Bay State Apartment Owner 1Q 2014
A YMCA training program creates marketable management skills; increasing membership in 2014; and the NAA announces speakers for the upcoming education conference.
FIRST QUARTER 2014 Training for Life Rigorous YMCA Program Fosters Front-Line Management Skills Caritas Communities Preventing Homelessness with Affordable Housing Everyone should have a home. Partner with Caritas Communities to prevent homelessness by creating quality housing that a low-income person can afford. Founder P. Leo Corcoran started with one triple-decker in Dorchester in 1985 in response to a dramatic increase in homelessness among low-income workers. Caritas now proudly owns and manages 29 well-maintained properties that 895 veterans, low-wage workers, elderly and disabled call home. CARITAS TODAY: j j j We will continue to develop properties into affordable housing as long as there are people who canâ€™t afford a home that is safe, clean and well-maintained. 895 units 29 buildings 14 Greater Boston communities We need your support. Please consider making a gift today. Contact Mark Winkeller, 781.843.1242, email@example.com. Because no one should be homeless. www.caritascommunities.org j 781.843.1242 COVER FIRST QUARTER 2014 Training for Life Rigorous YMCA Program Fosters Front-Line Management Skills CONTENTS 08 President’s Message RHA Calendar Increasing Membership a Primary Goal for 2014 04 05 06 Executive Director’s Message NAA Announces Speakers Rigorous YMCA Program Fosters Front-Line Management Skills Bay State Apartment Owner is the official publication of the Rental Housing Association. ©2014 The Warren Group Inc. and the Rental Housing Association. All rights reserved. The Warren Group is a trademark of The Warren Group Inc. No part of this publication may be reproduced in any manner without the express written consent of the publisher. A division of the Greater Boston Real Estate Board One Center Plaza, Mezzanine Level Boston, MA 02108 Phone: 617-423-8700 Fax: 617-338-2600 RHA Officers President: President Elect: Vice-President: Secretary: Executive Director: Joseph E. McPhee Jr. Gilbert Winn Sarah Mathewson Mark R. Epker John E. Lafferty Published By THE WARREN GROUP Creative / Production / Advertising www.thewarrengroup.com 280 Summer Street Boston, MA 02210 Phone: 617-428-5100 Fax: 617-428-5118 firstname.lastname@example.org Capitalizing on New Maintenance and Expense Regulations in Real Estate Photo Gallery 10 12 First Quarter 2014 • BAY STATE APARTMENT OWNER 3 President’s Message BY JOSEPH E. MCPHEE JR. Increasing Membership a Primary Goal for 2014 I t is with a sense of great excitement that I look forward to serving as president of the Rental Housing Association in 2014. The excitement is a reflection of the potential I see for the association as well as our industry in the coming year. One of my goals as president is to increase the number of RHA members. We begin the year with approximately 640 members, who control approximately 124,000 units in Massachusetts. Even a modest gain will have a significant and positive impact on the association. In order for this growth to be possible, however, we must first look to the underlying strength of the industry. The rental sector should be experiencing growth through the anticipated boomer market as they sell and move to independent living. The next generation is caught between the lack of good paying jobs and the inability to obtain a mortgage. Both of these factors should drive the market and the rents higher this year. The question remains as to how long this trend will last. According to Multihousing Professional, November 2013, one in five apartment dwellers and one in four individual property renters plan to stay where they are living for five years or more; only half of all renters said they anticipate becoming homeowners in the next five years; while less than one third Crime and Death Scene Cleaning Abatement and disposal of biological and infectious hazards 1-877-366-8348 1-US-REMOVE-IT 978-356-7007 4 BAY STATE APARTMENT OWNER • of renters cited inability to obtain a mortgage as the reason for not becoming homeowners in the near future. Forty three percent of apartment renters don’t want to own, while 39 percent say they enjoy renting. According to the National Apartment Association and NAA Education Institute’s publication The Art of the Apartment, the apartment industry is an economic engine that drove a $1.1 trillion dollar contribution to the national economy and supported 25.4 million jobs in 2011, despite the worst economy in a generation. According to U.S. Census date, 33 million Americans call apartments home. That results in 2.3 million jobs (direct and indirect) in the apartment sector, according to the NAA publication. As the economy strengthens, there will be more jobs in building, managing and leasing of apartment homes. That growth will create career opportunities and as employment expands so to do the possibilities to increase the membership of the Rental Housing Association. I have asked our Board of Directors to help identify potential members from industry and affiliated companies who are active in our market. Once the companies are known, we will identify and actively recruit the respective firms’ decisionmakers. I will work with our NextGen Committee in its outreach efforts promoting the benefits of membership to professionals who are new to the industry. And finally, we will strive to improve and build upon the member benefits of advocacy, education and networking to ensure we not only attract new prospects but also retain those industry leaders who are already experiencing the benefits of membership. n Joseph E. McPhee is director of operations for Boston Land Company and 2014 president of the Rental Housing Association. First Quarter 2014 g r e a t e r b o s t o n r e a l e s t a t e b o a r d RENTAL HOUSING ASSOCIATION 2014 EDUCATION AND EVENTS March 9 – 12 NAA Capitol Conference Omni Shoreham, Washington, D.C. 13-16 CAMT 14 Bruins Outing 21 Red Sox Outing 23 Breakfast Series April 10 Spring Marketing Program NextGen Night Out RHA Breakfast Series 5 NextGEN Kickoff Spring Golf 28 Fair Housing Location TBA Business Exchange for NAAPAC 11 Breakfast Series NextGEN Career Panel Fall Golf Maintenance Mania w e n h Reac 2014 N er tioN coNf AA e d u c A eNce & ex positioN 22 RHA Multi-Family Conference April 15Certified – 18 5, 12, 19, 26 Apartment Massachusetts Landlord Law 18-21 NAA Education Manager (CAM) Certificate for Maintenance Technicians Tenant (CAMT) Conference, Denver April 22CAM – 24, 2014, 13-15 NAA Assembly of Delegates, 2, 9, 16, 23 Boston 10Leasing Breakfast Series 10 BreakfastApartment Series National Professional (NALP) NextGen Holiday Party Affiliate Signature Event 15-18 Certificate for Maintenance Technicians (CAMT) Boston MayProfessional 13 (NALP) Business benefitting NAAPAC C L IExchange, CK HERE FO R MORE IN F O R M AT I O N Embassy Suites, Waltham May RHA Spring Marketing Event Location TBA May RHA NextGen Night Out Location TBA May RHA Golf Outing Location TBA May 21 RHA Red Sox Outing June 18 – 21 NAA Education Conference & Expo Denver, Colorado July 10 RHA Breakfast Series Location TBA July RHA Affiliate Signature Event Location TBA September 11 RHA Breakfast Series Location TBA 22-24 National Apartment Leasing RHA President's Awards s t H Heig come to deNver for the 2014 NAA education conference & exposition to reach new heights in your career and your business. each year, more value and innovation is added. continued recordbreaking attendance is a result of: • World-renowned General Session speakers who share unique insights—something you can’t experience at other events. • More than 375 suppliers who demonstrate innovative gadgets, goods and services on the market. • More than 40 breakout sessions led by topical and industry experts, where ideas are exchanged and solutions to everyday challenges are discovered. • Exciting networking events where you’ll connect with some of the 6,600 conference attendees. register today at www.naahq.org/14denver For more information visit www.gbreb/rha.com or via e-mail at email@example.com First Quarter 2014 • BAY STATE APARTMENT OWNER 5 Executive Director’s Message BY JOHN E. LAFFERTY NAA Announces Speakers I t is time to start planning your time at the National Apartment Association’s Education Conference in Denver, June 18 through 21. On Thursday, June 19, at 9 a.m., Terry Jones, founder of Travelocity.com, gives you the keys to unlock the mystery of how to connect with customers online. While face-to-face contact is not going away, businesses that lack an effective online relationship strategy will be left behind. Using real world examples, Jones will educate you in all phases of digital conversation, from search to social media. Runs in: Fall/Spring Following Terry at 10:45 a.m., and repeated again on Friday, Seth Mattison offers you his practical insights on multiple generations competing in the workplace. You will develop a working knowledge of who the generations are, diagnose generational gaps that lead to conflict, overcome roadblocks, and find a variety of solutions to more effectively communicate and collaborate to increase innovation and productivity. Susan Packard, co-founder and former chief operating officer of HGTV starts the day at 8 a.m. Friday by sharing leadership lessons from businesses she has helped to build and the work she is doing today. What do leaders need to excel? Vision, audacity and focus are just some of the key factors she will discuss. You will also hear BayState Apartment Owner Salsbury Industries some unusual insights and stories about diversity as a business practice. Following Susan, on Friday afternoon at 2:15 p.m., will be Bill Rancic, host of “America Now” and co-executive producer of “Giuliana and Bill.” Rancic’s topic, “How to Think Long-Term in a Short-Term world,” reveals the strategies that make him a successful entrepreneur. He shares the lessons learned from the ups and downs on his road to success, in a motivational speech packed with advice that you can apply to your life immediately. The co-hosts of ABC’s “Shark Tank” want to know if you have what it takes to swim with the sharks. Following their keynote speeches, Barbara Corcoran and Daymond John will critique pitches made by several conference attendees and award a $5,000 price to a lucky entrepreneur. Corcoran, who took a $1,000 loan and parlayed it into a successful business she sold for $66 million, reveals easy-tofollow tips on branding, the single most important key to success. John, as founder, president and chief executive officer of FUBU, is regarded as one of the most soughtafter branding experts and keynote speakers in fashion and business today. And this is just part of the conference. The education sessions, industry leading exposition and opening party will round out your trip to Denver with unsurpassed professional training, exposure to cuttingedge goods and services provided by NAA’s supplier members, and the best industry networking event ever. For more information and to register for the 2014 NAA Education Conference and Exposition, visit www.naahq.org. n John Lafferty is the executive director of the Rental Housing Association. 6 BAY STATE APARTMENT OWNER • First Quarter 2014 G R E A T E R B O S T O N R E A L E S T A T E B O A R D BOSTON PUBLIC LIBRARY MAY 8, 2014 | 6:00 PM - 10:00 PM Rigorous YMCA Program Fosters Front-Line Management Skills Training for Life By Christina P. O’Neill hen Peabody Properties hired Carolyn Parker, they not only found a great administrative support staff, they found a great source for new talent. For the past six months, Parker has been an administrative assistant for Peabody Properties Inc., one of the area’s largest owners and managers of multifamily property, with 450 employees across the state. Her current work site is the recently completed Charlesview Residences, a Brighton complex with 240 apartments in 19 townhouses and three mid-rise buildings. PPI offered Parker a position a week and a half into what had been planned to be an eight-week internship. A participant of the YMCA of Greater Boston’s Training Inc., an administrative support training program, Parker’s participation in the program, her interest in the job, and her willingness to learn new materials and skills, stood her well with PPI. Parker’s training included a 12-week administration support course, followed by the internship. YMCA Training, Inc. has provided professional skills training and employment assistance to laid-off, unemployed, and under-employed adults throughout greater Boston for over 30 years. Each year, more than 120 people attend the 20-week full-time training program, gaining administrative support and computer skills. In addition to real estate and property management, participants prepare for jobs in medical offices, banking, insurance, colleges and government. 8 BAY STATE APARTMENT OWNER • W YMCA Training Inc. works with about 50 employer partners and business managers across many industries, who guide the curriculum from the beginning. “There’s so much talk in the state and in the country about jobs and degree requirements,” said Anne Meyerson, executive director of the YMCA’s Education and Training branch. “There are exciting industries that do not require a college degree.” Those jobs can be found in housing, commercial real estate, and banking – jobs that require a level of technical savvy and management skills, both administrative and on the people side. “We’re not training for jobs that don’t exist; we’re not training for jobs that might exist; we’re training for now,” she said. “We ask about staff, industry trends, and redesign the curriculum [to meet the need].” The program at the YMCA of Greater Boston is tuition-free to the candidates. It is financed half by donations and half by public funds. Its long-term success rate is impressive. A total of 4,500 graduates earned an aggregate $95.5 million, and paid $3.5 million in taxes in 2013. Parker cited the high standards at Training Inc., among them, a strict attendance policy. “I learned that early is on time, and on time is late,” she said. The program also helped improve her communication skills, accuracy and organization, and gave her the knowledge and tools to complete tasks in a timely and accurate First Quarter 2014 manner. “At the rental office, I must be accurate about the information I am giving or pursuing,” she said. “We have a waiting list that needs to be abided by correctly and lawfully,” and tenants who need a front-line person with whom to communicate. A Careful Vetting Candidates for the training program are chosen carefully, Meyerson said. “We have extremely high expectations of all participants, because when people leave us, they’re going to succeed,” she said. “We know people who come to us want to be strong candidates,” she noted. Like many of the participants at Training Inc., Parker came to the program with skills and prior experience. Her work history includes serving as a residential counselor at Baycove Human Services providing direct care to four individuals with disabilities. Her life experience has given her an appreciation for how important it is for people to have a housing situation that affirms their economic integrity and their independence. PPI’s diverse portfolio of properties requires a diverse, highly skilled, creative and flexible workforce with the ability to meet the challenges and opportunities of property management. When Parker first arrived at PPI, the property manager at the site felt that she was more than qualified, said Diane Wholey, PPI’s vice president of human resources. PPI also offers an in-house training program called Peabody University. It provides administrative assistants a career ladder that leads to assistant property manager and then property manager, multi-site manager and on to senior manager. “With years of necessary experience and education, this could lead to a regional property manager role. There is so much opportunity here,” Wholey said. Parker will have the opportunity to evaluate many facets of property management at PPI. Their properties include senior housing, mixed-income housing, active adult communities, condominiums and veterans’ housing. “With interns, there’s the opportunity to see a little bit of everything [that leads to career choices],” Wholey said. As for Parker, when asked what she would say to candidates considering a job in property management, “I would tell them go for it! Every day is something different. There are resident files, wait lists, application requests, application information seekers, walk-ins, etc., as well as assuring you are providing the tenants and the public with equal-opportunity housing. Have patience next to God. Be a problem-solver and have a really good memory.” n Legal Clarification Capitalizing on New Maintenance and Expense Regulations in Real Estate How To Get Significant Tax Savings By Eric R. Allon and Allen D. Hankins I n September of last year, the Treasury Department released final regulations that clarify which business expenses may be deducted in a single year, such as maintenance and repair costs, and which expenses must be capitalized over numerous years, such as improvements. These new regulations went into effect Jan. 1, and they present several tax-advantaged opportunities in the real estate context. Perhaps one of the biggest opportunities to decrease taxable income under the new regulations is contained within the building routine maintenance safe harbor provision. Under this safe harbor, a taxpayer may deduct expenses paid for routine activities that the taxpayer expects to perform to keep a building and its structural components (including building systems, BAY STATE APARTMENT OWNER • such as HVAC, plumbing, electrical and elevators) in their ordinarily efficient operating condition. Activities are considered “routine” if, at the time the building is placed in service, the taxpayer reasonably expects to perform such maintenance more than once over a 10year period. This safe harbor can translate to significant, immediate tax savings. The regulations provide various examples applying the safe harbor, including one relating to an HVAC system. If a landlord owns an office building, the HVAC is considered a building “system.” If the system requires maintenance by an outside contractor every four years, including disassembly, cleaning, inspection, repair and replacement of the system and its component parts, the expenses in connection with 10 First Quarter 2014 that maintenance may be deducted under the routine maintenance safe harbor. If an inspection discloses a problem with a component costing $2,000, and the component is repaired or replaced with a comparable replacement part, the full $2,000 may be deducted in a single year instead of depreciating it over several years. Maximizing Tax Savings In order to maximize potential tax savings under this safe harbor, taxpayers should identify the cost of maintenance activities that past experience would allow them to reasonably expect to perform more than once in 10 years. The IRS has already clarified that it is not problematic if the taxpayer does not actually perform the maintenance more than once in 10 years, so long as there was a reasonable expectation at the time the building was placed into service by the taxpayer that such maintenance would be so performed. A second opportunity for a landlord to decrease taxable income is under the new de minimis safe harbor regarding the acquisition of real or personal property. Taxpayers with an applicable financial statement (AFS), such as a certified audited statement prepared by an independent CPA, may be able to deduct up to $5,000 for the cost of acquired property per invoice, or per item if substantiated by an invoice. For taxpayers without an AFS, the limit drops to $500. For instance, if a landlord of a multifamily property buys 300 refrigerators, each for $400, he could potentially deduct the entire $120,000 cost (even if the landlord does not have an AFS since the per-item cost falls below the $500 threshold). The safe harbor also requires that the taxpayer have a corresponding written capitalization policy in effect at the beginning of the tax year and that the taxpayer annually elect that the safe harbor apply. As with any tax rules, the new regulations are complex and have various requirements applicable to specific situations, including issues related to improvements versus repairs, whether demolition and removal costs are capitalized and whether a party even qualifies for various safe harbors. To navigate these new rules, interested parties should seek the advice of their counsel and accountants as soon as possible to ensure compliance with the new rules and the most favorable tax result. n Eric R. Allon and Allen D. Hankins practice commercial real estate and general business law at Bernkopf Goodman LLP. MassHousing is pleased to provide $8.9 million for Central Annex Apartments in Pittsfield. Congratulations to project sponsor POAH for their efforts to provide long-term affordable housing for elderly and disabled residents. www.masshousingrental.com First Quarter 2014 â€˘ BAY STATE APARTMENT OWNER 11 12 BAY STATE APARTMENT OWNER • First Quarter 2014 DECEMBER 12, 2013 | RENAISSANCE BOSTON WATERFRONT, 606 CONGRESS STREET, BOSTON HONORING IRMA SCHRETTER, AARON GORNSTEIN, S-C MANAGEMENT CORP., 2013 INDUSTRY EXCELLENCE AWARD UNDERSECRETARY FOR HOUSING & COMMUNITY DEVELOPMENT 2013 EXCELLENCE IN PUBLIC SERVICE AWARD First Quarter 2014 • BAY STATE APARTMENT OWNER 13 BUILDING PERMITS | PROVIDED BY THE WARREN GROUP BUILDING PERMITS | PROVIDED BY THE WARREN GROUP BUILDING PERMIT DATABASE GAIN A CLEAR PICTURE OF THE HOUSING AND CONSTRUCTION MARKET Be the first to know where construction is beginning and expanding, which contractors are closing the deals, and who is making property improvements – all with The Warren Group’s Building Permit Data. Our building permit database covers all of Massachusetts, Connecticut and Rhode Island, with data from Southern New Hampshire and Southern Maine expected to be released later this year. BENEFITS: • Gain valuable insight with details including contractor information, estimated value of construction work and the type of work being performed. • Make informed decisions based on recent building activity. • Receive data conveniently: via a weekly email with the latest building permits in Excel format. • Use this vital data to conduct research and augment data files. Learn more about how our new building permit database can help your business by calling 617-896-5392 or emailing firstname.lastname@example.org. 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(617) 896-5392 | email@example.com 617.428.5100 617.428.5118 www.thewarrengroup.com First Quarter 2014 • BAY STATE APARTMENT OWNER 15 MORE THAN 40 BREAKOUT SESSIONS IN THESE KEY LEARNING AREAS: • • • Marketing & Leasing, Technology Operations & Management, HR Leadership • • • Professional Development Specialty—Student, IRO, Senior, Legal, Green, Military, Affordable Housing Thought Leaders Sessions sponsored by: COME HEAR THESE INSPIRING THOUGHT LEADER SPEAKERS Terry Jones, Founder of Travelocity.com Building Digital Relationships Thursday, June 19, 9 a.m.–10:30 a.m. Pioneer Jones unlocks the mystery of how to connect with customers online and educates attendees in all phases of the digital conversation. Susan Packard, Co-Founder and Former Chief Operating Officer of HGTV The Leader Within: Growing Your Leadership Team Friday, June 20, 8 a.m.–9:30 a.m. Packard shares leadership lessons from businesses she has helped to build and discusses how vision, audacity and relentless focus are some of the key factors that make great leaders. Sponsored by: Seth Mattison, Founder and Chief Movement Officer of FutureSight Labs When Generations Connect Thursday, June 19, 10:45 a.m.–Noon Friday, June 20, 4 p.m.–5:30 p.m. (encore presentation) Get insights on how generational differences effect your workplace and what you should do about it. Sponsored by: Bill Rancic, Host of “America Now” and Co-Executive Producer of “Giuliana and Bill” How to Think Long Term in a Short-Term World Friday, June 20, 2:15 p.m.–3:45 p.m. Rancic will share the ups and downs on his road to success and give you a glimpse at lessons he has learned throughout his many business experiences. 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