ACCESSLASVEGAS YOUR ACCESS TO THE LAS VEGAS MULTI-FAMILY HOUSING MARKET
April | May 2011
Staying Ahead of Your Competition
Las Vegas Occupancy Corner
page 10 Management Measurement
More and More People Choosing to Rent An Apartment, Not Buy, Their Home
Homeownership rates are falling as number of renters rises with supply and demand in apartments About 66.5% of U.S. households owned their home at the end of 2010, down from 67.2% in 2009. The rate was 69% at the end of 2005, according to the U.S. Census Bureau. The main driver of last year’s drop was the substantial rise in renters. The number of homeowner households dropped by just 30,000 in the fourth quarter last year compared with a year earlier, but 1.1 million renter households were added in that time period. “We’re keeping steady on the total number of homeowners at 75 million, but all of the [household] additions are renters so the ratio goes down,” said David Crowe, chief economist for the National Association of Home Builders. It’s the younger demographics where homeownership rates are falling most, while the rate among those ages 55 and older have been more stable, he pointed out. Popular reasons for why people are choosing to rent rather than buy have been widely reported: Some Americans remain concerned about home prices falling more, while others remain uncertain about the stability of the job they have. And for some, tighter credit standards for mortgage loans have been a factor. This made demand in apartments rise much higher than expected last year. But there might be another trend here, one that could have legs even after the economy recovers and housing markets are looking stable again: A return to making purchase decisions based on what is appropriate for the individual’s situation -- not based on an expected return on investment. “Traditionally, housing choices in the U.S. have been made based on need -- what is the appropriate housing for your lifestyle,” said Greg Willett, vice president of research at MPF Research, a provider of market intelligence and insights for the multifamily housing industry. “During the boom period… [people] got off track.”
April | May 2011
Staying Ahead of Your Competition: Texting Residents Will Get Their Attention When it comes to delivering the message to residents, some management firms have their fingers, er, thumbs on the situation
Sure enough, the rent check arrived within a day. Was the college-age student not getting the message? Maybe. For the manager, even more valuable than getting the rent check was the lesson learned that Generation Y tends to pay more attention to requests made by text. “It’s weird,” he says. “But this is the way that members of this generation have trained their parents on how to get them to do what they want them to do.” The college students of today are the residents of tomorrow. Texting has grown right along with the number of consumers who spend much of their days with their cell phones in hand. Results from national apartment-resident survey firm SatisFacts show that cell phone (53.9 percent) is neck and neck with e-mail (55.7 percent) as residents’ No. 1 preferred method of communication, according to data released February 2011. More than 11 percent of respondents specifically stated texting as the preferred method, a number that is climbing as SatisFacts only started polling this option in September. More than 6.1 trillion texts were sent in 2010 and there are an estimated 2.4 billion active users of SMS (short messaging service, the most widely used form of texting), or 74 percent of all mobile phone subscribers worldwide, according to a February release by research firm mobiThinking. In an effort to give their residents what they want, forward-thinking communities are using or considering texting programs for their residents–of any age. The Text Generation Texting can create issues of concern and strategy for apartment owners. How often should they text? What should they text about? Are there privacy concerns? Should company policy be set about who sends the texts and if and when to reply? Many apartment management companies have enlisted the help of mobile and text-message service providers or have partnered with their Internet listing service (ILS) partners to develop customized programs that enable automated group and targeted resident texting. These blast-texting programs are the next wave in the apartment industry’s use of texting communications. They follow the text-message marketing strategies that communities use for prospective residents via signage and short codes, which were rolled out a few years ago. Results from those programs are mixed. Some have even abandoned marketing strategies focused on text messaging. “You need a strong print campaign to drive an efficient text-marketing program,” says Lynette Hegeman, Vice President of Marketing, Gables Residential. “Our focus has shifted from print to mobile, as we have seen far greater results with mobile web search. However, we have not completely given up on texting and find it valuable as a resident engagement and communication tool, just not as a prospect-generating vehicle.” 2
Text Me Spend a short amount of time with almost any person under age 30 and you’ll see they don’t spend much time actually talking on the phone, but will often whip out their cell phone to check for text messages and then zip out a reply almost immediately. College-age students’ desire to text was quickly confirmed for Kim Cory, Sales and Marketing Manager, University Village, when her company worked with an ILS’ technology department to build and then implement a text-based communications pilot program called the Mobile Club, at one of its biggest communities at Ohio State. “When we announced [in the fall] that we have a mobile club, 88 residents out of 2,000 signed up on their own free will,” Cory says. “We didn’t even market it.” Today, more than 500 are participating. Whereas such blast-texting programs are growing, traditional one-on-one, backand-forth texting is much less common at most communities -- including student housing. “They’d think it was weird” to receive a text personally from their manager (or owner), says one community manager. There are occasions where one-on-one texting works: residents living in one- or two-unit buildings managed by independent rental owners (IROs). Programs such as the one Cory uses primarily communicate notifications for emergencies, weather alerts, reminders for rent payment, social event invites and status updates on things such as deliveries or maintenance work orders.
Lisa Trapp, Director of Marketing, Sequoia Equities, Walnut Creek, Calif., expects text-message communications to be embraced across all demographic segments. “We think demographics are less of a factor, considering most from Generation X and the Baby Boomers have children, nieces or nephews, and employees who already text them,” she says, so those residents are familiar and comfortable with texting.
move-in, Fairfield asks residents for this approval while inviting residents to participate and engage with the onsite team via e-mail, social media sites, texting and traditional communication. Residents can opt out at anytime, Garcia says. The program costs Fairfield approximately $300 per month per community. Cory adds that some texting programs are available for about $100 per month, based on community size and participation.
Fairfield sends texts to residents about community events, resident-referral reminders and promotions. It uses texting to gain resident feedback on survey questions, allowing residents to select responses on their phone and reply.
A primary concern for apartment owners should be sending texts that speak to residents’ interests, Cory says. “Our purpose for our Mobile Club is to communicate immediately about information, deals, promotions or events we know they want to hear about,” she explains. “When you connect with them this way, they become ‘raving’ fans of yours.” San Diego-based Fairfield Residential, which owns and manages market-rate, affordable and student housing nationwide, has a texting program called Customer Care that is typical of the approach of many owners and managers who have carefully delved into text messaging in the past year. The company’s onsite management team oversees the texting program with the residents. A communication calendar and strategy is set each month and then executed via a host of communication channels, including texting. Fairfield rolled out its program at its 398-unit community Presidio Apartment Homes in Denver in February 2010, and according to its Vice President of Marketing Sue Garcia, more than 80 percent of the residents participate and only a handful have opted out. Garcia says Presidio’s resident demographic matches nicely with the mobile phone-user set and the property is located in the Denver Tech Center, another great tie-in given its tech-savvy residents. Fairfield also is committed to offering its “Living Green” lifestyle options, and the incorporation of texting can reduce the use of paper products.
Fairfield also implemented Mobile RSVP programs for its resident functions and activities such as pool parties, movie night, sunrise yoga and Monday Night Football, Garcia says. These offerings have gained rave reviews from residents, she says. At Presidio, for example, Fairfield provides a “Pressed for Time” dry cleaning service. This mobile platform, arranged through a software vendor, serves as the perfect solution to inform residents about the arrival of their freshly pressed clothing. “There are some situations where communicating through texting makes the most sense,” Garcia says. “For example, when a package is accepted in the office on behalf of a resident, a text message to the resident informing them of the delivery is appreciated as it allows the resident to stop by the office when coming home at the end of the day before they head up to their apartment home. This communication is welcomed because it is non-invasive.” These text-message notifications have saved “precious time previously spent playing phone tag with residents,” Garcia says. “This solution notifies our residents at the same pace that they move during their day -- on the go.”
Your package is in the office, come pick it up and have a great day from your leasing team at the Presidio :)
Here’s My Number Fairfield’s onsite team had to gain approval from residents prior to adding them to the text communication efforts. At the time of
April | May 2011
April | May 2011 with a signature line such as the property name. IRIO’s Managing Director John Bower says onsite staff members are alerted that replies have been sent, by whom, and how many. They may choose to ignore them, read them, respond to them, or continue a back-and-forth texting dialogue, as necessary.
Trapp, who launched Sequoia Equities’ program in February, says blast-texting could help her cut her budget on items such as printing notices, door hangers and fliers. She said currently Sequoia spends about $1,500 per 10,000 professionally made door hangers.
Manager for Gates, Hudson & Associates, Fairfax, Va., says that although many residents certainly text just as much or more than e-mail, from a management perspective, he wants to have formal, documented communication with residents.
Sequoia operates more than 10,000 units over 40 communities, with four exclusively serving student housing and three others including 25 percent student housing residents.
“In this litigious society we live in, you have to worry sometimes about how a text message or even an e-mail would stand up in court if the communication has to do with a legal issue or conduct codes,” Grackin says.
Whereas text messages are often received immediately by residents on their cell phones, written notes, voice mails or e-mails left by apartment managers might not be read until hours or days later. One misperception that Cory says some apartment management companies have made about young professionals or college-age residents is that they are plugged in through Internet access on their phones. Some owners, aiming to reach their “wired” and social-media savvy residents, have focused on sites such as Facebook or portals to communicate. Cory says she found out that many students at her community cannot afford Internet phone service. “We had been e-mailing them and putting things on Facebook, but many students didn’t spend as much time online as we thought,” she says. “Important, immediate information such as having a utility turned off wasn’t received in time. When we asked residents about events, we kept hearing, ‘I wish you had texted me.’ ” No ‘Paper’ Trail Not every company sees text messaging as an ideal vehicle for resident communications. Bryan Grackin, Regional 4
“ ... when we asked residents about events, we kept hearing, ‘I wish you had texted me.’ ” “We encourage all residents to follow their community on Facebook, where information is posted about events and fun things, in addition to fliers on community bulletin boards and high traffic areas,” says Grackin, whose firm manages approximately 5,000 units in the mid-Atlantic region, “but the cost of a mass-texting service just doesn’t seem worth it at this time with so many other free mediums to use.” Ready to Respond While few companies encourage managers to text directly with residents, some texting services include an option for the onsite staff to receive responses to blast texts and then reply back to the residents. With software developer IRIO’s product, the text is sent with the sender listed as a short code, followed by the message, ending
“It depends on how specific the language in the reply is and whether the community wants its staff to spend the time to engage,” Bower says. “Some replies simply are, “OK,” and others ask more elaborate questions and might deserve a response or two.” Cory envisions that texting will someday displace e-mail altogether. Her communities have not had trouble gaining the e-mail addresses from her resident base, she says (at one community, she has 1,981 out of 2,300 -- “That’s pretty darn good,” she says), but tracking shows that e-mails sent by her office staff are read by only 13 percent to 18 percent of the students. Cory’s Ohio State community now has a formal marketing effort for its text service with signage throughout the property, announcements on its website home page and reminders to sign up on Facebook. In six months, University Village went from 1 percent of its residents using the mobile club to more than 25 percent. If the popularity of text messaging continues to grow, such successful text message communications programs could appear at more communities nationwide -- as long as residents get good cell phone reception. When Traditional Texting Does Work for Residents There are occasions when one-on-one texting does work: residents living in one- or two-unit buildings managed by independent rental owners (IROs), in which the renter has a comfortable, established, professional relationship with the owner. Jenna Lee, an experienced renter who lives in Washington, D.C., shares her thoughts on resident / owner communications:“E-mailing is my
5 preferred method of communication. I prefer e-mail because I like to have the record of the conversation, it’s a little easier to have a more in-depth conversation, and I can copy my roommates on the e-mails to keep us all up-to-date. “I like having the option to text because it is an easy way to answer or ask questions in cases where e-mail might slow down the process of getting something fixed in my apartment. It’s also nice to have another way to get in touch with my landlord. On average, we have a brief text conversation (back and forth, maybe four or five texts) about twice per month. “I like texting with my landlord because I feel comfortable with him. I don’t think I would feel as comfortable texting past landlords. I trust him and don’t feel the need to keep records of all of our conversations as I have with others.
“For so many renters these days, their cell phone IS their home phone” “My owner texts if he is going to stop by the house to check on something or drop off something for us such as a new furnace filter. He also texts to check when we sent in our rent checks or if there is something else that he may need to stop by for, such as if any USPS mail was delivered to the [rental property]. In cases that involve larger repairs -- such as projects that require a contractor to visit the property -- we e-mail.” ‘Can I Have Your Number?’ A text-message program can only be as
management. “We’re learning the appropriate social ethos” of this method, she says. Following are examples of what Sequoia Equities’ office and service team members might send to residents: From Office Team “A package has arrived for you in our office. Would you like us to deliver it to your home?” good as the number of resident cell-phone numbers a community can collect. Gables Residential, with 60,000 units spread over 140 communities, made a push starting in October to gain e-mail and phone number information. Lynette Hegeman, Vice President of Marketing, Gables Residential, says the company got 70 percent of its residents’ cell-phone numbers. This can include more than one contact number per unit, as often a husband and wife have different cell phone numbers.
“Remember, valet trash is picked up on Tuesdays and Thursdays this week. Take advantage!” “We have a new team member in the office, Angela -- if you see her around our community, be sure to say, ‘Hello.’ ” “Our ACS Relay for Life Bake Sale is tomorrow -- come down and donate a dollar for one of Sherry’s famous brownies!” Maintenance / Service
“For so many renters these days, their cell phone is their home phone,” Hegeman says.
“Don’t forget our parking lot is undergoing a slurry seal Wed at 8 a.m.”
Leave a Message
“Tomorrow we will be testing fire alarm drills, so do not be alarmed.”
Knowing what topics are appropriate for text messages is an ongoing challenge for some apartment managers. Sequoia Equities, with more than 10,000 apartment units, uses a modified “best practices” text subject matter policy provided by a software firm. For example, the company does not text information about recovering money owed for delinquent accounts. Its policy is, admittedly, initially vague, Director of Marketing Lisa Trapp says, as resident texting is new to Sequoia’s
“Put us to work! If you need pictures hung or accent walls painted just call the office -- we’d like to help.” “Our gates are temporarily not working, so we will leave them open until they are fully repaired. More to follow.” Article Written By: Paul R. Bergeron III. Digested from Units Magazine, published by the National Apartment Association.
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Type to enter text
Las Vegas Metro Occupancy Trends March 2010 through February 2011 91%
90.46% 89.89% 89.97% 89.98%
OVERVIEW: This improvement reflects the continued migration from single family homeowners into apartments. While the move up effect has put a burden on the Class “C” and to some respect the Class “B”, all categories seem to be improving. There are still quite a bit of foreclosures lining up in front of us and it will be interesting to see how that affects apartment fundamentals going forward. Source: Spencer Ballif and Jeff Swinger of CB Richard Ellis (Las Vegas) (113,498 Apartments Surveyed in December)
Las Vegas Snap Shot
MULTIFAMILY MARKET COMMENTARY – FEBRUARY 2011 (NATIONAL PERSPECTIVE) Expect Continued, but Modest, Improvement for Multifamily in 2011 Despite sluggish job growth and the slowly recovering economy, the multifamily sector saw relatively healthy asking-rent growth last year, preliminarily estimated at about 3 percent. However, that doesn’t mean rent will continue to grow at that pace in 2011, as some industry participants have been suggesting lately. Rather, we expect normalized rent growth of 1 percent to 2 percent this year, with the possibility that we may reach 3 percent in 2011 if job growth accelerates during the second half of the year. Reasons for a more normalized rent environment include projected subdued job growth for 2011; concession rates that are still above normal levels; the severe overhang of “for sale“ housing which competes as shadow rentals; and the continuing, albeit moderating, new supply of completing condo and apartment rental units. Sluggish Job Growth Although the economy is in recovery mode, it may not seem that way, especially to the nation’s 13.9 million unemployed workers. Unfortunately, the unemployment rate is expected to remain in the 9 percent range all year, as demand for jobs continues to outstrip job growth. Last year saw fewer than 1 million new jobs created during 12 months, averaging well below the 250,000 new jobs needed monthly to begin returning to pre-recession employment levels over the next few years. According to Moody’s Analytics, 2011 is projected to create 1.6 million new jobs, thereby keeping robust rental demand in check. Housing Overhang Remains Substantial According to published reports, Moody's Analytics estimates that there were 1.8 million foreclosures in 2010 and that there could be as many as 2.1 million additional foreclosures in 2011. In addition, as of fourth quarter 2010, there were more than 13 million vacant housing units in the U.S., as seen in the chart below. The Census Bureau reports that there are 3.9 million vacant housing units available for rent, 2 million units available for sale, and 7.2 million units that are being held off the market for unreported reasons. Even excluding the “held off market” units, the Census Bureau estimate shows nearly six million vacant housing units for sale or for rent available today. That’s a lot of supply for an economy creating fewer than 100,000 jobs on average per month.
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PER UNIT PRICE
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NAI Global / 702.383.3383 x1
BROKER / CONTACT INFORMATION
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April | May 2011
April | May 2011
LOCALEFFECTS Las Vegas Apartment Market Ranked Near Bottom Source: Hubble Smith, Las Vegas Review-Journal
Las Vegas ranked next to last in a national apartment index compiled by real estate investment firm Marcus & Millichap. Gradual recovery in the gaming industry will strengthen apartment operations this year, but elevated vacancy rates and modest rent growth kept Las Vegas at No. 43 near the bottom of the index, the firm said in its 2011 national apartment report. "As the national economy recovers, stronger consumer spending will help elevate tourist activity in the metro (area)," the report said. An increase in the number of visitors to Las Vegas in 2011 will support a 3 percent gain in the leisure and hospitality sector, a key driver of apartment demand. Apartment vacancy will retreat 80 basis points during the year to 9.1 percent, Marcus & Millichap projected. The rate fell 130 basis points in 2010 as a result of pent-up demand for multifamily housing. Average rent will increase 0.5 percent to $808 a month, the first increase in three years. Effective rents, taking out landlord concessions and specials, will climb 0.9 percent to $756 a month. Construction of new apartment units is expected to decline to 900 units, or 650 fewer than last year, raising the inventory by about 0.7 percent, Marcus & Millichap reported. Las Vegas-based Applied Analysis business advisory firm showed apartment occupancy at 91.6 percent in the fourth quarter, a slight decrease from 91.9 percent in the previous quarter and up from 90.1 percent a year ago. Average asking rent was $756 a month, 8
compared with $760 in the third quarter and $770 in fourth quarter 2009. The highest rent of $906 a month was found in the southwest submarket, while the lowest of $628 was in the northeast. Occupancy and rents continue to suffer from the local economy's contraction. Las Vegas lost 13,100 jobs last year, including 10,700 in construction. The leisure and hospitality sector added 1,100 jobs, Applied Analysis reported. "Low levels of demand in the labor market will continue to put pressure on multifamily communities," Applied Analysis project manager Jake Joyce said. "As long as the 138,700 jobs removed the recession remain lost, a fundamental imbalance will continue putting pressure on pricing and occupancies within the sector." Apartment complexes in Las Vegas have changed ownership at extremely sharp discounts over the past several quarters, making banks hesitant to consider moving troubled properties off their books, Marcus & Millichap reported. However, stabilizing conditions and low interest rates will draw investors to the market, helping to close the expectation gap between buyer and seller and encouraging lenders to list assets that qualify for syndicate financing. A limited portion of the $140 million in distressed apartment properties will become available this year. Apartments around the University of Nevada, Las Vegas, will be sought the most because of steady demand from students and nearby casinos such as The Cosmopolitan of Las
Vegas, which generated 5,000 jobs when it opened in December. According to U.S. Census data, multifamily housing starts of five or more units increased to 20.4 percent in December, compared with 13.5 percent in December 2009. Furthermore, building permits for five-plus units jumped to 27.1 percent of all permit activity in December from 21.3 percent a year ago.
Vegas Apartment Rental Rates Falling Decline Comes As Cash Buyers Move Into Market Source: Applied Analysis
Apartment rental rates in the Las Vegas valley continue to decline as more empty homes remain on the market and investors from out of state swoop in to buy inventory at discounted prices. A recent report from research firm Applied Analysis found that the average asking rent per unit was $756 in the fourth quarter of 2010, down from $770 during the same period the previous year. The most popular area for renters is southwest Las Vegas, the company said. Occupancy and rental rates are highest in the southwest at 94.2 percent and $906 per month. The lowest occupancy rate, 88.5 percent, was in the north. The lowest rental rate, $628 per month, was in the northeast. The recent report came a day after the Greater Las Vegas Association of Realtors announced that 51 percent of home buyers in January paid with cash, adding to the number of rental homes on the market. While the GLVAR applauded buyers for clearing inventory, the increase of rental properties could lead to a further decline in rental rates.
INVESTORINSIGHT Multi-Year Opportunities for Multifamily Investing Source: Robert R. Kilroy, CFA, Managing Director, Chief Portfolio Manager of Grosvenor Investment Management US, Inc.
In every economic downturn, there are both losers and winners. The current recession -- or, more optimistically, the recently ended one -- has been devastating for many of the nation’s homeowners, forced out of their homes by job loss, foreclosure or both. The beneficiary of this distress has been the multifamily industry as a whole, particularly owners of cautiously leveraged assets in early-recovering markets and savvy developers who lightened up on new construction early in the downturn. As construction financing nearly evaporated in 2008 and 2009, multifamily housing starts plummeted. Now, however, as the economy begins to recover, a tremendous gap between multifamily housing demand and supply has emerged. This shortfall has created a compelling investment opportunity that is likely to persist for the next several years. Changing demographics, lifestyles and economic trends are colliding to drive demand for rental housing in the United States. A primary legacy of the recession is a pent-up demand for living accommodations. Driven from their homes
by foreclosure, many individuals and families have “doubled up” or moved in with relatives. These individuals are eager to live on their own, but are likely precluded from buying new homes due to credit problems and/or tighter lending standards. They will have no choice but to rent. Population growth also favors the multifamily market. Recent trends suggest annual population growth of about 1.1 percent, or 3.4 million people per year, including 1.1 million legal immigrants. Even though the rate of household formation has fallen significantly over the past two years due to the recession, gross demand for new housing units in the United States is expected to increase by 1.5 million per year for the next several years. Gross population growth figures do not tell the whole story of the nation’s changing demographics. About half of the population falls into two large age groups: 76 million (in 2010) baby boomers, aged 46 through 64, account for about 25 percent of the U.S. population, while about 77 million Generation Y or Echo Boomers, aged 15-32, account for another 25 percent. Analysis of demand across all age cohorts indicates that 20- to 30-year-olds are more likely to rent, by a considerable margin, than any other age group. The supply of new multifamily residences is likely to be highly limited for the next several years. From 1959 through 2008, annual multifamily housing starts ranged from a low of approximately 200,000 to a high of approximately 1 million residences, averaging about 350,000 starts per year. In 2009, starts fell precipitously to about 97,000 units and rebounded only slightly in 2010 to approximately 107,000 units.
Lack of financing is a major factor driving this shortfall. Domestic banks, the traditional source of construction finance, are focusing on resolving problem loans and are hesitant to underwrite new construction. Lending for multifamily and commercial real estate peaked in the third quarter of 2008, and has declined by 25 percent since. While the construction loan market is beginning to improve, banks are requiring significantly more equity from developers than they have in the past. This funding gap provides a significant opportunity for joint venture equity providers. A similar opportunity exists for the renovation and rehabilitation of multifamily communities. While Fannie Mae and Freddie Mac continue to provide attractive permanent debt for property acquisitions, funding the physical improvement of communities remains more complicated. The easiest way for an owner to accomplish a substantial property renovation is to form a joint venture to fund the improvements. Even when apartment construction returns to pre-recession levels, the total inventory of apartments will fall short of demand. At the average pace of apartment construction over the last decade -- about 276,000 units annually -- this demand shortage could require over 10 years to satisfy. Thus it is highly unlikely that the multifamily sector will become overbuilt any time soon. Meeting the demands and desires of millions of new apartment dwellers will continue to provide investors with solid returns on an absolute basis and also in comparison with other property types, now and well into the future.
April | May 2011
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7 Easy Tips for Greening Tenants (& Your Bottom Line) Who’s Working For Who? Keeping Your Management Company On Its Toes Source: GreenPropertyManagement.com
Greening initiatives tend to produce more than just the obvious goal of reducing our impact on the planet. Often, in fact, opting for green actually saves the other kind of green -- money. You might be thinking, “Saving the planet is obviously a good thing, but what does it have to do with property management?” Think of it this way: A property is like a microcosm of the planet. Encouraging tenants to be good environmental stewards will subtly shape their behavior within your property as well -- all while chipping away at your costs. Keep in mind that greening is a learning process for you and your tenants, and there’s certainly no one-size-fits-all approach. A yoga teacher’s advice seems
apropos: “You might feel a stretch, but you should never feel pain.” These 7 tips are easy to adopt and shouldn’t cause any pain: Cool It Sometimes being green is more about using common sense than anything else. Encourage tenants to turn down the thermostat at night. There’s nothing wrong with putting on another sweater or snuggling up in Aunt Betty’s handmade afghan. Better yet, install a digital thermostat that can be programmed once and never thought about again.
Climate Control Windows are wonderful, but left unchecked, they can leave you wide open to heat loss in winter and sauna-like conditions during summer. Challenge tenants to leverage those louvers by closing blinds or shades during hot summer days or cold, dark nights of winter.
Clear the Air While we’re on the subject of furnaces, keep that critical cold-climate system running efficiently by making sure tenants change furnace filters regularly. Or furnish the property with a reusable furnace filter, which can be easily cleaned by vacuuming out or rinsing in water. Trash the Trash Despite the obvious benefit of reducing landfill waste, not everyone has implemented the simple practice of recycling. If your municipality provides free curbside recycling, make it easy for tenants to get on board by supplying a recycling bin, pickup schedule and basic instructions on how to recycle. Recycling lightens everyone’s load, but if you pay for trash pickup, reducing waste via recycling reduces your costs as well. Low Flow to Cash Flow If you pay for water usage, investing in a low-flow shower head or toilet will undoubtedly increase your cash flow. But if you want to get a few more flushes out of an existing toilet, try this trick. Fill a half-gallon plastic bottle with water and place it in the toilet tank. Kick the Paper Habit Most folks are already used to conducting financial transactions online. Why not
eliminate paper from routine processes related to property management by implementing paperless billing and rent payment? It’s cleaner, faster and won’t kill any trees.
Wrap It Up Maybe Aunt Betty’s afghan would be put to better use by wrapping it around the water heater to cut heat loss by almost half. Better yet, for a few dollars you can purchase insulating blankets made precisely for this purpose without running the risk of insulting Aunt Betty. In most cases, being green and making green is really about using common sense. Partnering with tenants to reduce a property’s environmental impact will help to reduce your costs while saving precious resources. Give it a start with the low-hanging fruit and see where your efforts grow from there.
TECHTALK Economic Conditions Push Management Toward ‘the Cloud’ Source: Chris Wood, Multifamily Executive
History is replete with precedents nicely paralleling the recent mass move to cloud computing. One hundred years ago or more, many homeowners who drew water from private wells resisted the switch to a municipal water supply. Decades later, a lot of folks still pooh-poohed the idea of depositing cash in banks. Stashing their savings in a mattress, they said, was a far safer strategy. We’d laugh at these arguments today, just as converts to cloud computing snicker at the idea that once upon a time, organizations invested heavily in their own hardware, software, IT staffs and local networks, when they could have more quickly and affordably drawn applications “right off the cloud.” And that’s not the only thing related to cloud computing that amuses Scott Wiener, senior vice president of IT with Yardi Systems. He also laughs at the notion that cloud computing, which refers to having applications delivered over the Internet as opposed to over a local network, is new.
why they’re embracing cloud computing. “They don’t have to understand the underlying technology to make it work. They just have to know which applications they want to use. They could replicate whatever a cloud provider might have, but they would need a large staff to do that.
designed for property management.
“By taking it off the cloud, they don’t need all that expertise in the office. And there are time savings in knowing they have a predictable system.”
“From property management’s perspective,“ says Brewer, “cloud computing can mean anything from obtaining the software through a software-as-a-service model, offering the benefits of a single code stream and open connectivity to other applications, to the outsourcing of their entire IT infrastructure needs to an expert that can provide superior service, on a scalable basis, at a fraction of the cost of running their own data center.”
Like many who know cloud computing, Wiener has a hard time identifying any downsides to the technology. “In the past, it was about speed, and getting applications that weren’t designed to run on the Internet to run on the Internet,” he says. “But today, we have a lot of bandwidth, so there’s no problem there.” Moreover, cloud computing is ideally suited to property management, where many companies are highly decentralized. It makes perfect sense for all those properties, and all those staff members, to have a single location to access applications, Wiener says. Cloud computing also serves the industry’s need for mobility. And the cloud allows quick and easy access to the many new software applications being expressly
According to Ty Brewer, vice president of operations for RealPage Inc., cloud computing’s open architecture meets the needs of more and more IT-savvy property managers.
If there are any reservations, they may come from those reluctant to relinquish control. “It’s the money-in-the-mattress mentality,” Wiener says. “They don’t want to hand over applications they always controlled to the cloud; they’re worried about who has access, and who can see it. But the industry has such experience working with the cloud; any problems of handling applications over the Internet have been worked out, in terms of security and access.”
“It’s been around a long time,” he says. “It was called ASP or Application Service Provider, and then it was called software-as-a-service. And now it’s called cloud. Why is it only now catching on? The bad economy has made people take a [closer] look at how to achieve greater cost savings.” In fact, one might say if there’s anything really new about cloud computing it’s just that more folks are talking about it. Wiener says he also hears his property management clients remark more and more often: “I’m not a technology expert; I’m a property manager.” That’s precisely
April | May 2011
April | May 2011
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