Page 1

ACCESSLASVEGAS Y O U R A C C E S S T O T H E L A S V E G A S M U LT I F A M I LY H O U S I N G M A R K E T

JANUARY FEBRUARY MARCH 2014

Let The Sun Shine Brightly, Apartment Rents Should Continue To Rise in 2014

IN THIS ISSUE

Nationwide multifamily still growing but Las Vegas remains relatively flat and that trend will continue, as indicators show there is nothing to drive rents any higher

FUTURE FOCUS PAGE 2

Owning apartments in a major U.S. city has had its benefits the past several years and for your clients, renters, it may be time for them to start clearing some space in their monthly budget(s) -- experts expect rents to shoot way up in the coming year. Rents in the United States have been rising every year since 2010, and this trend is expected to continue in 2014. According to USA Today, which reported on data from major research firms that track trends in the apartment rental market, the cost to rent a home will increase between 3.1% and 3.3% in the coming year. This will likely pinch for some renters, who have been forced to shell out more and more cash for their dwellings since the economy began to rebound. For owners, this is continued good news.

8 Threats Apartment Owners Need to Be Aware of in 2014

NATIONAL NEWS PAGE 3

Understanding Today’s Home Buyers and Apartment Renters

MANAGEMENT MINUTE PAGE 7 Managing, and Improving, the Make-Ready Process

MARKETING MOMENT PAGE 8

Apartment Marketing Predictions 2014: The New Breed Speaks

OCCUPANCY CORNER PAGE 10

Las Vegas 2013: Year in Review

ACCESSLASVEGAS

For example, rentals in San Francisco have increased by 43% since 2009, and are expected in go up another 5.1% in 2014. In the South, rents in Austin increased 5.2% in 2013 and are forecast to go up another 3.7% in 2014. In both cities, as well as others nationwide, the reason for rental hikes is the same: demand for rentals is rising and supply remains tight. Still, some major cities may see declines in rental prices. Washington, D.C., for example, is expected to see a 2.5% drop in rents, largely because a construction boom produced more apartments than renters. Las Vegas, meanwhile, can expect a laughable 0.1% increase. Over the past several years their has been nothing indicating Sin City’s rental owners can move rents without as mass exodus of occupants moving right across the street, where things will be more “affordable”. With rental prices on the rise and interest rates on mortgages still low, renters might be thinking it is time to buy. The balance of affordability and owning a home may continue to drive renters into apartments and not homes. This year will be interesting to watch and there will be several geopolitical items which may influence the multifamily markets in one way or another. JANUARY | FEBRUARY | MARCH 2014


ACCESSLASVEGAS

FUTUREFOCUS PAGE 2

Y O U R A C C E S S T O T H E L A S V E G A S M U LT I - F A M I LY H O U S I N G M A R K E T

8 Threats Apartment Owners Need to Be Aware of in 2014 By Les Shaver; Multifamily Executive As the rest of the economy has foundered, apartment owners have surged coming out of the recession. But the good times might not last forever. Here are eight things that could wreck their joyride, in no particular order: 1) Fannie Mae and Freddie Mac It’s been more than five years since the speculation about Fannie Mae and Freddie Mac started, yet they remain a vital source of liquidity in the sector, especially in secondary and tertiary markets (where other lenders are less likely to go). “Fannie and Freddie are the most dominant lending sources in our industry,” says John Sebree, director of Calabasas, Calif.–based Marcus & Millichap’s National Multi-Housing Group. “If that is changed, it will have an effect on our values and our ability to finance properties.” 2) Unemployment The apartment sector has seen great rent growth over the past few years without its customers enjoying real income growth. If the sector wants to continue to grow, employment, and wages, must increase. And, if things regress, the industry will suffer. “You put unemployment and the economy in the macro bucket,” says Dan Fasulo, managing director at New York–based Real Capital Analytics. “They’ll be hovering above everything we do and directly impacting values.” 3) Rising Interest Rates When interest rates rise, they reduce investor-levered returns, which obviously hinders valuations. “The interest-rate market, and how much interest rates increase and over what period of time, will have a huge effect on value,” Sebree says. “If Treasuries jump 100 or 120 basis points, that will have an effect on cap rates.”

4) Overdevelopment Simple supply and demand dictates that when more apartments show up in your neighborhood, it generally decreases the value of those properties that were there already. “Supply is an issue at the submarket and neighborhood levels,” says Ryan Severino, senior economist and associate director of research at New York–based Reis. “It’s not a uniform thing.” But in markets with oversupply, valuations will take a hit. 5) An Exodus of Capital Already, some players, like Washington, D.C.–based Carlyle Group, are trimming their apartment holdings. If the movement gets bigger, it could hurt values. “Capital is moving out,” Fasulo says. “Your smart money players, chasing yield compression in the market, are already playing in the other sectors where there is a bigger spread.” 6) Inflation Inflation will hit apartment owners, but, ultimately, the sector is in a good position to handle higher prices. “If we look at what inflation will do, it will increase rents, but it will increase expenses and interest rates [too],” Sebree says. “It will probably increase values, as well. If inflation happens at a higher rate than what many are predicting, the investors that have locked in long-term debt will be in better shape than others.” 7) Political Threats When Bill de Blasio was elected the next mayor of New York City last month, apartment owners in the city, including Fasulo (who owns units in Brooklyn) took note. “The mayor of New York has a lot of power to impact change very quickly,” Fasulo says. “Understanding the positions of the new mayor-elect, I’m not sure I’d make a bet that operating expenses for New York City apartment owners would be going down.” 8) Geopolitical Issues Apartment industry executives, like everyone else, are susceptible to what happens in the outside world. If gridlock in Washington or recessions in other countries plunge the U.S. into recession, multifamily owners suffer. “One of my greatest concerns that I believe will impact apartment values and fundamentals is uncertainty about global economics and our government policy,” says Lili Dunn, chief investment officer for Greensboro, N.C.–based Bell Partners (though she remains hopeful the economy will remain along its path of moderate growth).

ACCESSLASVEGAS

JANUARY | FEBRUARY | MARCH 2014


ACCESSLASVEGAS

NATIONALNEWS PAGE 3

Y O U R A C C E S S T O T H E L A S V E G A S M U LT I - F A M I LY H O U S I N G M A R K E T

Understanding Today’s Home Buyers and Apartment Renters

strengthening economy (rates tend to rise in recoveries) and to Fed tapering, whenever it comes. The rising cost of homeownership will add insult to injury in America's least affordable markets: in October 2013, for instance, 25% or less of the homes listed for sale in San Francisco, Orange County, Los Angeles, and New York were affordable to middle class households. Nonetheless, buying will remain cheaper than renting. As of September 2013, buying was 35% cheaper than renting nationally, and buying beat renting in all of the 100 largest metros. However, prices and mortgage rates might rise enough to tip the math in favor of renting in a couple of housing markets -- starting with San Jose.

2014 will be the year of the repeat home buyer By Jed Kolko, Trulia The housing market continued its uneven recovery in 2013 and will enter 2014 closer to normal than it was a year earlier. Consumer optimism is climbing back: in Trulia's latest survey, 74% of Americans said that homeownership was part of achieving their personal American Dream - the highest level since January 2010. Even among young adults (18-34 year olds), many of whom struggled through the recession and are still living with their parents, 73% said homeownership was part of achieving their personal American Dream, up from 65% in August 2011. Rising prices over the past two years have been great news for homeowners, especially for those who had been underwater, and the real estate industry has benefited from both higher prices and more sales volume. At the same time, the effects of the recession and housing bust still sting: the barriers to homeownership remain high, and a few markets mostly in Las Vegas and Florida - still have a foreclosure overhang. Plus, the housing recovery itself brings its own challenges, including declining affordability and localized bubble worries, especially in southern California. Barring any economic crises, the housing market should continue to normalize. Here are 5 ways that the 2014 housing market will be different from 2013: 1) Housing Affordability Worsens. Buying a home will be more expensive in 2014 than in 2013. Although home-price increases should slow from this year's unsustainably fast pace (see #4, below), prices will still rise faster than both incomes and rents. Also, mortgage rates will be higher in 2014 than in 2013, thanks both to the

2) The Home-Buying Process Gets Less Frenzied. Home buyers in 2014 might kick themselves for not buying in 2013 or 2012, when mortgage rates and prices were lower, but they'll take some comfort in the fact that the process won't be as frenzied. There will be more inventory on the market next year, partly due to new construction, but primarily because higher prices will encourage more homeowners to sell - including those who are no longer underwater. Also, buyers looking for a home for themselves will face less competition from investors who are scaling back their home purchases (see #3, below). Finally, mortgages should be easier to get because higher rates have slashed refinancing activity and pushed some banks to ramp up their purchase lending. Moreover, the new mortgage rules coming into effect in 2014 will give banks better clarity about the legal and financial risks they face with different types of mortgages, hopefully making them more willing to lend. All in all, more inventory, less competition from investors, and more mortgage credit should all

What Other Reasons Will Cause 2014 To Be Different? New Local Markets Will Take the Spotlight. Trulia’s top 10 markets to watch for the single and multifamily sectors are entering 2014 with strong fundamentals, including recent job growth and longer-term economic success, as well as recent construction activity typical of vibrant markets. They are, in alphabetical order: • • • • • • • • • •

Bethesda-Rockville-Frederick, MD Charlotte, NC-SC Denver, CO Fort Worth, TX Nashville, TN Oklahoma City, OK Raleigh, NC Salt Lake City, UT Seattle, WA Tulsa, OK

Downtown Denver, CO

Why are so many of the high-profile markets of 2013 missing from our list? We ruled out markets that were more than a little overvalued according to our latest Bubble Watch, which eliminated most metros in Texas and coastal California. We also struck markets with a large foreclosure inventory (thanks for the data, RealtyTrac), like most of Florida. Our 10 markets to watch, therefore, should have strong activity in 2014 with few headwinds.

ACCESSLASVEGAS

JANUARY | FEBRUARY | MARCH 2014


ACCESSLASVEGAS

NATIONALNEWS 2011 m. vasario 28 d.,pirmadienis PAGE 4

Y O U R A C C E S S T O T H E L A S V E G A S M U LT I - F A M I LY H O U S I N G M A R K E T

Quisque auctor erat vel nunc ultricies

make the buying process less frenzied than in 2013 - for those who can afford to buy.

underwater would be better off with a year or two of unsustainably fast price gains.

3) Repeat Buyers Take Center Stage. 2013 was the year of the investor, but 2014 will be the year of the repeat home buyer. Investors buy less as prices rise: higher prices mean that the return on investment falls, and there's less room for future price appreciation. Who will fill the gap? Not firsttime buyers: saving for a down payment and having a stable job remain significant burdens, and declining affordability is also a big hurdle for first-timers. Who's left? Repeat buyers: they're less discouraged by rising prices than either investors or first-time buyers because the home they already own has also risen in value. Also, the down payment is less of a challenge for repeat buyers if they have equity in their current home.

5) Rental Action Swings Back Toward Urban Apartments. Throughout the recession and recovery, investors bought homes and rented them out, sometimes to people who lost another (or the same!) home to foreclosure. In fact, the number of rented single-family homes leapt by 32% during this period. Going into 2014, though, investors are buying fewer single-family homes; loosening credit standards might allow more single-family renters to become owners again; and fewer owners are losing homes to foreclosures to begin with - all of which mean that the single-family rental market should cool. At the same time, multifamily accounts for an unusually high share of new construction, which means more urban apartment rentals should come onto the market in 2014. Urban apartments will be the first stop for many of the young adults who find jobs and move out of their parents' homes. In short, 2014 should mean more supply and demand for urban apartment rentals, but slowing supply and demand for single-family rentals. Ironically, economic recovery means that the overall homeownership rate will probably decline, as some young adults form their own households as renters. Still, the shift in rental activity from suburban single-family to urban apartments would be yet another sign of housing recovery.

4) How Much Prices Slow Matters Less Than Why And Where. Prices won't rise as much in 2014 as in 2013. The latest Trulia Price Monitor showed us that asking home prices rose year-over-year 12.1% nationally and more than 20% in 10 of the 100 largest metros. But it also revealed that these price gains are already slowing sharply in the hottest metros. How much prices slow matters less than why. If prices are slowing for the right reasons, great: growing inventory, fading investor activity, and rising mortgage rates are all natural price-slowing changes to expect at this stage of the recovery. But prices could slow for unhealthy reasons, too: if we have another government shutdown or more debt-ceiling brinksmanship, a drop in consumer confidence could hurt housing demand and home prices. Where prices change matters, too. Slowing prices are welcome news in overvalued or unaffordable markets, but markets where prices are significantly undervalued and borrowers are still The Icon at Ross (Dallas, Texas)

San Francisco will push rents by about 4.7 percent next year, according to the MPF. The Bay Area's job growth market continues to improve, as the unemployment rate dropped from 6.9 percent in July to 6.1 percent in September, according to the Bureau of Labor Statistics. Meanwhile Texas markets Austin, Dallas and Houston are each showing strong fundamentals heading into the new year. Job growth in all three markets will give the boost they need to push rents by about 3.9 percent next year. While some people may fear Austin is seeing too much development, most mangers aren't worried about it. As far as Dallas and Houston, both markets are seeing rapid development, and are among the hottest secondary markets in the nation. Seattle, Washington

Projected Top 10 Rent Growth Markets of 2014 By Lindsay Machak; Multifamily Executive Industry experts project that some of the largest metro areas will see some of the largest rent growth next year. Yet some hot secondary metros, such as Denver and Nashville, are also among the top markets for 2014. Seattle will continue to grow in 2014 and is expected to see the biggest percent change in rents, according to New York-based Reis.

ACCESSLASVEGAS

One Park Place (Houston, Texas)

The Top 10 Rent Growth Markets for 2014: 1. Seattle 5.8 2. San Francisco 4.7 3. Denver 4.6 4. San Jose 4.5 5. Nashville 4.0 6. San Diego 4.0 7. Austin 3.9 8. Dallas 3.9 9. Houston 3.9 10. New York 3.8 JANUARY | FEBRUARY | MARCH 2014


NATIONALNEWS PAGE 5

ACCESSLASVEGAS

Y O U R A C C E S S T O T H E L A S V E G A S M U LT I - F A M I LY H O U S I N G M A R K E T

New Report Hints At Slowing Apartment Development Activity In 2014 By Bryan Ives; AppFolio Dallas-based industry research firm, Axiometrics, has released its latest housing market predictions, and the news bodes well for property managers in certain multi-housing markets tracking the rise in inventory. The study suggests that starting next year, “the development of new apartments will slow until investors and developers see new supply absorbed and market conditions recalibrated.” Jim Costello, managing director of America research for CBRE echoed those findings during the company’s Multi-Housing Summit Florida in Miami last month. “We see a little more construction in 2014, but that’s the peak,” he said. A Number of Things at Play The projected slowdown is attributed to a number of factors, like rising labor and construction costs as well as easing of class A rental growth, diminishing the likelihood that some planned projects will move forward since they are no longer justified at current rent levels.

units), Atlanta (7,556 units), and Orlando (7,032 units) rounding out the balance. While urban infill locations currently make up the most of these, dwindling opportunities are mitigating the possibility of overdevelopment in the urban core as construction activity moves into the suburbs and around outer employment nodes of some MSAs. According to US Census data cited by Axiometrics, annual multifamily nationwide permits dropped 15.7% to 268,000 in August as compared to July, down 3.9% year over year while at the same time, single family permits saw respective increases of 3% (627,000 units) and 20%. “In the next five years, I still think it is going to be a tight market,” Costello said, noting that multi-family housing also does well in inflationary times. He expects the national vacancy rate to stabilize around 5.2 percent. Rent Growth Moderates in Third Quarter The Axiometrics report goes on to say that annual effective rent growth moderated slightly in the third quarter at 3.2% compared to year over year growth of 3.7%. That figure has been steadily decelerating over the last nine consecutive quarters from a peak of 5.3% in July 2011 but is still better than the long-term average of 2.1% with 23 of the top 88 MSAs reporting annual effective rent growth of more than 4%. The company is predicting that developers will remain cautious about new projects in some of the most active markets like Washington, DC; Raleigh, NC; and Austin, TX “until the current wave of new construction is absorbed and revenue growth appears stable or growing.” All in all, the easing development activity and current absorption rates provide a promising outlook as leading indicators on the supply side, while close attention will continue to be paid on market-specific demand by MSA.

Supply Varies by Market Analysts are concerned that certain Metropolitan Statistical Areas (MSAs) are at risk of becoming oversupplied if demand and job growth are unable to keep up with the new inventory. According to the Axiometrics forecast, 180,723 units are scheduled for delivery across 192 MSAs in 2013 — a 109% increase over the previous year’s total of 86,554. The top ten MSAs for multi-family permitting account for more than half of all new inventory, 56% or 101,569 units. New York City leads with 19,718 units, followed by Houston (13,515 units), Austin (11,672 units), and Dallas (9,502 units). Together, the three Texas cities make up a full one-third, 34%, of the total with Los Angeles (8,599 units), Seattle (8,264 units), Denver (7,975 units), Washington, DC (7,736 ACCESSLASVEGAS

JANUARY | FEBRUARY | MARCH 2014


ACCESSLASVEGAS

LOCALEFFECTS PAGE 6

Y O U R A C C E S S T O T H E L A S V E G A S M U LT I - F A M I LY H O U S I N G M A R K E T

Praedium Group Strip Growth Acquires South Blvd. Spurt? Juno Plans Fall Opening for Apartments The $41.9 million purchase of the property from Nevada Bazaar-Flavored West Development marks the company’s first acquisition through its newest investment vehicle Retail Project By Joshua Ayers; Multi-Housing News (MHN Online)

New York-based Praedium Group has acquired South Blvd. Apartments, a 320-unit Class A community located in Las Vegas. The $41.9 million purchase of the property from Nevada West Development marks the company’s first acquisition through its newest investment vehicle. “South Blvd. Apartments is one of the highest quality multifamily assets in a market that is in the early stages of a recovery,” says Asim Hamid, vice president of The Praedium Group. “We were able to acquire the property at an attractive price after a protracted sales process during which two previous buyers failed to close.” The property, which is currently 93 percent leased, is located at 10200 Giles Street in Las Vegas, about seven miles south of McCarran International Airport and a 10 minute drive to the Las Vegas Strip. “Las Vegas has struggled since the downturn, but recently there has been a resurgence of job creation in the area,” Hamid says. “We found the supply/demand fundamentals in this market appealing and studies are projecting above average rent growth over the next several years, making it a prime area for investment.” South Blvd. Apartments was completed in 2012 and is comprised of 29, two-story buildings with an assortment of large floor-plan offerings. Residences feature nine-foot high ceilings, granite countertops, stainless steel appliances and in-unit washers and dryers. Amenities include a clubhouse and fitness center, as well as a swimming pool, a courtyard with barbecue areas, a movie theater with stadium seating, and gated garage parking. The community is located within close proximity to the nearly completed interchange at Interstate 15 and Cactus Boulevard.

ACCESSLASVEGAS

By Alex Girda; Multi-Housing News (MHN Online) With office investment and leasing showing new life and the residential market enjoying its strongest year since the recession, innovative projects are likewise infusing new energy into Las Vegas’ retail scene. One of the largest of those projects, the Grand Bazaar Shops, is betting on a vibrant new concept that will be located at the entrance to Bally’s Las Vegas. Group, Perella Weinberg Partners, Glincher Capital Group and Caesars Entertainment, the 55,000-square-foot project will accommodate about 150 shops when it opens next fall. Most stores will range in size from 150 to 300 square feet; a few larger venues will offer spaces in the 1500- to 2000-square-foot range. The lineup of retailers will emphasize lifestyle products like apparel, footwear, eyewear, health and beauty, electronics and entertainment. Located on a heavily traveled two-acre site at the intersection of Flamingo Road and Las Vegas Boulevard, Grand Bazaar Shops will count Caesars Palace, Flamingo Las Vegas and Paris Las Vegas among its neighbors. According to its developer, the retail center will rely on the appeal of smaller, more interactive shops, as well as its bold and colorful design features, in order to attract as many of the 20 million visitors that cross the area every year. International marketplaces inspired Juno Property Group Chairman Larry Siegel to create the concept, which will evoke traditional sights, sounds and smells of bazaars around the world. Signature design elements include a Swarovski Crystal Starburst and rooftop mosaic-like rooftop drawings.

JANUARY | FEBRUARY | MARCH 2014


MANAGEMENTMINUTE PAGE 7

ACCESSLASVEGAS

Y O U R A C C E S S T O T H E L A S V E G A S M U LT I - F A M I LY H O U S I N G M A R K E T

Managing, and Improving, the Make-Ready Process

if any, during the duration of the lease will cut down on future damages and turnover time. This is especially the case with student housing, Daly added, in which damage isn't just a vague possibility but something to be expected.

By Linsey Isaacs; Multifamily Executive

This system of preventative maintenance is flanked by a well-trained staff, above all. From leasing agents to maintenance teams, having everyone knowledgeable about the goal can help ease turnover work.

Managing a three-day turnover on a unit still holds strong as an industry-wide standard. But when it comes to ensuring quick turnovers across an entire community, the human element has to be every bit as diligent and precise as the revenue management  software and other technology used during the process. Some of the most successful ways to pick up every dollar off the table are using old-school methods to manage expirations, and essentially, good planning, in conjunction with property management and other types of software.

“When you endure a turn, minor issues will snag up the system,” Daly said. “Preventative maintenance is key. Don’t have units in terrible condition when they move out.” Incentivize Staff for Swiftness

One very effective way of doing that is by offering incentives based on the timing of make-ready days. “Leasing agents have bonuses or they share the renewal bonus,” said Kimberlee Schreiber, vice president at Marlton, N.J.-based Interstate Realty Management. “We incentivize the maintenance staff and there’s a goal for number of make-ready days. If they beat that, there are earnings potential.”

“Lease expiration management is the clear strategy to make sure there’s minimal downtime between each unit so you don’t have a bulk of apartments at the same time to turnover,” Peggy Daly, senior vice president at Dallas-based Behringer Harvard said at this year’s Mutlifamily Executive Conference. “[But] you can’t just turn it on. It still involves you managing the process.” All panelists agreed that using boards and charts in addition to electronic methods can be helpful. The easy visual can allow leasing agents to glance and recognize quickly what number of leases they should be doing, and what their capture rate on renewals are. Revenue management software has a tendency to keep things in check with what’s going in the market and can effectively knock you out of the cycle if you take a myopic view. “Remember that there still should be a human component to it,” said Christopher Hilbert, president of real estate operations, Irvine, Calif.-based Steadfast Companies. “Ensure that we don’t have unintended consequences by the decisions we make.” Walk-Throughs Are Key That human component extends to the intricate planning of the individual units before beginning turnover work, starting with a walk-through of the unit once a notice to vacate exists. Knowing what you’re walking into before you hand over the keys to the maintenance or renovation staff is important will give you a handle on the scope, cost, and critically, the timing of the make-ready process.

When everyone’s bonus is tied together, it’s understood that all employees must work together, thus having the reward put in place. “We’ve found a lot of good effect by offering this incentive,” she added. “You’re not losing money when compared to vacancy.” Some other tips include having leases expire on a Monday, so managers can pick up a few extra days of revenue. The reason Monday is so appealing is that most tenants will move out over the weekend or even a bit before, leaving time to schedule maintenance over the weekend while they're still paying rent for those extra days.

"If you do your pre-inspections before they move out, you can figure out what you need,” said Greg Lozinak, COO at Chicago-based Waterton Residential. “Service team can be out renovating [multiple] units without going back to the shop. It’s a big time saver.”

And for portfolios that come in at special times of the year, like military and student housing sectors, it’s difficult to get all apartments ready in time. Taking ideas from the hotel sector, you can have tenants who are waiting to move into their unit placed in a furnished unit until further notice.

Managers should be checking in on the state of an apartment throughout the year, prior to the notice. Billing tenants for damages,

“You pay rent on that unit, and have the belongings delivered later,” Schreiber said.

ACCESSLASVEGAS

JANUARY | FEBRUARY | MARCH 2014


ACCESSLASVEGAS

MARKETINGMOMENT PAGE 8

Y O U R A C C E S S T O T H E L A S V E G A S M U LT I - F A M I LY H O U S I N G M A R K E T

Apartment Marketing Predictions 2014: The New Breed Speaks They will revolutionize how we search and lease apartments. Social media proves to be ineffective. There will be more fallout from apartment marketers about using social media to market, not because it isn’t effective at generating leads, or that it doesn’t scale, but because there are no good copy and paste, “easy solutions,” to social media marketing.

By Duncan Alney; Firebelly Mark Juleen, VP Marketing, J.C. Hart The website Apartment Ratings will continue to gain ground on the traditional ILS.  If they can come up with a solid mobile plan they could overtake all of them, in my opinion. This will be the year for Google +. I’ve been bullish since day one, but for marketers we may see a shift away from Facebook, or other platforms, and more effort over on G+. Sarah Greenough, VP, Princeton Properties  Mobile usage continues to climb with smart phones and tablets flooding the market. This trend will continue in 2014. We currently have over 25% of our web traffic coming from mobile. Just two years ago, it was only 3-5%! In 2014, our focus will be on improving our mobile exposure. Social media for marketing and customer service will continue to grow. Residents use social sites, such as Facebook, to become part of a “virtual community” at their apartment buildings. Residents use these venues to contact management with questions and concerns. This source of communication will ACCESSLASVEGAS

continue to grow; we embrace this way of doing business. It allows us to be where our customer is and provide quick and friendly answers. Jonathan Saar, VP of Marketing & Educational Solutions, Training Factor  Content will continue to rule. However, the trend towards shorter posts for the benefit of the reader will make more headway. Marketers will be more apt to include more images and short videos to their content strategy. Mike Brewer, Vice President, Mills Properties  My two predictions can be summed up in two words: “respite” and “enrichment.”

ways to truly enrich people’s lives. This is the year we look beyond the concept of “adding value.” We are going to find ways to understand people’s core values and create experiences that touch them deeply. Erica Campbell Byrum, Director of Social Media at Dominion Homes Media Google Carousel will expand into real estate and rentals. Today Google Carousel only covers travel, hospitality, and restaurant queries, but I have a feeling Google will expand their categories into real estate and rentals, which would be an awesome opportunity for our industry to gain that top placement across the carousel.

Messaging that truly speaks to people. People are flat out exhausted and their capacity to focus is all but depleted. I think 2014 marketing themes will start to incorporate words like rest, refuge, and respite. We will need to think about creating environments and messages that speak to people’s innate need to pause, reflect, and be mindful about their lives. This will build toward my second prediction …

Staffing for social media truly arrives. PMC’s will begin to realize that social media is essential to the marketing and leasing mix and they will start to hire full time social media managers that work onsite alongside the leasing and maintenance teams to handle the daily social media strategy and reputation management.

The word “enrichment” will find itself front and center in our messaging. The really successful operators will find

The crowd economy is here. Airbnb will add apartment search to their arsenal and turn the typical ILS on its head.

Eric Brown, CEO, Urbane Apartments

Content Marketing/Brand Journalism is the new way. This is the new way to advertise and market and will dominate most other businesses marketing and outreach plans, yet few apartment marketers will do it successfully, if at all. Apartment marketers will struggle to think and act like a “publisher,” and likely will be very slow to tell good brand stories. Duncan Alney, CEO Firebelly Marketing Social business is here. Social communications are here for a variety of uses. Marketing uses it for acquisition and retention. But clever brands are already using it for creating an entirely new customer experience and recruiting employees. We’ll see the emergence of truly social brands. Gimmicky buzzword-based marketing dies. Okay, it won’t. But I wish it did. The phrase du jour approach will be replaced with the winning combination of understanding the stories and vision of consumer centered experiences. But it will begin with visionary marketers seeing how it all comes together and embedding that secret ingredient into it all -- the power of word of mouth – whether it’s online or offline. 2014 is going to be a roller coaster. JANUARY | FEBRUARY | MARCH 2014


TECHTALK PAGE 9

What Your Residents Say, and Want, When It Comes Tech-Savvy Communities By: Multi-Housing News and Kingsley Associates Are your apartment communities tech-savvy? Many residents expect their apartments to meet their various technology requirements, whether it be communication with management through social media, being able to choose their cable provider online, or having Wi-Fi access in common areas.

ACCESSLASVEGAS

Y O U R A C C E S S T O T H E L A S V E G A S M U LT I - F A M I LY H O U S I N G M A R K E T

❝The resident portal could be more efficient if it allowed for payments on the rental units to be paid partially, rather than all or nothing. This would drastically help those that have roommates and travel a lot, allowing for an easier transaction between the tenants. ❞ — Charlotte, N.C. ❝I don’t care about social networking sites -- it’s the community’s website that matters to me. ❞ — Washington, D.C. ❝My apartment has horrible cell phone reception. In the day and age where folks are using their cell phones more, this is a huge problem for me. I have to stand in one or two spots of my apartment just to send a text or receive a phone call. ❞ — Alexendria, Va. ❝The business center Internet and printer seems to be out of service a large percentage of the time. ❞ — Jersey City, N.J. ❝The ability to pay rent online would be fantastic! ❞ — Baltimore, MD

This month, MHN teamed up with research and consulting services firm Kingsley Associates to ask residents about the technology in their apartment communities -- and what they think is lacking.

❝I’m disappointed in the limited availability of technology due to the building’s contractual obligations. It’s difficult to leverage a connected lifestyle. ❞ — Chicago, Ill.

❝New tenants should be advised that depending on the location of their unit they may not be able to get the cable provider of their choice. ❞ — Birmingham, Ala.

❝When I’ve communicated with the management team over Facebook, if it’s something complimentary they were very happy. But if had a concern, then the apartment manager would immediately ask me to stop using Facebook saying that Facebook is only for publicity. ❞ — Woburn, Mass.

❝Look into an online management system for the washer and dryers so that people can be notified when their laundry is done. ❞ — Charlotte, N.C. ❝I especially like the front office’s use of Facebook and email to keep residents updated on what’s going on in the community (for example, power outages).❞ — Middletown, Conn. ❝Setting up cable and Internet service prior to moving in would be helpful. I had to wait over two weeks to get set up. ❞ — Pasadena, Calif.

❝The Internet does not meet my expectations and makes it incredibly difficult to work from home or have video chats with family in other states. ❞ — S. Orange, N.J. ❝I do not like having limited options for cable and Internet service. ❞ —Jacksonville, Fla. ❝If they could get the cable hooked up in the gym that would be great. ❞ — San Mateo, Calif.

❝Community WiFi access would be a really nice feature. ❞ — Miami, Fla. ❝I’m very upset about my phone and Internet connection. It was never communicated to me that this complex has no reception, and now I have to incur huge expenses because of it. ❞ — Melrose, Mass. ACCESSLASVEGAS

❝Can we get a Facebook page set up for the community? A previous community I lived at had a Facebook page and it was really useful for the residents to learn about community news and get to know each other. ❞ — Atlanta, Ga. ❝I do wish management could provide wireless Internet throughout the building. I would be glad to pay $10-20 more per month for this service.❞ — Dallas, Tx. JANUARY | FEBRUARY | MARCH 2014


ACCESSLASVEGAS

OCCUPANCYCORNER PAGE 10

Y O U R A C C E S S T O T H E L A S V E G A S M U LT I - F A M I LY H O U S I N G M A R K E T

Las Vegas: 2013 Year in Review

Gamblin' Hall & Saloon, the construction industry shed in 2013. Trade, transportation and utilities hiring provided an outsized lift to the local economy, while government head counts received a boost as 4,700 positions were added, a 5% surge. Meanwhile, educational and health services employment expanded by 2,800 workers or 3.7%.

By: Hendricks-Berkadia; ApartmentUpdate.com Las Vegas employment levels continued to grow at a healthy pace in 2013. Local businesses added 13,700 new positions in the past 12 months, expansion of 1.6%. Job creation last year was down from the 2.5% expansion recorded during 2012, due to layoffs in the construction industry. Despite several high-profile construction projects like the MGM Resorts International expansion, The Genting Group's Resort World Las Vegas and Caesars Entertainment's redevelopment of Bill's

QUICK FACTS

- Following negative net absorption of 680 units in 2012, robust hiring caused a marked reversal in absorption. In the most recent 12-month period, occupied stock increased by 2,110 apartment units. - Despite the firming economy, developers have been slow to expand inventory. In 2013, supply growth registered 430 new units, compared to the average of 5,050 units per year over the past decade. Builders completed 880 units in 2012. - Multifamily permit issuance fell to 1,000 units last year compared to issuance of 1,270 units in 2012. The 438-unit development in the North submarket is tentatively slated for early 2015 completion. - Payroll growth and limited new inventory are keeping downward pressure on vacancy. During the previous four quarters, marketwide vacancy plunged 80 basis points to 8%.  - Firming operations are allowing owners to ratchet up asking rents. Average asking rents advanced 1.1% to $830 per month during 2013.   Concessions fell measurably during the same period, reaching 4.7% of asking rent in the fourth quarter.

Las Vegas Metro Occupancy Results December 2012 through November 2013 December 2012

90.01%

January 2013

90.17%

February

90.28%

March

90.83%

April

91.10%

May

91.05%

June

90.78%

July

91.07%

August

91.28%

September

91.19%

October

90.78%

November

90.73%

89%

90%

91%

92%

2013 Occupancy Average: 90.84% Source: Spencer Ballif and Jeff Swinger of CB Richard Ellis (Las Vegas) (119,357 Apartments Surveyed in November 2013) ACCESSLASVEGAS

JANUARY | FEBRUARY | MARCH 2014


ACCESSLASVEGAS

MARKETACCESS PAGE 11

Y O U R A C C E S S T O T H E L A S V E G A S M U LT I - F A M I LY H O U S I N G M A R K E T

Las Vegas Multifamily Access 2014 Forecast for Las Vegas Source: ApartmentUpdate.com VACANCY & RENT

PERMITS & CONSTRUCTION

EMPLOYMENT GROWTH

FORECAST Investment demand is ramping up in Las Vegas, as prospective owners are entering the market via both construction of new properties and acquisition. Deal flow accelerated markedly in 2013 and the pace of sales is expected to remain brisk. Buyers are particularly bullish on the metro's larger apartment assets, focusing on properties with 200 units or more. In this segment, while cap rates are an important factor for prospective buyers, investors are giving extra consideration to improvements in economic drivers within the submarket, rent growth potential and the construction pipeline in the surrounding area. Consequently, cap rate trends have varied measurably throughout the metro. In the development arena, while there was a lull in construction output since mid-2013, deliveries will accelerate starting in the second half of this year, culminating with as many as 1,150 new units in 2015. The planning activity is particularly robust in the Spring Valley area and the Henderson/ Southeast and North submarkets. While owners in a number of submarkets will be cautiously monitoring the construction pipeline, resilient hiring will keep downward pressure on vacancy. Metrowide vacancy is predicted to fall 180 basis points over the two-year forecast period, as hiring efforts accelerate. Payrolls are on pace to expand by 21,400 positions, or 2.5%, this year. Job creation will push to 3.1% in 2015, with the expansion of 26,900 personnel. In addition to vacancy improvements, operators are expected to realize even greater rent gains, while narrowing concessions. By the end of this year, concessions are predicted to fall to 3.4% percent of asking rents.Â

HIGHLIGHTS - Positive net absorption of 1,760 units is expected metrowide over the next four quarters in the Las Vegas metro. Leasing activity is anticipated to rise to 3,680 units during the following year. - Bolstered by the firming economy, developers will augment their construction efforts. In 2014, 500 market-rate rentals are predicted to come online before year-end. Supply will expand by 1,150 apartments in the following year as projects progress from planning to under way. - Multifamily permitting activity, an indicator of future inventory growth, will accelerate 51% to 1,520 units this year. In 2015, permit issuance is predicted to taper to 1,200 units. Although not all projects will come online, there are nearly 3,100 rental units in the various stages of planning in Las Vegas. - Operators will record a 60-basis-point reduction in vacancy over the coming year, with the rate falling to 7.4% by December. Subsequently, vacancy will recede 120 basis points year over year to 6.2% in 2015. - Asking rents are projected to rise 2.7% to $852 per month in 2014, followed by a 3.6% gain to $883 per month next year. By the end of the forecast period,

concessions will fall to just 2.7% of asking rents.

ACCESSLASVEGAS

JANUARY | FEBRUARY | MARCH 2014


ACCESSLASVEGAS 4496 South Pecos Road Las Vegas, Nevada 89121 702.699.9261

ACCESSLASVEGAS

Y O U R A C C E S S T O T H E L A S V E G A S M U LT I - F A M I LY H O U S I N G M A R K E T

Advanced Management Group Awarded Property Management Company of the Year

The Nevada State Apartment Association held its annual Jewel Awards on December 7th in Las Vegas and December 14th in Reno. Advanced Management Group (AMG) was selected as the 2013 Property Management Company of the Year. AMG was the only PMC selected for the prestigious honor in the entire state of Nevada. Additional nominees were Mark-Taylor Residential and Pinnacle. This is the first time AMG has won the award. AMG had previously been selected as one of the Top 10 Companies to Work for in Nevada for 2010 and 2012.

For information, article consideration and featured columns ACCESSLASVEGAS can be contacted at 702.699.9261. The publisher of this newsletter is:

WWW.S OME B OD YMA R K E T I N G .COM

ACCESSLASVEGAS

JANUARY | FEBRUARY | MARCH 2014

January-Febuary-March-2014  
Read more
Read more
Similar to
Popular now
Just for you