Apartment Blogs

 Contradictory signals are exhibited in the apartment sector's recent performance across many metros throughout the country. That mix of good news and bad news is especially pronounced in metro Los Angeles. Key among the factors that make the gigantic Los Angeles apartment sector so complicated is that the metro isn't in any way, shape or form a single market. Instead, it's a multitude of individual markets drastically different in terms of factors such as product characteristics, property ownership profile, and resident traits.

Let's break down some of those differences across select neighborhoods to get a feel on the variety of influences seen on LA's overall stats.

The Hollywood submarket provides as a good example of the patterns taking shape in the more urbanized areas of metro Los Angeles. After Hollywood's apartment occupancy rate got as low as 92.4 percent in late 2008, this submarket managed to post substantial demand throughout 2009, recapturing some of the renters who previously had left conventional apartments for alternative options, namely the area's meaningful stock of individually-owned condos offered for lease. By the end of 2009, occupancy was back up to 95.1 percent, certainly still below the long-term norm but dramatically improved from the year-earlier rate.

If you’re reading this blog, chances are you are dedicated to doing your job right. But just as much as doing your job right involves knowing your business and completing necessary tasks efficiently and effectively, it also means taking care of yourself. After all, if you’re worn down and stressed out, chances are your work will ultimately suffer for it, no matter how dedicated you are. So for all of you workaholics out there, yes! Believe it or not, you should consider taking care of yourself and making a concerted effort to find some downtime nothing short of a vital part of doing your job right.

But even if you are convinced that creating a good work/life balance is something you should attain, that doesn’t necessarily mean that it’s simple to do in this industry. Following are a few tips for finding the time you need.

1. Create a back-up system.
Just because you need a break doesn’t mean that all work-related issues will grind to a halt. In order to make sure everything gets taken care of whether you’re in the office or not, it’s important to have a back-up system in place. Depending upon your situation, a back-up system may consist of extra staff on hand to make sure someone is there to address tenant concerns or property issues 24/7 or just an answering service to ensure that tenants’ calls are answered no matter what time of day they come in.

I know I'm dipping my toes into dangerous waters here, but I think it's time we take a good, hard look at the data surrounding social media and the hype associated with it. I fear I may be taking my life into my hands, but we've got some new data to work with that may start some very valuable conversation - so to me, it's worth the risk!

The industry marketplace is filled with seminars, tutorials, podcasts, chat rooms and articles on how to get the most out of your social media marketing strategy. There is no denying that our culture is embracing social media in a variety of aspects of life, however, the data is currently showing it has not gained enough of a foothold in the rental housing market to be an effective leasing or community-building strategy. Based on data from SatisFacts’ 4^th Quarter 2009 Annual Resident Satisfaction Surveys, when asked “When you rented at this community, what sources of information did you use to find out about the community?” only 1.24% of residents identified social networking sites, such as Facebook or MySpace…and Twitter was not identified by any respondents.

 It's an odd bunch of metros on the list of the nation's recent apartment demand leaders.

In one camp are areas like Austin and San Antonio. Those locales added lots of new supply that progressed through initial lease-up at a rapid pace during the past year. And, at the same time, move-outs from their existing stocks were held to minimal levels since recent job cuts proved comparatively mild. Austin absorbed almost 7,800 apartments during calendar 2009, and the demand tally in San Antonio reached a little over 4,400 units.

In the perhaps more surprising story, top absorption centers for the past year also include several markets that added only a few new apartments that would help stimulate leasing activity and that suffered dramatic job losses that would have drained renters from their existing apartment inventories during a normal economic cycle. What pushed up apartment demand in those areas was a resurgence of home and/or condo sales, reducing the volume of shadow market alternatives offered for rent, after those other options had captured an unusually large share of total rental demand over the previous year or two. In a pair of the most striking examples of this pattern, the Inland Empire posted demand for just over 3,700 apartments during calendar 2009, and Orlando absorbed nearly 3,500 apartment units.

All this talk about a depression, soft market and price drops. OH MY! Not to mention pay freezes, working twice as hard for half as much traffic, it's not a wonder that there is a lack of motivation out there. How do we change this and re-invigorate our teams, win leases, and enjoy our jobs once again? The apartment industry is an awesome industry - how do we stop singing the blues and bring that skip back into our step?

If you talk to my friends, business partners and co-workers, they will tell you I am a HAPPY person, always with a smile, a laugh, sunshine in my eyes, and a skip in my step. How do I keep the skip in my step, even in the midst of all this bad news?

It's as simple as changing your tune - literally.

“The customer is always right.” Chances are, you’ve heard (and perhaps even doled out) this bit of advice many times over your property management career. Obviously, there’s a lot to be said for applying this philosophy to your own business dealings. Particularly in an age of automated electronic service, there is so much to be said for making each of your clients feel as though they are special and well cared for. The bottom line is that, these days, good, attentive customer service is very much the exception rather than the rule. Which is great, great news for property managers who find themselves in one of the few high-touch industries where it’s still possible to actually provide one-on-one, memorable customer service.

That’s the good news.

More difficult is the fact that, though property management may be a high-touch industry that affords you the opportunity to make an impact on your clients, chances are when it comes to customers, you’re juggling a whole lot of them at once. Not only are you contending with the task of keeping the property owners that sign your checks happy but, in many ways, tenants are also your customers. Which means, depending upon your situation, you may have many, many customers to please. And sometimes, the best interests of your tenants and property owners simply don’t align. So what exactly are you supposed to do when situations like these arise? After all, you need to protect your property owner’s assets, but you will ultimately fail your property owner if you are unable to balance his best interests with those of his tenants, ultimately resulting in increased vacancy rates and a loss of rental income.

I recently posed a question on LinkedIn.com asking what individuals or companies are doing to prevent burnout, stress and overall disatisfaction by their employees.  The answers people supplied were great, but made me wonder about a few things. 

The majority of the answers were geared toward me, individually, giving me ideas as to what I could do to prevent this problem.  The other interesting note was that a high majority of the suggestions were focused on the on-site staff preventing the employee stress and burnout.  Ideas such as taking a walk, eating lunch together, holding an informal meeting to address the issues, etc. - these are all focused on the on-site and immediate supervisor completing the actions.  What almost no one supplied was what company policies are in place to address standing problems and prevent future ones.

Who has a company designed to maintain a high level of employee satisfaction?  Anyone have a designed plan for addressing employee stress?  How about programs to proactively prevent issues of stress and burnout?

Across the 64 markets that form the core of MPF Research's U.S. apartment sector analysis, revenues have come down an average of 7.7 percent since the period of national job loss kicked in at the beginning of 2008. This change is calculated looking at the shift in occupancy as well as the movement of effective rents for new leases. Typical revenues faltered by 4.4 percent during calendar 2009, with nearly all of that loss focused on rent cuts. The decline during calendar 2008 was at 3.3 percent, registering mainly in the form of dropping occupancy.

Examining change on the metro level, by far the biggest winner across the country over the past two years was El Paso, where revenues actually climbed meaningfully - rising 5.2 percent. Separating El Paso from the pack, Fort Bliss is in the midst of expansion that is directly bringing about 15,000 jobs to the metro and indirectly is creating spin-off support positions needed to serve the additional populace. (Keep in mind that job info from the Bureau of Labor Statistics excludes active-duty military personnel. Thus, while the BLS is showing that El Paso lost about 4,000 positions during the past two years, the total employment count in actuality experienced a sizable bump.

Pittsburgh was the one additional market across the country where the change in apartment revenues stayed in positive territory during the 2008-2009 time span. A mild rise of 0.8 percent registered there.

Many apartment communities have adopted utility billing programs as part of their energy management initiatives.  Properties will use these programs to help encourage conservation, share the burden of utility costs, advertise lower rents, and to pass along utility rate increases as they occur instead of waiting for the lease to renew.  These programs can be of value but ONLY if they are done correctly.  Unfortunately, I often find that there is substantial room for improvement.

First, let's consider the business model of the billing company.  They get paid based on the number of bills they send out each month to your residents.  They don't get paid based on how effective the program is - meaning they don't have any incentive to ensure the program is meeting the property's goals.  Further, once a property starts a billing program it is hard to stop which means the billing company has a rather secure source of revenue.  These programs are hard to stop because the properties build them into their leases and rent structure.  Also, many of the billing companies try to get management companies to sign long-term contracts with auto renewals - don't do those.

Before you begin a utility billing program for any utility type (water, electric, gas, etc.), I strongly suggest that the property take measures to make sure the consumption issues have been addressed prior to starting.  Trying to pass along the cost of utilities when consumption isn't where it should be is going to mean higher bills for your residents which leads to complaints, move outs, and poor collections.  Trying to get residents to pay for your deferred maintenance is a recipe for failed programs.  It is much easier to get residents to buy into these programs when the property has done its part to ensure the bills represent controlled or "normal" usage.

I toured a community with a a client recently, and as we pulled up, commented on how impeccably clean the grounds were. (Not a small task, given the age and size of the community.) My client said, “That’s because Lincoln works here. He is amazing. There he is now”. As we approached, Lincoln waved his shovel in the air in greeting. He came up to the car with a big smile and an enthusiastic “Hello! How’s it going?” My client commented on how good things looked, and he said, “Oh, thanks. They could look better - I’m working on that nasty pile of snow in the corner now.”

A thankless job, grounds. Many think it an easy position that anyone with a modicum of responsibility can do, and others think it a terrible job that anyone (including groundskeepers) would hate to do. Both assumptions are wrong.

Groundskeepers clean up after people, pets and the elements all day long knowing the next day they will return and start all over again. It makes me weary thinking about it. Funny, the really good groundskeepers I have had the opportunity to work with never seemed to get weary. They see in their position the opportunity to be creative, accountable and do tangible work every day, and understand the impact their efforts have on value creation and resident retention efforts. Making the community just right brings them strength and satisfaction. Lincoln has the kind of attitude that makes you smile, and think, “Why can’t everyone be like him? I want some of that sunny disposition!” He may not aspire to be president of the company, or even the manager. Yet, Lincoln is the kind of employee in the kind of job that should be revered and respected in our organizations.

If you have a great groundskeeper, stand up right now, find them and tell them how much you appreciate them, and how much their efforts mean to the community’s, (and your), success.

Lori Snider is an accomplished speaker, marketing consultant and sales expert serving the multifamily industry.  Her blog, www.rentplicity.com offers commentary on sales, marketing and retention for the multifamily industry.  You can also find her at www.lorisnider.com.