Trends A P A R T M E N T
OFFICIAL PUBLICATION • JULY 2013
AAMD MILESTONES 2012-2013 Year in Review p.14
2013-2014 AAMD PRESIDENT
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JULY 2013 | Volume 26, Number 7
Mark Williams firstname.lastname@example.org
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COMMUNICATION COMMITTEE Renae Jones, AMLI Residential Jessica Graham, ARA
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Please contact Christopher Dean or Julie EvansSchmitt at 303.329.3300 for more information about advertising in Trends. Deadline for contracts and artwork are the first Monday of the month prior to publication.
Trends will consider printing any article written by an AAMD member that applies to the Denver multifamily industry, is 300-500 words, does not promote any single company or product. AAMD reserves the right to edit any article without notification. Due to space, not all articles submitted will be printed.
Apartment Trends (USPS 018-233) is published 11 times a year (monthly except for the combined November/December issue) by The Apartment Association of Metro Denver, 7100 E. Belleview Ave., Suite 305, Greenwood Village, CO 80111. Periodicals Postage Paid at Denver, CO. POSTMASTER: Send address changes to Apartment Trends c/o The Apartment Association of Metro Denver, 7100 E. Belleview Ave., Suite 305, Greenwood Village, CO 80111. Subscription included in membership dues. Apartment Trends is published as a service to its members and all segments of the apartment industry by The Apartment Association of Metro Denver. Any reproduction or copying in whole or in part, without permission, is prohibited. Articles and events herein do not necessarily have the endorsement of AAMD but may be presented to give readers a diversity of views and activity updates. 7100 E. Belleview Ave., Suite 305, Greenwood Village, CO 80111, Phone (303) 329-3300, Fax (303) 329-0403, E-mail: email@example.com, Web: www.aamdhq.org. AAMD is a tax-exempt professional trade association representing the multifamily housing industry in the metropolitan Denver area. AAMD is affiliated with The Colorado Apartment Association (www.caahq.org) and The National Apartment Association (www.naahq.org).
2 | TRENDS • JULY 2013
FROM THE PRESIDENT
Why I Chose to Go for Another Round as President of AAMD
12 14 18 23 25 27
GETTING TO KNOW DON WERNER
2013-2014 AAMD President
PHOTO ALBUM 2013 June Awards
7 Ways to Promote Fun at Work
Successful Strategies for Superior Customer Service
ASK THE LAWYER
Responding to Negative Online Reviews and Defamation
Don’t Make Them Wait: A Secret to More Leases and Happier Residents IRS Code 453: 1031 Alternative and Negotiation Tool
4 Leadership 7 Economic Conference 9 Miss Management 10 In Memorium
11 30 32 32
Eye on the Industry AIMS Update New Members Advertising Directory
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Don Werner Metrex Property Group President
Susan Maxwell Zocalo Development Secretary
Mary Wessler, CAPS ConAm Colorado President - Elect
Mike Papatonakis Nina Investments Vice President
Vickie Breaux-Michaud Rocky Sundling, CAPS Career Strategies Greystar Real Estate Supplier At Large Past President
DJ Longo Terra Firma Investment Treasurer
Mark Williams AAMD Executive Vice President
2013-2014 board of directors
President: Don Werner, Metrex Property Group President - Elect: Mary Wessler, CAPS, ConAm Colorado Vice President: Mike Papantonakis, Nina Investments Treasurer: DJ Longo, Terra Firma Investment Group Secretary: Susan Maxwell, Zocalo Development Supplier At Large: Vickie Breaux-Michaud, Career Strategies Past President: Rocky Sundling, CAPS, Greystar Real Estate Executive Vice President: Mark Williams, AAMD Owner Director: Derek Avery, Legacy Partners Owner Director: Scott Kirkwood,Greystar Real Estate Owner Director: Peggy Panzer, Orion Real Estate Supplier Director: Cary Bruteig, Apartment Appraisers Supplier Director: Lyn Jacobs, Arbor Carpet Supplier Director: Mark Tschetter, Tschetter Hamrick Sulzer JLAC Chair: Rocky Sundling, Greystar Real Estate Partners JLAC Chair-Elect: Mike Gosline, Metrex Property Group Education Chair: Sandi Kelly, Simpson Property Group Education Chair-Elect: Alicia Parfrey Minjarez, Greystar Real Estate Networking Chair: Stacey Baldwin, CAPS, Hans Nielsen Networking Chair-Elect: Jennifer Watkins, Alliance Residential Suppliers Council Chair: Vickie Breaux-Michaud, Career Strategies Suppliers Council Chair-Elect: Kirstie Morello, National Corporate Housing IROC Chair: Debbi King, IPM Colorado IROC Chair-Elect: Teo Nicolais, Nicolais, LLC CAA President: Terry Simone, Unique Property Group
2013-2014 COMMITTEE CHAIRS Alliance Chair: Alliance Vice: Ambassadors Chair: Ambassadors Vice: Chili Cookoff Chair: Chili Cookoff Vice: Chili Cookoff Host: Communications Chair: Communications Vice: Charity Auction Chair: Charity Auction Vice: Economic Conference Chair: Economic Conference Vice: Finance Committee Chair: Finance Committee Vice: Golf Tournament Chair: Golf Tournament Vice: June Awards Chair: June Awards Vice: Maintenance Olympics Chair: Maintenance Olympics Vice: Maintenance Olympics Vice: Membership Chair: Membership Vice: Membership Vice: Public Relations Co-Chair: Public Relations Co-Chair: Spring Clean Chair: Spring Clean Vice: Spring Clean Vice: Trade Show Chair: Trade Show Vice: Trade Show Vice: 4 | TRENDS â€˘ JULY 2013
Mike Zoellner, RedPeak Properties Terry Simone, Unique Properties Judy Houchins, Legacy Partners Patrick Quinlan, Standard Interiors Chip Kabrud, Mac-Gray Natalie Wilson, Riverstone Residential Amie Harmon, RediCarpet Renae Jones, AMLI Residential Jessica Graham, ARA Scott Kirkwood, Greystar Real Estate Partners Lisa Sutton, Behringer Harvard Derek Avery, Legacy Partners Drew Hamrick, Tschetter Hamrick Sulzer DJ Longo, Terra Firma Investment Group Mary Wessler, ConAm Colorado Steve Christensen, Arbor Carpet Tony Hunt, Apartment Mgmt. Consultants Rocky Sundling, Greystar Real Estate Partners Kay Neal, Metrex Property Group Ed Schell, HD Supply Jason Allen, Carmel Partners Todd Bowen, Mission Rock Residential Christy White, Fairfield Residential Ryan Floyd, Unique Apartment Group Andrew Gibbs, Peliton Heather Campbell, Mill Creek Residential Debbie Wilson, Springman, Braden, Wilson & Pontius Terry Shadwick, BluSky Restoration Christine Hatter, Echelon Property Group Jay Neal, Metrex Property Group Allison Moledo, RedPeak Properties Megan Dyk, BluSky Restoration Tiffany Stanley, Camden Property Trust www.aamdhq.org
FROM THE PRESIDENT don werner | metrex property group
Why I chose to go for another round as president of AAMD
en years ago, I was president of the Apartment Association of Metro Denver. And now, here I am again. People have asked me why, and I tell them that when I was having drinks with Mark Williams and a few board members a while back, I was asked if I’d go another round. I thought they meant another round of drinks, so of course I said yes. I didn’t realize that they were, in fact, asking if I’d be president again. In the last ten years, the Denver apartment industry has become bigger and better. Thousands of units have been developed since 2003, vacancies are down and rents are up. While the Association is much bigger because of it, the core values of AAMD – legislation, education and networking – are still central to the organization, and the Association has developed some big picture strategies based on each one that I’m excited to expand upon during my presidency. First, because the industry has gotten bigger and our businesses have become healthier, we’ve seen more and more negative legislation try to weaken us. One of my primary goals this year is to further encourage every member of AAMD to step up with their time and energy to help spread the good word, with heir corporate and personal financial contributions. No matter our political affiliations - We must work together to protect this industry because we depend on it for our jobs and businesses. The past ten years have proven successful for AAMD in developing training programs for those who professionally manage our properties. Not only in expanding the office and education center, but also in sending legal handbooks to every apartment owner with more than 25 units, as well as each community with more than 100 units - and offering free legal handbook seminars - a valuable resource that will only help the industry as a whole. This year, I hope to see more AAMD members using these valuable re-sources.
6 | TRENDS • JULY 2013
Finally, with an increased focus on networking, I hope to see AAMD continue to expand their current events like the Trade Show and Maintenance Olympics, and their smaller casual functions and roundtables for members to grow closer together personally and professionally. As many of you know, I’m all about business. A lot of initiatives we started during my presidency in 2003-2004 have expanded and really set up a good future for the organizations and the industry. It is my goal to ensure that all the hard work from our prior volunteers from our committees and councils continue to move forward while bringing new ideas and processes into play. Why I’m back as AAMD President has to do much more with where we are as an industry than those early evening cocktails several years ago. It’s an exciting time to be involved again and I’m happy to use my knowledge and experience as a leader in this Association.
2013-2014 AAMD President
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Pets or no pets, service animals are allowed
am a leasing specialist at an apartment community that does not allow pets. Recently a potential resident indicated interest in one of our apartments but has a big dog. I told her that we don’t allow pets of any kind. She said that it is her service animal to which I responded that she would probably be happier at our property that does allow pets. I was trying to help her but she left disappointed and unsatisfied. Do you have any suggestions for me? I definitely have a suggestion. Let’s start with this: a service animal is not a pet and therefore, not subject to any “no pet” policies you have in place at your community. Allowing a person with a “service animal” should be considered as a “reasonable accommodation” under federal fair housing laws. However, instead of considering a reasonable accommodation you “steered” this prospect away from your apartment community which is another violation of fair housing. So now my suggestion, please attend a fair housing class sooner rather than later.
I’m a regional property manager and we’re experiencing a lot of turnover. This is not that unusual except that it seems to be accompanied by an inordinate number of disgruntled residents complaining about the fairness of the move-out inspection and resulting loss of deposit. Do you have any ideas to manage this situation more effectively? The process begins at move-in. Was a move-in inspection done completely and signed by all the parties? Were there digital images take to document these conditions at move-in? Upon receipt of intent to vacate was a pre-move out inspection appointment set up? This is done to remind the resident of the documented condition of their home at move-in and therefore establishing realistic expectations about costs upon move-out. If these steps are followed each and every time it will minimize situations you reference. I recognize the difficulties of consistency in accomplishing these routines however such are the essence of “best practices” in property management.
JULY 2013 • TRENDS | 9
van Lichtenfels, a well-respected real estate development professional at RedPeak Properties, unexpectedly passed away in May of 2013. Evan was 35 years old when a pulmonary embolism, as result of Achilles tendon surgery, took his life.
Evan is a Colorado native who attended Graland Country Day School then East High School, before pursuing a bachelor’s degree in Business from Boston College. In addition to his success in business Evan was an avid fly fisherman and all around sportsman. He was also a devoted and loyal supporter of Notre Dame, Denver Broncos and all Colorado sports teams. Evan loved Southern Rock, the Grateful Dead but most of all, his wife Heather and their three children; Owen (6 years), Maggie, (5 years), and Will (9 months). Evan made a lasting impression on all who knew him. In business, he was a sincere, thoughtful and confident leader. He most recently worked as RedPeak’s Development Director where he was involved in all aspects of our development pipeline. At One City Block, RedPeak’s newest development, he exceeded expectations by always looking for ways to be cost effective, creative, and develop smarter, more innovative and efficient buildings for RedPeak. Evan’s tremendous effort on this project earned
10 | TRENDS • JULY 2013
praise from City Councilman Albus Brooks and members of the neighborhood association. Evan also developed the sustainability committee at Red Peak, in which he served as its Chairman. His passion for sustainability was very influential and numerous initiatives were implemented as a result of his effort and dedication to this goal. Evan’s impact at Red Peak was also felt on a deeply personal level. Evan was bright, creative, and fun to be around. “It’s rare to find the kind of working dynamic that we shared, it can’t be forced. With Evan it was natural and easy, like an old friend you’ve known for years. I am forever blessed to have had the time we spent together” said Bobby Hutchinson, co-worker and close friend to Evan. When the RedPeak team learned of his death, we had a day of remembrance for Evan. “We ordered 20 green chile cheeseburgers from Cooks Market, listened to the Almond Brothers, two things Evan loved, and shared memories of our time with Evan. The news of Evan’s death was shocking so we felt spending time together as a team to remember him just felt right,” said Allison Moledo, Director of Training and Recruiting. Evan was a devoted husband, father, professional, friend, colleague; he was a good man. Evan will be missed dearly by all who knew him but we are so thankful for the time we had with him.
EYE ON THE INDUSTRY
LYNETT BROCKMAN | CAREER OPTIONS
Forum Real Estate expands to accommodate Denver market growth
orum Real Estate is shifting into even higher gear, according to Vice President and Managing Director of Operations, Melanie French. Forum is in a very concentrated growth mode and she is excited to lead the operations team. The group is based in Denver but has interests throughout the country, and has added some key team members. Kate Grasso has joined Forum as Director of Marketing. As many of us know, Kate has an extensive experience in leading the marketing, advertising and training efforts on a large scale . Kate is excited to put this knowledge to work for Forum’s growing portfolio. Kenny Block has joined the Forum team as Regional Service Manager. Among Kenny’s responsibilities nationally will be leadership of service team/ maintenance operations, capital improvements and the training support focusing in these areas. Kenny has been successful in this role before, also on a very large scale. Last, but not least, Sabrina Draplin has joined the Forum team as Regional Manager and will focus on assets in the Midwest.
Mover & Shaker Sandy Juvera has joined Wood Partners Residential as Senior Portfolio Manager. Congratulations to Sandy and to the Wood Partners team for their growth in the metro Denver market! www.aamdhq.org
2020 Lawrence Grand Opening Congratulations to Zocalo Development for their amazing grand opening of 2020 Lawrence! Known for setting the tone in the downtown Denver high-rise market, the team is also known for hosting wonderful events to share their product and vision with the world. The event included a street party featuring local vendors. (From left: Sean McGowan, Juve Ramirez, Patrick Macalik, Susan Maxwell, Christina Vigorito, Jordan Langfeldt, Madelyn Nicolay, Kelsey Young)
Holland Residential’s Growth Holland Residential’s grand opening of Line 28 in LoHi was fabulous for many reasons – The food, the fun, the high occupancy and outstanding rent per square foot… Need I say more?? Line 28 is one of the first communities to open in the hot new LoHi market. Also, congratulations to Holland VP and Partner, Tracy Dodson and her team on their groundbreaking at Union Station for 1650 Wewatta. It was the second groundbreaking of the day following the Belleview Station groundbreaking at 1-25 and Belleview. (From left: Erik Hagevik, Ryan Sims, Amy Black, Lynn McCarty, Tracey Dodson, Clyde Holland, Bob Coppess, Lydia Thompson).
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www.aamdhq.org/onlinelearning JULY 2013 • TRENDS | 11
of on the cover st la s a w er n sue Don Wer 3. See the is 0 0 2 e n Ju in rends ds Apartment T q.org/dontren h d m a .a w w online at w
Photo by Victor Sanchez, Studio Victor Sanchez 12 | TRENDS â€˘ JULY 2013
DON WERNER (Again!)
Getting to Know
2013-2014 AAMD PRESIDENT
Born & Raised:
Born 1955 in Dallas, TX and moved to Kansas City in 1966
1974 Graduate from Shawnee Mission South High school in Overland Park KS, BS in Agricultural Mechanization from KSU, 1978
Favorite Food / Drink / Restaurant:
Great Italian food, veal piccata, chicken piccata, Venice at Holly and Orchard, sit at the bar and let Rodney select the wines.
I love work and as a result, have a hard time separating “work” from fun. I like repositioning properties so home improvement at our home or an apartment, it is all the same and I love it.
Current hits and Adult Alternative
Favorite TV Show:
Two and a Half Men, Revenge, In the Middle.
How Would You Describe Your Management Style?
I tend to be pretty hands off, however I do have strong expectations of people and hold them accountable for performance. I like flat structures where individuals can function freely. Because I operate flat and hands off, staff is empowered to make decisions for themselves, I provide support and direction, but ultimately I expect staff to be intelligent, think for themselves and have good reasons if the decision they make proves to be incorrect.
What is Your Primary Goal as AAMD President?
To ensure that all the hard work from our prior volunteers from our committees and councils continue to move forward while bringing new ideas and processes into play.
What is the most fun you’ve had in your professional life? Doing what I am today. Again, this is fun - not work - to me. www.aamdhq.org
JULY 2013 • TRENDS | 13
apartmen of metro td association enver presen ts
DS E AWAR 2013 JdUinN ner stallation din an
Scott & Linda Kirkwood
14 | TRENDS â€˘ JULY 2013
The 2012-2013 Committee Chairs accept their “Leaders that Rock” awards
The 2012-2013 Board of Directors accept their “Leaders that Rock” awards
John Hagan & Amie Ha
FLAGS BY SUSAN JULY 2013 • TRENDS | 15
Terrance Hunt (second from left) is awarded the Jack Luscombe “Pay It Forward” Award
John Hagan and Amie Harmon accept the Pyramid Award for RediCarpet
Terry Shadwick and Christine Hatter accept the co-Persons of the Month for May
Paul Farrer, Debbie Wilson and Britten Hale accept the Pyramid Award for Springman, Braden, Wilson & Pontius, P.C. Megan Dyk (second from left) is awarded the Paul Noveshansky Diplomat Award
Lyn Jacobs accepts Arbor Carpet’s Innovation Award
2012-2013 AAMD Executive Committee poses for one final picture.
Parke Pettegrew congratulates Rocky Sundling
Drew Hamrick (center) is awarded 2012-2013 Supplier Person of the Year
Lauren Brockman (left) swears in the 2013-2014 Board of Directors
16 | TRENDS • JULY 2013
Will & Foy Bailey accept Community Interiors’ Pyramid Award
DJ Longo (center) is awarded 2012-2013 Owner Person of the Year
Don Werner is sworn in as President
The team from RediCarpet
The team from Interstate Restoration
Josh Wallace, Joe Berg & Scott Kirkwood
The team from Career Strategies
The team from Greystar Real Estate
Drew Hamrick, Katie Burney, Megan Dyk & Jason Luce
Dan Flanagan, Ron Goetz and Terry Shadwick
Mario Nicolais, Drew Hamrick & Teo Nicolais
The team from Metrex Property Group
Patrick Quinlan & Amy Hord
Susan Maxwell, Peggy Panzer, Garrett Faillaci and Lynett Brockman
Summer Signer, Ryan Shrout, Liz McKenney, Chip Kabrud, Jessica Jacobsen, Christine Hatter
Rhonda Hunter, Eve Hubert, Ian Andrews, April Gurule & Karen Gladney
Lillian Mumford, Jon Butters and Alicia Parfrey-Minjarez
Courtney Bowlin, Maureen Quarles, William and Susan Lind
JULY 2013 â€˘ TRENDS | 17
Ways to Promote Fun at Work
Make Time to Encourage Laughter, Celebration and Competition BY JOEL ZEFF
National workplace expert
he crowd of 400 waited patiently for the ballroom doors to open. The trumpets of the William Tell Overture signaled the start to find the perfect seat. As trumpets blared, 400 smiling employees of a large insurance company stampeded to their chairs. In less than 2 minutes, they were seated and ready for hotel chicken, steak or stuffed red pepper. The room buzzed. Employees and executives mingled, smiled and enjoyed each other’s company. They had no idea what would come next would be awesome. One of their leaders, a vice president and actuary, walked on stage wearing a very tight pseudo Lone Ranger outfit. He called it “robin’s eggshell blue”. He had a mask. He had lots of fringe. The crowd ate it up. As he gave out awards and recognized various individuals, he punctuated everything by drawing his toy gun. He had perfect timing and the crowd loved it. For a little more than 2 hours and the price of a hotel chicken lunch, employees celebrated, 18 | TRENDS • JULY 2013
received applause and recognition for a great year, relaxed and had fun. And when lunch finished, the employees returned to work, most with a bounce in their step. It is a simple formula. Break from work + free lunch + actuary dressed as the Lone Ranger + recognition = fun. Why can’t more companies figure this out? Fun wins again. Fun should always win. Now, more than ever, we need to instigate, encourage and demand fun. Sometimes, we even have to fight for it. We are all working harder and longer. Take your pick of recent frustrations: the economy, a recent merger or layoff, global events, reduced benefits, or any daily corporate change. Fun is our secret weapon. Fun will always win against the stress, frustration and impatience of change and uncertainty. Fun will increase passion, productivity and loyalty. Fun energizes our passion for the day to day work. It is our fuel and for many companies it is in short supply. Fun is also simple. It really doesn’t take much time, budget or energy. It just takes willingness. Here are seven ideas for managers to promote, encourage and instigate fun:
1. Surprise and silliness
The Lone Ranger Vice President is the perfect example. I have seen executives dress up as a Roman emperor, cowboy, Greek Olympian, super hero, and everything else. It always works. Work is serious. Business is serious. It is okay to lighten up a little with a touch of silliness. Here is another example: One of my best friends works at a telecommunications company. They had a large chess piece (about four feet high) in their office. It would appear in someone’s office one day and reappear the next day somewhere else. Sometimes they would take the chess piece to meetings with them. It was silly. Sometimes it was given as an award. If you were having a rough day, it was guaranteed the chess piece would show up in your office. The recipient would always smile. My friend, who is in the Army, was called up and sent to Kuwait in support of the war effort. One day, his colleagues mailed him the chess piece. My friend carried around this four foot chess piece around the base and took pictures: in the mess hall, on a tank, in the latrine. Everyone on base laughed at my friend’s chess piece during the impromptu photo www.aamdhq.org
session. They offered photo ideas. He sent the photos back to his friends. His friends at work loved the photos. One 4-foot chess piece created fun on two continents, one war zone and one large corporation. What is your 4-foot chess piece? Fun sometimes comes from unlikely places. The common ingredient is always a little silliness, mixed with a little surprise and some imagination.
2. Recognition and celebration
A little positive support and recognition is a huge ingredient to fun. Be creative and different. Telling someone “thank you” or “I appreciate you” is the greatest gift you can ever give. And it doesn’t take any money, planning, budget or a PowerPoint presentation with an upside down triangle. • Create a “thank you” bulletin board in the break room. • Give out a funny trophy each week. • Take someone out to lunch. • When I host award programs, I always suggest the client create a slide show to play during dinner with photos and work/ personal achievements of everyone in the room. Ask employees and managers to submit their achievements. You might only be giving out 12 awards, but you just recognized everyone in the room with the slide show. There are hundreds, if not thousands, of ways to celebrate and recognize employees for their work, dedication and excellence. And every way you find will foster, encourage and create fun.
3. Energize Meetings
Skit night is a big deal. What is skit night? “You can’t miss skit night,” I was told repeatedly. “What time are you coming to skit night?” I was asked. Believe me, I am not missing skit night. Skit night is the highlight of the annual leadership meeting for one of my large apartment management clients. On the opening night, the CEO and COO give a presentation. And then skit night happens. Several of the regions are tasked with performing a skit that can and does include everything from acting, video, music, lip synching, and “dancing”. Each region performs every other year, to increase the anticipation. www.aamdhq.org
Each skit was about their culture, current trends, executives, state of the business or and just about everything else. Between the videos and the stage performance, dozens of people were involved in each performance.
The sessions were fun and built around an important skill that builds success. Fun can also be about business. Taking a few hours once a year to promote and encourage innovation offers year round dividends.
When I saw skit night, I was amazed, delighted, and entertained. I spoke to the CEO after the meeting. He couldn’t have been happier. You see, skit night has nothing to do with the performance. Sure, it adds some fun, energy and laughter to the annual meeting. Skit night is about the time spent back at the office planning, writing, producing and rehearsing skit night. Managers and employees from each department spend time together creating their skit. Everyone in the region is involved at some point.
Most of the sessions were focused on serious topics and creating ideas to help build their business which means saving lives and helping their patients that use their devices.
Skit night is a release. Everyone working on the common objective of skit night is an equal. Different departments working together on skit night builds camaraderie, respect, loyalty, passion and friendship. Those are the same skills that will be needed during a crisis. Skit night is fun. And just one more reason why the company is consistently named one of the “Best Places to Work.”
4. Promote Innovation.
I was recently invited to speak at a medical technology company’s Innovation Week. Each day offered a different session that lasted 1-2 hours. The sessions ranged from a panel sharing innovation achievements from the past year to participating in a brainstorming session for new ideas. Different speakers were brought in to discuss and build innovation skills. All of the sessions occurred on site and were attended on a voluntary basis. Employees and managers were encouraged to attend with door prizes and giveaways.
The Innovation program was about their business, but also a break from their routine. It was special and different. Again, these are the ingredients for fun.
5. Donate your time.
Donating time as a team creates a fun, rewarding experience. I have participated in dozens of programs over the years. And I have yet to hear someone complain. There are hundred of possibilities to create fun and give back to the community. Here are three of my favorites: 1. Team shopping excursion. Choose a worthy recipient organization. Split the group into small teams of six or less. Give them a mall gift certificate, a shopping list and a 1 hour timeframe. Stand back and let the shopping begin. My group ran from store to store with our list, looking for the best discounts. We wanted to see how much we could buy on our list. Every group did the same thing, running through the mall with energy and excitement. The best part was when the organization came to the meeting to accept the donation. 2. Creative United Way fundraisers. Many companies run United Way campaigns through paycheck donations. The annual United Way campaign (or any charity) is a perfect opportunity for fun and creativity. One client had a talent show. Another client made a miniature golf course at the office. Any visitor (vendors, partners, customers, delivery men) would pay a few dollars to play the course. One client had a cubicle decoration contest. Contact your local United Way and they can probably give you 100 great ideas. 3. Spend a day giving back. Many of my clients have given their most precious gift: time. Spending a day (or even a few hours), cleaning, painting, building, reading, or helping brings people together. It isn’t just fun for the employees. It is rewarding.
6. Improve your surroundings.
I visited a client in their office a few weeks ago. When I walked in, I noticed a huge painting, separated into small vibrant boxes. I mentioned the painting to my client. Her department created the painting over the
JULY 2013 • TRENDS | 19
“No matter the company or industry - a scavenger hunt or a silly build-a-rocket-outof-aluminum-foil-and-toothpicks is always going to be more fun than another day of processing, accounting, selling, distributing or insert-job-activity-here.” course of several days. Each team member chose one of the boxes for their portion of the painting. Four people could work on the painting at one time. Each box within the painting represented the team member’s style, interests, and personality. Their first objective was to enhance their surroundings. The training department moved into a new office with blank, white walls, which they were told not to paint. The second objective was a fun activity that brought the team together. The third objective was to highlight the team’s individuality and personality. For the price of some paint and a large canvas, the department created an easy and fun activity. Every day they walk in the office they see the result and are reminded of the teamwork, passion, creativity and inspiration that went into the painting. When someone new walks into the department, usually their first comment is about the painting. Employees show off “their” square and talk about the art. Like all great art masterpieces hanging in museums, it brings people together. Except this one only cost a few dollars.
20 | TRENDS • JULY 2013
Competition is always fun. I always laugh when a corporate scavenger hunt (or similar competitive activity) begins. There is always a group that is “too cool.” They hang back, crack jokes and resist. And then a funny thing happens. They see everyone having fun. Or they can’t resist the urge to help their friends. Or they can’t resist their urge to do something. Whatever it is, a transformation happens. The “too cool for school” kids participate and have fun. Grumpiness erupts into giddiness. No matter the company. No matter the industry. A scavenger hunt or a silly build-arocket-out-of-aluminum-foil-and-toothpicks is always going to be more fun than another day of processing, accounting, selling, distributing or insert-job-activity here. My favorite competitions are the ones that are about being “best” at their given job. A quick service restaurant client has competitions for the best car hops. The best of the best are invited to the annual meeting to compete. An apartment association client sponsors a skills
competition for employees in maintenance. I loved watching each company cheer on their colleagues. I don’t think I have ever been in a louder, more fun environment at a meeting. Fun is different for everyone. Still, there are some common ingredients that create fun. Fun doesn’t have to cost anything or take a lot of time. And in the corporate world right now, the fun bar is so low, that it really doesn’t take much to hit a home run. Find your fun. Encourage it. Fight for it. Find your Lone Ranger or 4-foot chess piece. Give back. What is your skit night? What is your Innovation Week? More importantly, what is your fun? Joel Zeff (www.joelzeff.com) is a national workplace expert, speaker and humorist. His spontaneous humor and vital messages have thrilled audiences for years. Corporations and organizations nationwide seek him out to motivate and energize their employees on such topics as work/life balance, passion at work, creativity, communication, teamwork, and leadership.
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Successful strategies for superior customer service
uilding a positive relationship with your residents and potential residents can make a tremendous impact on their decision when choosing a place to live and stay. A renewed focus on customer service is required during these competitive times and we will not survive without loyal residents. Set yourself apart from the rest and be distinctively different.
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When interacting with residents and potential residents, ask yourself:
1. What positive experience will they have which sets me apart from the competition?
2. Have I done everything to earn their trust and loyalty?
3. Will my service experience be memorable to them? •
Here are few strategies to consider:
Superior Communication. Continually communicate with your residents and keep them in the loop. Residents can handle extending repairs or a vendor running late if we communicate, what they can’t handle is when we don’t relay the information to them. There will be occasions when we don’t have a solution, keeping them updated is important. Become a Service Champ. Customer service shouldn’t be something we just read or think about. We need to create the service difference and service experience. Always look for opportunities to exceed the expectation of your residents. Alleviating
your resident’s concerns is a great opportunity to display superior customer service. Be determined to be the best, not only at your community but in the industry.
Be Valued. Become your community’s problem solver and partner with residents to resolve their concerns. When residents are upset because of a problem in their home, trust starts to diminish, show them you care and assist them during these troubled times. Use innovative ideas and solutions to enhance the relationship between resident and management.
Customer service is tremendously crucial in today’s industry. It can set you apart from the rest and make you more successful. The type of customer service you provide is a reflection of your company’s values and mission and will be a reflection of you commitment.
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Responding to negative online reviews and defamation
he internet is the world’s major engine of free speech. The absence of “rules of the road” in the online universe has been a contributor to the growth of the World Wide Web as a venue for the publication of information and opinion. For the younger generation around the world, the internet has become the first source for information about everything from music, to food, to politics, to a place to live. However, what people see online may or may not be reliable: it can be true; it can be opinion; or it can be false. It can have been motivated by the blogger’s excitement and joy (or “like”), it might have been an honest attempt to describe the blogger’s own experience, or it can be an out and out lie published with a vindictive intent to cause damage. The housing industry relies more and more on internet advertising; we list our vacancies on Craig’s List. So it should come as no surprise that apartment communities and property managers are showing up more and more on blog posts. Of course, we love it when we receive positive reviews, but what do we do when the reviews are negative? Particularly, if we don’t feel that the criticism is justified. Even worse, what if the information is patently false? The First Amendment to the U. S. Constitution makes speech free. With some limited exceptions, Americans can say what they want about anyone or anything. We value our freedom of speech and believe that the most effective way to defeat prejudice and misinformation is to allow the freedom of speech to shine a bright light on evil. As a result, our courts are very reluctant to limit speech. The law of defamation is a limit on our free speech rights. To prove defamation a plaintiff must persuade the court or the jury that the blogger-defendant: 1. used defamatory language – language that is an assertion of an untrue fact that adversely affects plaintiff ’s reputation (e.g. suggesting plaintiff ’s lack of honesty or integrity); 2. which is specifically about the plaintiff; 3. that has been published (disclosed to 3rd parties); 4. which causes damage to plaintiff ’s reputation; and www.aamdhq.org
5. is at fault – usually, that the defendant knew that the statement was untrue (known as “malice”). However, because of the court’s bias in favor of free speech, the nature of the evidence needed and elements of the claim, defamation is a difficult and expensive claim to prove. The courts are equipped to grant two types of relief: award money damages and/or issue a court order called an “injunction” requiring that the untrue statements be removed from the publication.
There are a host of problems faced by the injured party seeking the assistance of the courts. You can’t always determine who posted the negative statement. While it may be possible to track the source of the lie to a specific email address or computer, if the trail leads to a publicly accessible computer at an internet café, there may be no way to identify the person who posted the blog. If so, there is no identified person to sue. Internet service providers (“ISP”) argue that they are merely “bulletin boards” and do not have the power or capacity to screen the information posted through their web access. In addition, ISPs have their own free speech protection. As a publisher of defamatory materials, they have no liability, but can be required to remove false information posted through them. However, they also have a large legal budget and you may be tangled in expensive litigation to obtain the favorable result that you seek. It can be challenging to determine if a statement is untrue or simply a negative opinion. Online statements can be crafted to obscure an outright lie to make it sound like the blogger’s opinion. The courts will be reluctant to limit free speech where the statement is not clearly false.
Does the blog posting really hurt your business or business reputation? How many people will really see it? Of those that see it, how many will really believe it and rely on it? Are there positive postings that will minimize the effect of the negative one? There is a cartoon in the current New Yorker magazine by P. C. Vey depicting a man drinking at a bar telling his companion “Being falsely accused on social media has left my life largely unchanged.” While the false information may drive us crazy, before time and resources are spent in response, it should be determined if it really matters. There are law firms for hire to represent the interests of persons aggrieved by bloggers. While we hear in the news about the few successful cases brought against offending bloggers, the more frequent successful outcome may be those cases in which the ISP agreed to, or was required to, remove the offending posting. In reality, however, by the time that occurs, the offending post may have been replaced over time by other postings and may no longer even be seen by persons searching your name. Before you expend resources to address the problem of negative online postings, I suggest that you ask a few questions and discuss the answers with your legal counsel: 1.
How many of my future customers look me up online before doing business with me?
2. Are there sufficient positive reviews about me to overcome the negative one? 3. Is the negative statement so damaging that it can’t be ignored? 4. What resources do I reasonably have to deal with this problem? 5. If some action is necessary, what are my goals and what is the best and most efficient way to reach those goals? Let your outrage about the lie subside, then calmly analyze the situation, consider your alternatives, get some advice, and remember that the best way to maintain your reputation is to be a good, respectful and professional property manager. Phil Klass is managing partner of KlassLawGroup, a landlord-only lawfirm specializing in evictions and landlord representation in contract, security deposit, bankruptcy and discrimination litigation. JULY 2013 • TRENDS | 25
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Don’t Make Them Wait
A Secret to More Leases and Happier Resident
mericans spend roughly 37 billion hours each year waiting in line, and a good percentage would likely choose a tooth extraction over a spending a morning watching their life slipping by at the DMV. Our impulsive, “we want it now” society has resulted in an American public that hates to wait. Most everyone at one time or another has abandoned a shopping cart, or dropped goods on a shelf rather than seek out an elusive checkout person or face a long wait to purchase, or obtain a service. According to Perry Kuklin, in commentary at Retail Customer Experience http://www. retailcustomerexperience.com/article/208673/ Commentary-The-impact-of-checkout-timeon-customer-service-perception, even the most innocent of things can rub a waiting customer the wrong way. Slow or chatting cashiers, for example, irritate nearly 70 percent of consumers, and 1/3 of customers forced to wait for over five minutes have abandoned the checkout line. Paco Underhill www.pacounderhill.com/, author of Why We Buy and Call of the Mall stood in line with a stopwatch to determine how real wait times compared with how long shoppers felt they had waited. His findings indicate up to about two to three minutes, the perception of the wait was pretty accurate, but after three minutes, the perceived wait time multiplied with each passing minute. In other words, if a person actually waited 5 minutes, their perception was they had waited 10. No wonder it seems like torture. Interestingly, customers are more willing to tolerate the wait time if they perceive the checkout process is being actively managed. “But I don’t have checkout lines”, you may be saying. “What does this have to do with apartments?” Though in multifamily we technically don’t make people wait in line, many times, they do have to wait. Based on this research, the longer they wait, the even greater time they will have perceived they waited. There are times clients in a leasing office are not even greeted in 3 minutes. What’s a savvy multifamily professional to do? First, understand that while lease paperwork needs to be finished, every second spent focusing on that, rather than the customer waiting in the www.aamdhq.org
lobby, negatively impacts perception. The paperwork will wait. Make it your practice to always focus on the client immediately. Second, reality dictates no matter how good you are, sometimes people will have to wait. • Provide something for them to do. Show a movie in your clubhouse, consider touchscreen technology, have current newspapers and periodicals available, (make sure there is something for every interest), and give your clients an indication of exactly how long the wait will be. Uncertainty magnifies the stress of waiting, while feedback in the form of expected wait times and explanations for delays improves the overall experience. Make it their choice to wait by making them feel comfortable, but also offering an alternative appointment time. They will let you know which they prefer. Offer a beverage, or better yet, provide a Starbucks card and send them off for coffee, assuring you will be ready for them when they get back. • Keep it fair. Think about the last time you spent a long time waiting just to have someone cut in line. Snarls and a riot likely ensued. Be fair. Those there first are served first. • Most important, (this one is for managers and bookkeepers and individuals that do not
perceive themselves as leasing professionals), never ever pass off a client with the, “The leasing professional is out right now, have a seat and she will be with you in a moment” line. When is the last time you were OK with being “passed off ”. The people in front of you are priority and there isn’t a faster way to turn somebody off than to throw that line at them and return to your desk to do the really important work. • M ake the end of the wait a happy time. People who wait less than anticipated leave happier than those who wait longer than expected. If you are about to begin a presentation with one client, slightly overestimate the time you think it will take. This provides a little cushion, as well as a positive surprise when the expected wait time is less than anticipated. If clients have waited a good while, don’t forget to acknowledge and thank them and give them as coffee card or small treat to acknowledge their sacrifice. Three minutes. After that, the perceived wait doubles with every minute. Don’t make them wait. Lori Snider is a national presenter and marketing consultant with decades of multi family experience. Lori can be contacted at www.lorisnider.com. JULY 2013 • TRENDS | 27
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ECONOMY les simpson | DEFERRED TAX BENEFITS, INC.
IRS Code 453: 1031 Alternative and Negotiation Tool
any people have done well in the real estate market over the last few years. In fact, real estate has been a solid investment for decades, and for many investors it continues to be an attractive investment. Some investors, however, who have built impressive real estate portfolios, or own a property or business that has appreciated tremendously, would like to take advantage of their equity and sell their business or real estate investment(s) and look forward to a new life in retirement.
Baby boomers own a vast amount of businesses and properties and are beginning to retire. As they consider retirement they are faced with several problems, including substantial capital gains taxes on the sale of their assets and investment strategies that will provide for a retirement that can last as long as their working years! To make things worse, the U.S and world economies continue to be volatile and sluggish and investors worry about losing a lifetime of equity and resources in a risky environment. A 1031 would allow them to avoid the taxation, but they would continue to be invested in real estate and fear that they are buying at the top of the market, if they can find a property at all. An installment sale, under IRS Code 453, can provide a stream of income as well as tax deferral; however, there are substantial risks of buyer default and the prospect of coming out of retirement and repossessing a property is not attractive. For many, the solution is to just sit and wait
for an answer or opportunity to present itself. Meanwhile, potential buyers have to wait or move on to other opportunities.
As a buyer, if one can anticipate these problems and offer solutions to them, an owner may be willing to make the sale and enter into his or her “golden years” of retirement. In addition, by addressing the problems and concerns that a seller is faced with, a buyer may even be able to purchase the asset at a discount! The Structured Sale is a “tool” that can be offered to give the seller of a highly appreciated asset the tax deferral and possible reduction and guaranteed stream of income that they may be looking for. The following example illustrates how this can be done. John Smith owns an apartment building in Indiana. The building has 24 units and he is asking $5,000,000. John is 65 years old and has owned and managed the apartments for the last 20 years and would like to retire with his wife. He has minimal investments outside of the property and is concerned about capital gains taxes as well as providing an income that would provide for a lengthy retirement. He and his wife are in good health. On the other hand, the buyer’s lender and appraisals value the project at $4,300,000. With these facts in mind a buyer could consider the following:
$5,000,000 in a structured sale would provide $19,158.65 per month, guaranteed for 30 years to age 95.
A buyer could offer Mr. Smith $16,500 per month, guaranteed for 30 years. All payments would be guaranteed by US Treasuries and a trust, so the risk of buyer default is eliminated and his income for retirement is guaranteed for a 30 years to age 95. This offer would be a total of $5,940,000 over 30 years, which exceeds his normal life expectancy. The cost of this offer would be $4,306,149, a discount of $693,851. Mr. Smith may be willing to accept this because all of their concerns have been addressed. More importantly, the buyer gets a 13.87% discount on the property!
Instead of increasing the offer to entice the owner to sell, a smart buyer should understand the obstacles to the sale and offer solutions, which may be more important than money, to the seller
The mechanics of the structured sale allow the buyer to pay cash or with a conventional loan. Both the buyer and seller can control their cash flows independently, which makes the negotiation process much easier! All future payments to the seller are guaranteed and there is no ongoing relationship between the parties.
The Structured Sale is a very simple process with no out of pocket expenses or fees. It provides flexibility, tax deferral, and security to the seller. It also provides flexibility, and possibly savings, to the buyer! If you are faced with a situation where you have a gap in the asking price and the offer, a Structured Sale may help you bridge that gap.
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NATIONAL APARTMENT ASSOCIATION
NAA/NMHC Testify on Multifamily Job Creation in U.S. House of Representatives
ighlighting the economic strength of the apartment industry in front of Congress, NMHC Chairman Tom Bozzuto, also chairman and CEO of The Bozzuto Group, represented NAA/NMHC before the House Energy and Commerce subcommittee during the June 4 hearing, “Our Nation of Builders: Home Economics.”
His testimony focused on many of the takeaways from the NAA/NMHCcommissioned report, The Trillion Dollar Apartment Industry, and drew the connection between job creation, manufacturing and multifamily development by showcasing some interesting facts related to his company’s new $72 million apartment community under construction in Baltimore’s Union Wharf. For example, the building required enough concrete to fill 240 swimming pools, lumber to span
about 331 miles and drywall to cover more than 42 football fields.
Postal Service Initiates Mail Delivery Changes As part of an effort to reduce delivery costs, some local postmasters have advised apartment owners and managers in some states that mail deliveries to new addresses, including apartment communities, will be made to outdoor “cluster box units” (CBUs) instead of traditional mailboxes inside the apartment building. The notices indicate the postal service also plans to deliver packages to secure parcel lockers instead of locations such as leasing offices and concierge desks for residents to retrieve them. These notices indicate that the local postmasters have authority to initiate delivery
changes through the United States Postal Service (USPS) Postal Operations Manual; however, USPS says it is not currently planning forced conversions to centralized delivery for properties with established service. USPS says it will purchase and install CBUs without charge for apartment communities currently receiving regular delivery, if they voluntarily request centralized delivery service. NAA/NMHC have requested clarification from USPS on its delivery policies for apartment communities and the process to appeal delivery decisions.
New NAA/NMHC White Paper to Offer Information on Music Licensing Issues Performing rights organizations (PROs) have contacted a number of NAA/NMHC
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members regarding music played in common areas at apartment communities. These PROs contend that apartment communities must obtain licenses for certain uses of copyrighted music in leasing offices, fitness centers, pools and other common areas, depending on the media (i.e., CD, DVD, Internet streaming, live performance, etc.) and equipment used (i.e., radio, television, computer, mobile device, etc.). Other factors, such as the square footage of the area, the number and/or size of speakers and screens and method through which the music is obtained (cable, satellite or other service provider), also contribute to whether licenses are needed. Three major PROs — SESAC, Inc., Broadcast Music, Inc. (BMI) and the American Society of Composers, Authors and Publishers (ASCAP) — sell these license agreements to businesses, each representing different copyright owners and only licensing the material of those they represent. Given the complexity of the issue and the compliance hurdles, NAA/ NMHC have commissioned a members-only white paper that will provide information about how the U.S. Copyright Act and relevant legal precedent may apply to apartment communities.
Local Housing Authorities Continue to Deal with Budget Cuts Affecting Section 8 Programs Efforts to manage the effects of recent budget cuts resulting from the sequestration could affect apartment owners and managers who participate in the Section 8 program. Local housing authorities are exploring a number of options to manage the cuts, including adjusting payment standards, renegotiating existing Housing Assistance Payment (HAP) contracts and, in some cases, cancelling voucher assistance. NAA/NMHC have heard reports of some public housing authorities overstepping their authority to impose rent reductions. To help affected members navigate this situation, NAA/NMHC have prepared a guidance document outlining steps apartment firms should take if they are contacted by their housing authority regarding a proposed modification to an existing HAP contract.
Lawmakers Begin to Sketch Out Proposals for Mortgage Finance Reform Movement is underway to possibly begin a serious effort at housing finance reform in Congress. On the Senate side, Senator Johnny Isakson (R-Ga.) reintroduced a bill (S. 1048) on May 24 that would transition the system away from a government guarantee of a mortgage or mortgage-backed security; the measure does not specifically address multifamily lending. Senators Mark Warner (D-Va.) and Bob Corker (R-Tenn.) currently are drafting legislation that sources say would establish a single government entity in place of government-sponsored enterprises (GSEs), Fannie Mae and Freddie Mac, to purchase and securitize mortgages with a partial government guarantee. The current multifamily lending programs, while consolidated, would continue to operate with little modification. Notably, the bill also would generate funds for affordable housing by imposing a fee on all mortgages. On the House side, Financial Services Committee Chairman Jeb Hensarling (R-Texas) is still in the process of examining GSE reform options. Representatives John Campbell (R-Ga.) and Gary Peters (D-Mich.) began work on a bill similar to Senators Warner and Corker’s draft legislation. For more AIMS Updates, please visit www.naahq.org.
JULY 2013 • TRENDS | 31
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