Apartment Development

Small shifts in data tend to quickly make headlines and dominate conversations. Most recently, it’s the uptick in single-family home sales creating some news about apartment renters leaving to buy homes. But it’s not a big spike – and even if it was, that wouldn’t necessarily be a bad thing for the U.S. apartment industry. Greg Willett and Jay Parsons from MPF Research explain why in this video edition of Apartment Market Dynamics.

By Colin McCarthy, J.D., Robinson & Wood, San Jose, CA

I enjoyed philosophy classes in college. I enjoyed thinking about such questions, as: If a tree falls in the forest and no one hears it, does it make a sound? I enjoyed even more Bart Simpson's reply to the question: What is the sound of one hand clapping? (He immediately held up his one hand and patted his fingers against his palm, making a muted clapping sound).

My enjoyment of these questions has found a natural outlet in the law. The law ostensibly provides you with an answer, whether it be found in a book, or in a code section, or recommended by experts. So it is one of those questions today that is our focus: If a tenant hurts himself in an apartment and the landlord did not know about the condition which caused the injury, was the landlord at fault?

By Colin McCarthy, J.D., Robinson & Wood, San Jose, CA

Even after our little spigot fiasco, my father and I are speaking again. In fact, it did not take long. We both bonded over the fact that later that night, my wife and I walked out of the George Clooney movie, the Descendants. My wife and I both were bored out of our minds and had little empathy for a guy who owned all of Hawaii. I mean, really? I'm supposed to feel sorry for this guy!? Dad, being generally anti-Hollywood applauded our decision to vacate the movie theater in favor of the bar next door.

We got to talking, and we agreed that in the future, it would be best if I not ask him to do repairs on our house. It's not really something I should delegate to him. We decided on the McCarthy "non-delegable duty of repairs” rule - I must do my own repairs.

I toured an apartment complex the other day and was asking tons of questions of my leasing agent (who knew that I was a developer and was just shopping their product). I am always struck by the wall that goes up when you ask demographic questions (I do get that that these young folks are taught to not even address these questions for fear of being hunted down by the crazy Fair Housing police). Unfortunately, as a developer, these are about the only questions that really concern me.

When choosing whether or not to undertake a $50M investment, understanding who the prospective renter is- is actually a critical part of my job. Of course there is always the basic demographic info that we get from our consultants:

When’s the last time you Googled your property? What did you see? Harmful reviews that you didn’t know existed? Outdated property photos? Incorrect information?

Oftentimes we get so caught up in the day-to-day operations and running our apartment business that we fail to put ourselves in the perspective of the consumer (or apartment prospect), the true reason we exist and ultimately the factor that will contribute to our successes or demise. I want to offer a suggestion—er, or rather a challenge—to all on-site professional property managers and staff: Google your property. What do you see?

What might be more fascinating is what you don’t see. Generally, when a potential renter finds us from a traditional ILS (i.e. apartments.com, apartmentguide.com, etc.) and expresses interest, he or she will most likely Google that property, look for reviews and other insightful information that will guide their decision. On the flipside, prospects already aware of a community’s name might bypass an ILS, and Google a property’s name to gain knowledge. This is where savvy on-site staff can truly shine by utilizing all outlets available to flood a search engine with pictures, amenities, and language that can sway a prospect to rent. So, what will you find when you do a Google search?

By Linda Day Harrison, theBrokerList, Chicago, IL

Today more than ever, many people do not have traditional sources of employment income. With the job market shrinking, many of us are working for ourselves and are creating jobs by starting businesses and new ventures. With that being said, how does a self-employed individual purchase a residential or commercial location with the stringent financing requirements currently in place?

By Jo-Anne Oliveri, ireviloution intelligence, Brisbane, Australia

Sadly, when carrying out due diligences many agents buying a rent roll are not sure what they are looking for. This lack of understanding means most pay a hasty glance over files and computer reports. On the surface they all look fine, but it’s a bit like an iceberg, we need to understand what looms below.

We are all in the industry because we are good sales people. Ultimately, isn't this industry all about our ability to sell? Yes, we promote the best features and benefits of our products and services, but as selling specialists we also need to understand that whilst it looks good on the surface, there may be landmines below. I’m not saying don’t buy rent rolls, just be aware of what it is you are purchasing.

When recently asked about which skill I felt was the most important for a real estate developer to possess, I was stumped for about thirty seconds (which is an eternity when someone is staring at you and waiting). My mind raced. How could I not just rattle-off something well thought out and brilliant? Shouldn’t this be a question that every developer must be able to answer without flinching? Well- I flinched. But at the end of that short eternity, my answer was ‘They must be great storytellers.’

 I say this for one simple reason: At his most basic level, the developer is a master salesman. We sell our visions and dreams to our investment committees, the communities in which we work, municipalities, equity partners and debt providers, and eventually to the end user.

By Carla Toebe, New Century Realty, Kennewick, WA

They say that abandonment is a landlord’s or property manager's worst nightmare when dealing with a tenant. How do you know it is really abandonment? Sometimes it’s obvious when everything is gone, the place seems perfectly empty, and the tenant's keys are lying on the counter. But what if the place is full of furniture, the food is still in the cupboard, and you can't get a hold of them? They haven't paid their rent, they haven't returned your phone calls, no one has seen them, and you can't get a hold of anyone on the emergency contact form you had them complete when they moved in. Surely this means they must have abandoned the place. So you change the locks, and uh-oh! There they are coming back claiming you have now burglarized their place. Oh no! This can't be, they clearly abandoned the place and you took all the steps you had to take that were required by law.

A guest post by Samantha Harvey, General Waste Collection, Lancashire, United Kingdom

With sustainability becoming more important to the general population, there is an ever-increasing necessity to provide eco-friendly properties. The rise in popularity of green technologies has led an industry that was once seen as expensive and niche-based into one that has competitive prices for many aspects of the building process. With the decreasing initial price disadvantage combined with the always present efficiency positives, the green movement presents a good deal of incentive to implement more eco-friendly resources. With the majority of greenhouse gas emissions coming from buildings, incorporating sustainable processes in homes is vital for curbing the impact of global warming.