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Why Nontraditional Data Points are More Effective

Why Nontraditional Data Points are More Effective
Commercial real estate investors and asset managers have been leveraging the same data sources for decades. With continued cap rate compression across markets and asset quality grades, there needs to be a way to win deals that will outperform in a highly competitive industry. Savvy investors have been getting ahead of the curve by leveraging granular, nontraditional data for a much more effective method of analyzing markets and rent growth potential. Utilizing these nontraditional metrics in commercial real estate allows investors to explore new opportunities in submarkets that have been overlooked and make confident, data-driven decisions.  Robust insights in a centralized location provide crucial, real-time information on market trends while allowing acquisitions and research teams to spend more time on tactical strategies and decision making. This is highly valuable for multifamily investors, owners and operators not only for the competitive advantage, but also because it streamlines the underwriting process and research efforts in different markets.  Here are some of the ways nontraditional data points are more effective: Hyper-localized insight Real estate is a hyper-localized industry and any insight on a granular level is not only more accurate, but also more predictive. Real-time metrics on employment, income and population growth when viewed on the zip code -- or even block-level group -- are much more telling than traditional data, which may only exist at the MSA level. Census data is a good jumping off point for analyzing real estate investment opportunities, but it lacks the granularity and recency critical for research and planning. ......
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Is Responding to Your Co-Worker’s Email Really Urgent? Here’s the Tea

------ We’ve all been there: a resident or client has a time-sensitive or decision-influencing question, and we realize a co-worker or different department holds the answer. We send an email requesting the information, and then… we wait. If we’re lucky, the response comes right away, but many times it can be hours, days, even a week or more before getting the answer we need. And until that response comes in, our work idles, our resident or client goes unsatisfied, and we may become increasingly anxious or frustrated by the delay. Is it unreasonable to expect a prompt reply to an email? Let’s explore. Our employee engagement surveys ask employees to what extent they agree with this statement: "Issues I raise are responded to within 24 hours by my supervisor, peers, or other departments." Depending on your role within a property management company, the experience can be quite different. According to the 2020 Swift Bunny Index: 83% of Corporate Operations employees (executives, director-level, department heads) agreed that they receive responses within 24 hours. However, the rest of the organization has a very different experience. Here’s the breakdown for everyone else: Only 59% of On-Site Team Members (Management, Leasing, Maintenance) and 57% of Corporate Support Services (Accounting, Marketing, Human Resources, IT, Administrative staff) agree that they receive a response within 24 hours. But this begs the question, is 24 hours a reasonable time frame to expect a response from a co-worker? For this, I posed that very question in Multifamily ShareSpace on Facebook t......
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Operating Statistics: Impact of COVID-19 on Multifamily

From the very early stages of the coronavirus outbreak, it was clear the pandemic would have serious repercussions for the multifamily industry. Now, with emerging data to analyze, we are beginning to get some concrete sense of the outbreak’s impact. Data compiled by Radix shows that, in terms of property performance fundamentals, there are some predictable but nevertheless worrying trends.Nationally, traffic is way down on a Year-over-Year (YoY) basis. For the week ending on April 15, traffic was down 63.3% from the same time last year. On a more positive note, it was up 11.3% when compared with the preceding week. From discussions with our clients, this increase is likely due to the fact that operators are getting creative and doing virtual tours through applications like FaceTime and Google Voice.Additionally, leases signed are decreasing. The average U.S. apartment community signed 1.7 leases during the seven days ending on April 15. That represents a YoY decrease of 48.5%. Traffic and leases are leading indicators, and when they are down for sustained periods, we will soon see negative impacts on metrics like occupancy and leased percentage rates, and then followed by rents.We are seeing the first signs of this cascading effect. For example, the U.S. same-store occupancy rate for the week ending on April 15 was 93.55%, a 0.19%- drop from the preceding week and a 0.58% dip from the same period one year earlier. The same-store percent leased rate for the week of April 15 was 94.51%. The rate was a 0.35% d......
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Why Casting a Wide Data Net Isn't Always the Best Approach

Why Casting a Wide Data Net Isn't Always the Best Approach
When it comes to understanding your apartment community's performance, it certainly doesn't hurt to look at as much market data as possible. Monthly and quarterly market reports compiled by research and brokerage firms about your metro area are worth reviewing, but they also have limitations. By the time they arrive on your desk or in your inbox, the data is at least 30 days old. Sometimes the data contradict each other and its projections.Also, these surveys are usually conducted at the market level and then a regression analysis is performed to determine submarket data. This means the survey reports don't offer true insight into your surrounding submarket, let alone your property's comps. In the end, the information you really want to dig into and spend the most time with comes from your comps. To state it one way, it doesn’t matter if Manhattan rents were rising a month ago if your community is in Chelsea and rents there are flat today.  Getting Vital Data the Right WayThe problem facing a lot of operators is they don't have an efficient process for obtaining the kind of data that will benefit them the most.Too many property managers rely on the traditional market survey approach. Busy onsite associates spend hours calling comps to collect data about asking rents, occupancy rate, concessions, etc. When, and if they're finally able to collect this information, they enter it into Excel spreadsheets. And we all know this presents a whole host of problems and hampers meaningful data analysis. T......
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Rental Data Delays Are Not OK

Rental Data Delays Are Not OK
  "Life moves pretty fast." So said the wise philosopher Ferris Bueller in the 1986 classic movie.I can't help but think of that line sometimes when thinking about apartment rental rates. They move pretty fast, too. In fact, they're changing on an almost daily basis.To make the most effective decisions regarding pricing and concessions, apartment communities need access to real-time rental rate data, or something extremely close to it.The problem is, though, many operators are relying on data that – especially in the lightning-fast world we live in now – seems downright out of date.Delayed DataOperators rely on a number of data points when trying to determine how rates for their communities compare to the competition. These data points include everything from market rent, concessions (upfront and/or amortized) for each unit type, occupancy and leased percentage, traffic and leases, amenities, etc. To help ease the process of gathering all these data points, operators sometimes turn to market surveys compiled by third-party research organizations. These surveys are usually conducted at the market level and then a regression analysis is performed to determine submarket data. While this methodology seems to offer the most robust and logical look at how an entire market or metro is performing there are two key areas of concern: 1) the survey data is, in the best-case scenario, 30 days old and 2) the surveys don't provide true insight into the surrounding submarket, let alone at the property/comp level. It is a common practice for research firms to collect mar......
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Why Now is the Time to Stop Using Excel

Why Now is the Time to Stop Using Excel
  Everyone knows how important it is to capture asking rents from competing apartment communities. And conducting weekly market surveys is the most common practice to secure this vital business intelligence. When done right, market surveys can provide invaluable insight into whether a community's rental rates are too high, too low or competitive. A key part of the previous sentence is found in the word “right.” Today, the vast majority of operators aren't getting market surveys right. Too many companies use an inefficient process to compile market surveys and performance metrics. Overworked and under-prepared onsite associates conduct time-consuming phone calls to comparable properties. This process alone can take anywhere from three to four hours a day depending on the number of properties within a comp set. And let’s not forget the time needed for follow-up calls, because you know associates often aren't getting the info they need on the first call. Once the data is gathered through weekly calls to competing properties, associates input the data they collect into Excel spreadsheets. In fact, I would venture to guess that 99 percent of properties still rely on Excel as the repository of information gathered during market surveys. However, this use of Excel represents a significant hindrance to understanding a submarket and how a community is performing within that submarket, particularly how its pricing compares to its comps. Here are the top five reasons you need to stop using Excel to track market survey data: Excel becomes unwieldy. We all do it. We adjus......
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4 Ways To Use Maintenance Data During Multifamily Budget Season

  For multifamily managers, budget season typically is not the highlight of their annual calendar. Off-sites, bootcamps, late nights, endless spreadsheets, stacks of reports for filter through...ugh. A thorough, well-crafted budget often requires us to step outside of our comfort zone and deal with personnel issues and other things that personally impact people we work with/for. If this isn't challenging enough, the budget proposal is just the first step. It is most often followed by upper management/C-level/board review and in many cases, the dreaded word - CUTS. Wash, Rinse, Repeat until you get to something that works.  OK, enough of the monotony - so how can maintenance data help? Data collected within your maintenance operations can be a hidden gem when it comes to the overall condition or staffing of your property from a maintenance perspective. Here are four of our favorite areas to dig in:   1. Maintenance Categories/Tags   Most property management software tools do a very good job of enabling categorization of requests. Analyzing and sorting work-orders/service-requests by maintenance category (some systems refer to this as "tagging") can provide a treasure-trove of information during the budget process. Based on multifamily industry data, the average 300-unit property generates average of 150 resident service requests per month. Add another ~50 on top of that if your sites track make-ready activities or preventative maintenance. Over the course of a year, or even just 6-months, there is a lot of harvest-able information when budget-time rolls around. Export them into a spreadsheet ......
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The Importance of Data to Benchmarking Your Key Performance Metrics

The Importance of Data to Benchmarking Your Key Performance Metrics
Data is power.   When armed with the proper dataset, communities can surpass competitors that don’t possess the same ammunition. In fact, according to a recent RentPath analysis of internal data, apartment communities that use data increased their rents two to three times more than those that didn’t use data.    However, it has to be the right type of data. Nearly everyone can compare their own year-over-year figures, but that doesn’t always tell the entire story. A market upturn could lead to a pronounced increase or a market downturn to a decrease. Comparing your data to that of past years is limiting:  it won’t provide an indication of whether the competition in the neighborhood experienced a similar fate.   Benchmarking Data The most highly sought-after data is the type that reflects how well you’re doing against the competition. Without solid, tangible data on your specific comp set, you have no idea how you’re really performing.   Using just your year-over-year numbers, it’s possible for you to believe it was a spectacular year because you experienced a five-percent net gain. Meanwhile, the competition might have experienced gains averaging 12 percent. You’d be feeling pretty good about your efforts, not realizing you could have done even better and are actually falling behind the competitors.   On the flipside, a down year might not be as bad as first feared when comparing it to the competition, which might have experienced an even tougher time. Naturally, the quality and type of data matter when making these co......
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Reporting Calisthenics: How Less Is More

Reporting Calisthenics: How Less Is More
Caution: I’m going to ask you to challenge what you know and hold dear. I’m going to ask you to take a long hard look at yourself and those you work with and make a decision. I’m going to ask you… to throw out your reports. If you just had a heart attack reading that last line, then this post is for you. Let me give you an example of what I’m talking about: I like to lift weights. Anyone who lifts weights will tell you that by tracking your workouts, you will improve your performance. If I am measuring how much weight I lift over time, I’ll see an increase which will help me to continue. Additionally, if I am tracking how many calories and what I’m eating then I might even see an ab or two. The problem that I've noticed within our industry, is that we like to track everything. Imagine that I was tracking not only how much weight I lift but how many people came into the gym, how many machines I wiped down after use, how many songs I listened to on my headphones, the temperature in the gym, and the comparative cleanliness of the gym before and after my workout. If I’m tracking all that, how much time do I spend actually lifting weight? How much do I enjoy my workout? How likely am I to continue? It’s not to say that all reporting is counterproductive (this article does not apply to your financial reporting), but I would like to give a fe......
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Decisions and Data

Decisions and Data
Throughout the course of your career, no matter what industry you work in, you are likely to find yourself in a situation where you must make an important decision.  How will you make the decision?  Will you trust your gut?  Will you make your decision based off of how you "feel"?  We have all been in those discussions that border on arguments about decisions that need to be made where ultimately one or both parties will just start saying, "I really feel that we should ..."  It is sometimes hard to hitch my wagon to a decision that someone is making simply because they feel like it is the right decision.  As people we have a lot of experience in life and tend to make many decisions off of isolated feelings, experiences, or our gut.  While I don't want to downplay that sometimes trusting our gut is the right thing to do, it doesn't always work in the workplace because other stakeholders may not have that same gut feeling we do. Enter Data Driven Decision Making (DDDM).  This is the process of approaching difficult decisions in business from the standpoint of "what can I learn from the data to help me make a decision?"  In our technological times, essentially all industries are being managed online, in databases.  It has opened up the ability for stakeholders in companies to do a lot more to learn about their customers.  I am learning in my career that when I approach a difficult decision prepared with some data that helps prove......
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