Enter your email address for weekly access to top multifamily blogs!

Rainmaker Multifamily Housing Blog

Our blog discusses thought-leading and buzzworthy trends/topics in the multifamily industry - more specifically with revenue management and optimization solutions for your communities

10 Ways to Knock Out Lease-Up Growing Pains

10 Ways to Knock Out Lease-Up Growing Pains

As exciting and anticipated as new developments are, challenges exist. Construction delays, traffic struggles and selling prospective residents on a “work in progress” are just the tip of the iceberg. Some of these obstacles are unavoidable while others can be counterpunched with a strong right-hand of preparation. Here are ten tips specifically designed to help you through the lease-up process, minimizing the risk of the dreaded "terrible twos". 

 

1. BUILD MARKETING MOMENTUM

Pre-leasing is one, if not the most, important phase of a new development. For residents, they get their hands on the latest and greatest apartment to hit the market. For owners/ operators, they hit their occupancy numbers. But neither can happen without compelling marketing, as it drives successful pre-leasing. Think about your community landing page or website – is it asking for contact information? Is it notifying the prospective resident on the next step in the process? If not, you are backing yourself into the corner. Securing contact information for your leasing agents to follow up on should be your number one priority.

Quick Tip: Establish an inviting, branded landing page to collect names and contact information. Nurture your lead list by contacting them for upcoming events and timelines, making them feel as connected to the community, and future home, as possible.

 

2. KNOW YOUR DELIVERY SCHEDULE

New developments are reliant on delivery schedules being on time. To best combat delays, communicate frequently with key contacts from construction, development, operations, marketing and revenue management departments. It’s essential to have an early warning system for delivery issues and delays in order to be proactive in your lease-up strategies.

Quick Tip: One of the closest relationships for a lease-up project should come between the property manager and the construction/development team. Frequent conversations are an absolute necessity. Encourage the community manager to take ownership in the project by frequently walking apartments, hallways, amenities and common areas for signs of progress or delay.

 

3. PLAN FOR SEASONALITY

Multifamily insiders know seasonality can have major effects on leasing numbers. Be proactive by having candid discussions with management and the developer on the challenges of seasonality. Make sure the pro forma takes into account seasonality on both leasing pace and rent growth vs. concessions. Work with the development team to have more units delivered in high rental season if possible. If that’s deterred by construction delays, aim to be 100% leased-up on delivered units in low season.

Quick Tip: Plan ahead for lease expiration management the first year and two years past stabilization so you can correct for any misaligned expirations due to low season deliveries and heavily discounted leasing to fill those units.

 

4. COLLABORATE!

Everything in business is about relationships. So get to know your developers...take them to lunch, sit down and have a conversation outside of the project. Take the time to learn how each person on the team operates, learn their “language” and don’t be afraid to talk to them in their terms. Build their trust and by doing so, you will be better positioned have a true collaborative relationship where your pro-formas needs around seasonality and lease-up are met - securing their payoff.

Quick Tip: Know the strategy. Is it a build & flip, a long-term hold or something else? Marry your strategy to its future situation and understand its process to best connect with your developer. 

 

5. UNDERSTAND THE PRO-FORMA

Take ownership of the pro-forma. Ask yourself – Is occupancy, absorption, and rent growth (or concession burn offs) reasonable for the market? Is the competitor set on target and do their rents align with market conditions? Do you think the exit strategy and capex assumptions are realistic? If you answered "no" to any of these questions, speak up. Do so respectfully and in the developer’s language.

Quick Tip: Be able to talk capex, even if it doesn’t directly apply to pricing. It is the developer’s language and by speaking their language, you are building that connection and understanding.

 

6. WATCH THE LEAD INDICATORS

One might think that a new development will always get the most leads – unfortunately, this is not necessarily the case. Lead indicators start with what absorption is when the first deliveries are real and tangible. After that, take into consideration marketing statistics. If lease expiration management (LEM) was successful coming out of year one, it will help prep operations executives for the next year. Ask yourself: Is your velocity headed in the right direction and did you take seasonality into account? Can rents be increased (or concessions decreased) to make even more (and/or put some cushion in the bank for the low season)? Will we finish lease-up before month 13?

Quick Tip: If you want to lease-up before month 13, look at how rents and marketing strategies can be better aligned to drive traffic and demand. This can help increase revenue by increasing rents (or decreasing concessions) and rent to market conditions when seasonality is high.

 

7. UNDERSTAND FLOOR PLAN POPULARITY

Some floor plans will be duds – it’s as simple as that. The best action-oriented approach you can take with your floor plans is to seek out feedback. Start this process before tours begin by getting individual staff assessments. Lease-up sales teams have a keen understanding of the challenges that come with a new development and have a good eye for which floor plans will lease well and why others will struggle. Continue to garner feedback after tours begin by collecting comments and reactions stemming from conversations between your staff and potential renters.

Quick Tip: Use floor plan popularity as a key data point for leasing effectiveness. Leverage floor plan popularity in your pricing strategies to build demand for the less desired units while driving revenue on the highly sought-after ones. 

 

8. EVALUATE AMENITIES 

List out all possible amenities and begin allocating them immediately. Amenity values should be assessed as early and often as possible. Similar to the various floor plan types your community offers, the different amenities associated with your individual units can have higher (or lower) demand at different times of the year; think seasonality here. Requests for pool views, skyline views, floor levels, larger balconies, and flooring (among other items) vary throughout the year and from market to market. Keep an eye on the velocity of amenities that are renting and adjust accordingly. 

Quick Tip: Don’t be afraid to adjust values for the same amenity when associated with different unit types. Don’t assume that only the fancy amenities like granite countertops and stellar views are the only amenities renters will pay more for. Parking, proximity to the mail center, and even proximity to parks can sometimes play a key part in a person’s decision to rent.

 

9. COMMUNICATE 

Delegation and communication should be first and foremost during lease-ups. The lists of tasks seem to be never-ending for new developments so the distribution and accountability for these deadlines are critical. With so many moving pieces, and people involved, there is a need for constant communication - and not just among the operations, development, and management teams but to residents and prospects. Keep an open door policy. 

Quick Tip: Communication must successfully filter down to the resident level. Residents require their own level of attention and need to stay “in the know” so inconveniences and interruptions don’t intervene with their personal lives. With subcontractors and residents in one place for months on end, challenges can arise. Keep residents informed, alert and privy to future events even when unexpected incidents surface.  

 

10. G.O.Y.B. GET. OFF. YOUR. BUTT.

Lease-ups are not for the nine-to-fiver, as the idea of working overtime just becomes “working”. What gets accomplished when you put the sweat, and the occasional tears in? Everything. 

Quick Tips: 

  • Tour the community building(s) with other key associates Possess a sensitive gauge for your customers’ experience thus far Assess whether the community image and persona
  • Possess a sensitive gauge for your customers’ experience thus far Assess whether the community image and persona
  • Assess whether the community image and persona is where it should be Include multiple ways for creating a sense of urgency with prospects
  • Enlist the media for PR and advertising opportunities Lay the foundation – e.g. initiate hardhat tours, plan a grand opening, use social media to connect, set monthly goals, etc.
  • Lay the foundation – e.g. initiate hardhat tours, plan a grand opening, use social media to connect, set monthly goals, etc.

 

Rate this blog entry:
0
 

Leave your comments