. Also, the trial in a general civil lawsuit may take over a year to be heard, where the unlawful detainer trial is required to be set within 20 days of the tenant’s answering. The issues in an unlawful detainer action are intended to be limited as well. The right to possession of the premises and the damages resulting from the unlawful detainer are the only issues that should be tried.