ACCESS LASVEGAS EXTERIOR RENDITION OF ECHELON - PROJECT CURRENTLY ON HOLD
DECEMBER 2008 | JANUARY 2009
YOUR ACCESS TO THE LAS VEGAS MULTI-FAMILY HOUSING MARKET
Another Big Disappointment, Echelon Resort Likely Delayed ThroughÂ 2009 Boyd Gaming, which hoped to resume work on its stalled Echelon resort on the Strip next year, says the deteriorating economy will likely delay those plans through the end of 2009. Boyd halted construction on Echelon August 1 after joint venture partners weren't able to secure financing for two key hotels and a mall on the site. During a conference call to discuss the worst quarterly declines in company history, Boyd executives said the company will explore alternatives in the coming year, including the possibility of building Echelon on a smaller scale, developing the project in phases rather than all at once as originally planned and securing additional business partners. "We remain committed to having a meaningful presence on the Las Vegas Strip," Boyd Gaming Chief Executive Ketih Smith said. The company has dissolved its deal with mall
developer General Growth Properties, which is selling its resort malls in Las Vegas amid the economic downturn. The company has modified a development agreement with boutique hotel operator Morgans Hotel Group that could be resumed once the economy improves. Boyd executives said the company has enough cash to weather the downturn and is doing its best to reduce debt, including the purchase of more than $100 million in company bonds. "We're one of the few gaming companies to have a strong balance sheet during these turbulent economic times," Smith said, adding that the company remains in compliance with debt limits and other terms imposed by its bank lenders. "It appears the bottom has really fallen out in the locals market after almost two years of weakness," Morgan Stanley stock analyst Celeste Mellet Brown said in a recent research note.
ACCESSLASVEGAS December 2008 | January 2009
SIN CITY MULTI-FAMILY OUTLOOK: Las Vegas Could Be Sure Bet For Savvy Players Over Next Few Years Long term environment for multi-family properties will be increasingly positive, due to an expected housing shortage and corresponding surge in demand Source: Sule Aygoren Carranza, GlobeSt.com
Could the apartment market in Sin City, one of the biggest epicenters of the housing boom and subsequent decline, be on its way to recovery? According to a report being unveiled this week by the Bentley Group, data for the third quarter 2008 shows an improvement over the performance of prior quarters. For one, the performance index -- which analyzes rents in relation to occupancy -- for apartment properties in the market has risen from $826 in Q2 to $834, which is the greatest improvement it’s seen since mid-2006, when the shadow market started to make its presence felt. Meanwhile, average rents alone -- which has been hovering in the $888 to the $889 range in the past year -- bumped up to $890. Although that uptick is slight, it’s a telling sign that the market is on its way to recovery at a time when most others are seeing their rents decline, according to Christopher D. Bentley, president and broker of record for the firm’s multi-family and hospitality division.
was the shadow market," says Bentley. "It was putting quite a bit of pressure on the apartment market, which should have improved during the bubble much more than it did. Now, the investors are giving the shadow inventory back through foreclosures and sales. Though that’s a negative for single-family housing, it’s a positive for the multi-family market because we’re gaining back that renter inventory. So what was a negative a few years ago for us is now a positive."
“... the investors are giving the shadow inventory back through foreclosures and sales. Though that’s a negative for single-family housing, it’s a positive for the multi-family market ...” - CHRISTOPHER D. BENTLEY PRESIDENT OF THE BENTLEY GROUP
Also of note is the fact that this improvement is occurring in the face of significant job losses. Bentley points out that the market has lost about 12,000 jobs to date, and so far, occupancy has followed suit. This is the first time occupancy has risen despite the decline in employment.
Concurrently, occupancy across the Valley for the three-month period between July and September rose for the third consecutive quarter to 93.7%, up 80 basis points from June and 20 from the same period last year. The multi-family sector is beginning to pull tenants away from the shadow market, where rents are averaging about $200 more per month than traditional apartments. There’s also the risk of having to move out of shadow residences in the event of a foreclosure. "Over the last few years, our biggest competition 2
The market isn’t completely rosy, though; Bentley concedes that landlords are offering concessions. The good news is that those incentives are more commonplace in the class C product, rather than class A or B. "New lease-ups are fantastic in the A market," he says. "For both traditional renters and those who sold their homes at the right time, going down to a C-type product is too much of a jump. We’re seeing more demand for the A product." For investors looking for deals in the market today, they are few and far between. According to Bentley, "there are a lot of distressed property funds that are not getting the rewards they’re looking for because apartments are simply not in distress." Over the long term, however, the environment for multi-family properties will be increasingly positive, he says, due to an expected housing shortage and corresponding surge in demand. The executive maintains that the supply of residential units in the
next several years will ultimately not be able to keep up with the demand for them. "We are convinced there’s a housing shortage coming," he explains. Construction funds for apartment buildings, along with single-family homes, are not available. Projects in the pipeline that were commenced before the downturn hit will be completed, but very few planned projects that haven’t yet broken ground will do so. Once the demand rises, Bentley adds, the climate will ease a bit and developers will begin construction once again. "It’s the period between the stagnancy and the return on new development that is going to create the shortage of space," he says. "We still have jobs coming in, we still have occupancy growth and hotels are opening up. There is a fear factor that the recession will carry on a little longer than anticipated and have an impact on Vegas tourism. But it’s important to remember that the casino market here is dependent on occupancy, not rates. Hotel and casino operators will lower rates to get people in the door. For our purposes, it’s absolutely irrelevant how much the room goes for -- if it’s $200 or $500 a night, it still takes two people to make the beds. While we wish the forecast were different, at the end of the day, the jobs are still going to be there." It’s anticipated that the market will gain about 3,500 residential units by 2010, which at this pace is a shortage of about 13,000 units compared to demand. These conditions are creating a climate that is very friendly to investors. The average price per unit in the Valley hit $120,000 per door in 2007, with a peak of $164,773. Current prices are significantly less, so the sector is more affordable. Add to that the fact that rents remain significantly lower than most of markets across the country. The upside opportunity is enticing, says Bentley.
end of 2009. "We forecast 2010 to see a significant performance increase, and that will last for a good three years," he predicts. Rent growth during that is expected at around 6%, a rate seen only in 2006 year, and occupancy is anticipated to rise to the 95% to 96% range. "It will be another two to three years before the single-family market picks up again, and the apartment sector will flourish until that time."
Emerging Trend Report Rates Apartments as Best Investment Opportunity in ‘09 Source: Rachel Z. Azoff, DeveloperOnline.com
Real estate experts expect financial and real estate markets to bottom in 2009 and then falter for much of 2010, with continued drops in property values and additional foreclosures and delinquencies, according to the 2009 Emerging Trends in Real Estate report, released this week by the Urban Land Institute and PricewaterhouseCoopers.
As investors look to reap the cash from their holdings, sales velocity should pick up next year, he states. "That’s something that we saw in 2002," he points out. "Velocity was down considerably after 9/11, and our short recession here, and it jumped back up significantly in 2003."
But there are a few bright spots in this rather gloomy forecast. At the top of the list: Apartments are the best opportunity investment next year, according to the report, which includes interviews and survey responses from more than 600 leading real estate experts, developers, lenders, brokers, and consultants.
Anyone who comes into the market, however, should be ready to exhibit some patience. Next year will not be a great year, says Bentley, since most of job growth that is expected will occur at the
“Even though there is a lot of doom and gloom in terms of the fundamentals, interviewees really believe that 2009 is a great time to buy,” says Susan Smith, director in the real estate business
advisory services group at New York City-based PricewaterhouseCoopers. “The No. 1 buy is apartments. One of the main reasons why is interviewees see a very diverse economic and demographic demand for apartments, especially for transit-oriented housing.” Warehouses are also a popular property pick, as they tend to offer steady returns despite economic declines, Smith says. The office sector, which fell in the middle of the road, had a delayed reaction to the economic crisis but will continue to feel the brunt of the pain for some time. Retail is the least-preferred property type, due to the dramatic decline in consumer spending in the past few months. Looking ahead to 2010, expect to see some turnaround in all market sectors. “The good news will probably outweigh the bad; right now, it is the reverse,” Smith says. What will 2011 bring? The
respondents are banking on a recovery. Market Snapshot The report offers a snapshot of markets to watch next year, with Seattle and San Francisco taking the top two rankings. Washington, D.C., landed a third-place spot, while New York City, which took the No. 1 spot last year, slipped to No. 4. “New York is an established market, and there’s a lot of demand there but there is a lot concern due to the city’s exposure to the financial markets,” Smith adds. Los Angeles took fifth place. Top opportunities in each of these cities: Seattle: The city has slowly been climbing its way to the top of the list. “It’s become one of those gateway markets that investors like,” Smith says. The market is a strong buy for
ACCESSLASVEGAS December 2008 | January 2009
apartments and the No. 1 buy among industrials in the Puget Sound ports. San Francisco: The city ranks first for development and homebuilding and is a leading buy for apartments and offices. Foreclosures should remain in check. Washington, D.C.: The seat of the Capitol is ranked as the “ultimate hold market when the economy struggles.” Downtown office vacancies should remain below 10 percent and apartments will lease “no matter what.” Expect a strong outlook for retail due to above-average employment, but office vacancies are expected to continue in northern Virginia where further declines in condos and home prices are expected. New York City: The city is suffering job losses and office vacancies due to the Wall Street meltdown. Hotels are expected to continue attracting tourists due to the weak dollar.
assets from the bad. 6) Retrench on development, and reorient to mixed-use and infill. 7) Go green; cutting energy expenses is likely to be a priority. 8) Buy or hold multi-family; hold office; hold hotels; buy residential building lots, but be prepared to hold. 9) Purchase distressed condos in urban areas near transit. 10) Focus on neighborhood retail centers with strong grocery anchors and chain drugstores.
NATIONALNEWS Slow & Unsettled Conditions Prevail Short Term for Multi-Family Market LONG TERM PREDICTION: U.S. apartments will be worth dramatically more in 2013 than in 2008
Los Angeles: Downtown Los Angeles will likely benefit from the influx of condo and apartment projects under developments. “It’s almost impossible to lose money on apartment investments if you have a five or 10-year investment horizon,” one respondent said. Hotels are faring well, but homebuilders in San Bernardino and Riverside continue to struggle with the housing collapse. Top 10 Real Estate Investor Tips for 2009 1) Investors should sit tight; opportunities will surface at significant discounts. 2) Invest in maturity defaults, construction loans/bridge loans, or take mezzanine positions and equity stakes in properties. 3) Invest in REITS as they will lead the market’s recovery. 4) Focus on global pathway markets, including 24-hour coastal cities. 5) Staff up asset managers, leasing pros, and workout specialists; separate good 4
Source: Teresa O'Dea Hein Multi-Housing News
"While there currently is a gap in pricing expectations between buyers and sellers and transaction velocity has slowed considerably, the fact that there's no ideal alternative opportunity to multi-family means that the market will come out of these short-term challenges with renewed strength -- we just have to get there," predicted Linwood Thompson, managing director at Marcus & Millichap. Thompson was speaking at the 2008 Multi-Family Executive (MFE) Conference held in Las Vegas from October 13 to 15. "There is no consensus that we've reached a pricing bottom yet," Thompson added. He believes that most apartment buyers are now in waiting mode -- keeping their powder dry. “Now, we’re in a market stalemate.” Furthermore, he expects that "we'll go another 18-24 months until we get
competition back into multi-family lending." The short term will be tough, but we won't replicate what we saw in the early 1990’s. “Echo Boomer demand supports appreciation, as does demand from immigration. Also, the fact that construction starts declined 25-30 percent in the past two years will help a lot in 2012,” Thompson noted. Thompson shared the following key observations for 2009: The multi-family capital markets remain fractured and expensive. Revenue growth will be moderate but not as low as in previous cycles. Sales velocity remains low. Transactional cap rates continue to differentiate for quality. Buyers are more cautious. However, apartments are 100 to 150 basis points inherently more valuable than they were 10 years ago, Thompson believes. Furthermore, U.S. apartments will be worth dramatically more in 2013 than in 2008, he predicts, so Marcus & Millichap is bullish on the U.S. apartment market. However, Thompson warns, one variable is rising unemployment, which is already being seen in previously strong multi-family markets like Seattle and New York.
U.S. Apartment Vacancies Rise on Concern Over Wages Source: Peter S. Green, Bloomberg.com
The vacancy rate for U.S. rental apartment buildings rose to 6.1 percent in the third quarter as falling wages and a lack of jobs kept potential renters off the market, Reis Inc. reported. The average monthly asking rent rose 0.6 percent from the second quarter to $1,053, the 26th consecutive quarter that rents increased or stayed the same, according to Reis, a New York-based research firm. “There's been a lot of discussion that with all of the things going on with the housing crunch, it would benefit the apartment sector,” Sam Chandan, chief economist at Reis in New York, said in
an interview. “People are nervous about jobs and wage growth is stagnating.” Vacancies are rising in part because of a lack of jobs for recent college graduates, Chandan said. The U.S. shed 159,000 jobs in September, the most in five years, according to Labor Department data. The jobless rate, the last one reported before the November presidential election, remained at 6.1 percent. Hours worked reached the lowest level since records began in 1964. Real wages in August fell 2.5 percent from a year earlier, the U.S. Labor Department reported on September 16. “When wages don't grow, we don't see significant rent growth either,” Chandan said. The last time U.S. rents fell was the first quarter of 2002, when they declined 0.2 percent, according to Reis. “Twenty- to 30-year-olds are about 70 percent renters; they are a key driver for demand,” said Chandan. “When they are not finding jobs, they are not renting either. They are more likely to move home with their parents.”
INVESTORUPDATE Local Developers Say Vegas is Tough, Not Impossible Source: MULTIFAMILY EXECUTIVE News Service
With depressing economic news bombarding developers on a daily basis, it's easy to fall into the trap of constantly hitting refresh on your Internet browser. But that's the worst thing you can do, says Rich Worthington, president of The Molasky Cos., a developer in hard-hit Las Vegas.
The September jobless data followed a 73,000 decline in August and showed the world's largest economy may be headed for bigger job losses as consumers and companies retrench. “You need to turn the monitor, stop looking at Wall Street, and know your market,” Worthington said during the “Where the Rents are rising in some parts of Texas, the Pacific Northwest Deals Are” session at the 2008 Developer Conference in Las and Northern California, Chandan said. “It follows the general Vegas. economy,” Chandan. “The industries in those areas are doing a little better than the mid-Atlantic, Southern California and the Instead, Worthington, who has a diversified portfolio in of Midwest.” 5,000 apartment units in the Las Vegas area, is trying some new things with his development platform. “I'm now building Asking rents grew the most in Tacoma, Washington, in the prisons and jails,” he says. “They're a multi-family product.” third quarter from a year earlier, rising 7.3 percent. Seattle rose 7.1 percent, San Francisco increased 6.3 percent and New York Worthington isn't the only developer in Las Vegas choking on City rose 4.6 percent, according to Reis. unsold inventory. Developers are trying anything, from reengineering products to implementing price cuts. New York had the highest average U.S. rent at $2,855 a month, followed by San Francisco at $1,827; Fairfield County, “Most developers are trying to figure out -- how do I make Connecticut, at $1,764; Boston at $1,660; and Orange County, forward progress?” says Alex Edelstein, founder and CEO of California, at $1,532, Reis said. locally based Gemstone Development. "The product in Las Vegas can't differentiate itself.” New York had the lowest vacancy rate at 2.0 percent for the quarter, followed by Long Island at 2.8 percent, Central New In his effort to differentiate himself, Edelstein says that he's Jersey at 2.9 percent, San Jose at 3.2 percent and New Haven, finding that areas for socialization are strong selling points with Connecticut at 3.2 percent, Reis said. younger buyers and renters. “They want places to hang out,” he says. “I want to have something where my friend will come Large cities with the highest vacancy rates in the third quarter across town and visit me.” included Memphis at 10.6 percent, Phoenix at 10.0 percent, Houston at 9.5 percent, Fort Worth, Texas at 9.1 percent, In Phoenix, Eric Brown, a one-time builder is seeing developers Atlanta at 8.9 percent and Las Vegas at 8.8 percent, Reis said. do things such as sell two lots for the price of one to move product. “You try to do anything other than just dropping your In Sunbelt markets including Palm Beach, Florida, where the price,” he says. Brown, who has lived through past downturns vacancy rate was 8.0 percent, competition for renters from in the '80s and '90s, won't really feel comfortable that Vegas condominiums for rent is keeping rents down and vacancies up, has stabilized until he sees about four sales per month for a few Chandan said in an e-mail accompanying the report. months. Richard Gollis, principal of the Boston-based real estate advisory firm Concord Group, thinks Vegas probably won't recover for three to five years. But in the meantime, there will be opportunities for deals. Institutional capital needs more return than what the current market can support. That leaves room for others. "Deal size will go down," Gollis says. "That creates an opportunity for the small guys." 5
ACCESSLASVEGAS December 2008 | January 2009
Las Vegas Metro Occupancy Trends November 2007 through October 2008 93% 92% 91.89%
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Source: CB Richard Ellis (102,239 Apartment Units Surveyed in October 2008)
Las Vegas Snap Shot KEY INDICATORS
Source: The Bentley Group
2Q 2008 RESULTS
1Q 2008 RESULTS
4Q 2007 RESULTS
Average Rent per Unit
Average Rent per SF
Annual Rent Growth
Access Investment Offerings ASKING PRICE
PER UNIT PRICE
Broadstone Montecito Apartments (336)
The Bentley Group / 702.855.0440
BROKER / CONTACT INFORMATION
Augusta Apartments (272)
The Bentley Group / 702.855.0440
Brittnae Pines Apartments (208)
Keith Vannattan / 702.376.4305
Winsome West Apartments (228)
Realty Executives / 702.743.8991
Tiffany Place Apartments (182)
The Bentley Group / 702.855.0440
Sunset Hills Luxury Apartments (120)
Marcus & Millichap / 702.215.7128
Rainwalk Apartments (200)
The Sauter Companies / 702.383.3383
Access Recent Transactions COMMUNITY (UNITS)
PER UNIT PRICE
Century Vilage (258)
August 22, 2008
Snug Harbor (64)
August 15, 2008
July 23, 2008
Sentinel Real Estate
Canyon Pointe (670)
July 2, 2008
Artisan Real Estate
Siegel Suites Swenson (328)
July 1, 2008
The Siegel Group
Oak Tree (60)
July 1, 2008
Bill & Karolyn Oâ&#x20AC;&#x2122;Brien
The Pyramid (304)
June 12, 2008
Phillips P. Yee
For additional information and / or broker information on Access Investment Offerings and / or Access Recent Transactions contact Bret Holmes at 702.699.9261.
ACCESSLASVEGAS December 2008 | January 2009
Decline in Multi-Family Construction Means Fewer U.S. Jobs If multi-family construction dies, as projected in 2009, the U.S. economy stands to lose a total of 155,000 jobs across a wide range on industries, and roughly $4.5 billion in combined tax and other revenue for federal, state, and local governments Source: NAHB Multifamily
Between 2002 and 2005, the number of housing starts per year in buildings with five or more units were consistently higher than 300,000, but have declined modestly since then, and are projected to decline even further. NAHB currently is forecasting that total five-plus starts will come in at 288,000 in 2008 and drop to 218,000 in 2009. This naturally raises questions about the impacts a decline in multi-family construction has on the U.S. economy.
multi-family construction. Across all industries in 2008, NAHB estimates that building 100 average multifamily housing units generates a total of
The difference reflects primarily the distinction between condos and rental apartments in average construction value. The wages and salaries earned in the jobs generated by multi-family construction are subject to income and Social Security taxes. Profits earned by owners of the businesses are similarly taxed. Beyond this, states often impose sales taxes on materials sold to builders, and many local jurisdictions levy fees for approving building permits, extending utility service, and for school-related or other impacts attributed to residential construction. At the federal, state, and local levels combined in 2008, NAHB estimates that building 100 average multi-family units generates a total of
HOTHEADLINES The employment impacts are broad-based. In addition to the workers employed directly to build the structures, multi-family construction generates jobs in the industries that produce and distribute steel, concrete, lumber, lighting fixtures, heating equipment, and other products. Additional jobs are generated for professionals such as architects, lawyers, engineers, lenders, real estate agents and others who provide services used by multi-family builders. But a decline in the number of multifamily units built doesn’t tell the whole story, as the composition of multi-family starts has changed significantly over time. For example, starts of rental multifamily (including 2-4 units) actually increased by 9,000 units in 2007 while multi-family condominium starts plummeted from 151,000 to 115,000. This is significant, because the value of a typical condominium unit is greater than the value of a typical rental apartment, and the difference has been expanding. According to the Survey of Market Absorption (SOMA), the median asking price for new condos (in buildings with five or more units) was only around $200,000 at the start of 2004. By 2006 this had increased to more than $300,000, where it has remained. In contrast, the median asking rent for new five-plus condos increased much more slowly over the same period -from about $910 per month at the start of 2004 to $1,170 according to the latest measurement. Because of the obvious differences between condos and rental apartments, it makes sense to report separate impacts for the two categories of 8
• 116 jobs for 100 rental apartments • 293 jobs for 100 multifamily condominiums
• $3.3 million in tax and other government revenue for 100 rental apartments • $8.6 million for 100 multi-family condominiums
These estimates are designed to capture the impact of home building on the aggregate economy and are based on national averages. As such, they may not perfectly reflect the situation in any specific state or local area. Key variables such as the mix of industries present, wage rates, and the value of an average new multi-family unit can be quite different in different parts of the country. Areas where the production of construction materials accounts for a large share of employment may be strongly impacted by the strength of multi-family construction at the national level. Of the $3.3 million in tax and fee revenue generated when 100 average rental apartments are built, federal income taxes (nearly $1.1 million, if taxes paid by businesses and employees are combined), and Social Security taxes ($847,000) account for the largest share. However, the amounts of revenue generated in the form of state and local income taxes ($360,000), construction-related fees ($304,000), and sales taxes ($199,000) also are substantial. The $8.6 million in tax and other government revenue generated by 100 new multi-family condominiums breaks down much the same way, but all of the numbers are proportionately larger due to the greater construction value per unit assumed for the condominiums. Returning to the question posed in this article, what if multi-family production falls by 70,000 units in 2009, as is projected in the current NAHB forecast? The impacts of this are even worse than the raw drop in production suggests. The forecast incorporates a proportionately greater reduction in new condominiums, which on a per unit basis support more jobs and tax revenue. Thus, if multi-family construction dies, in fact, decline as projected in 2009, the U.S. economy stands to lose a total of 155,000 jobs across a wide range on industries, and roughly $4.5 billion in combined tax and other revenue for federal, state, and local governments. In this economy, this is another log thrown into a raging fire. When will it stop, at this point no one seems to know...
Southern Nevada Multi-Housing Association Strengthens Your Voice Whether you are a management company, owner or vendor member, your membership in the Southern Nevada Multi-Housing Association strengthens your voice in the multi-housing industry. Your membership is a vital contribution to what is happening now and in the future of the multi-housing industry in Nevada.
The Southern Nevada Multi-Housing Association was formed in 2002 through a merger of the Silver State and Nevada Apartment Associations. Together, these associations embodied over 38 years experience representing the interests of rental housing owners. In addition to management companies and owners, SNMA encourages companies that supply products and services to become members.
SNMA also works very closely with the National Apartment Association (NAA), which is the industry’s largest voice on many of multi-family’s gains and shortcomings. On January 20, 2009 NAA President, Doug Culkin, will be speaking at SNMA’s first scheduled industry meeting in the new year. “The relationship SNMA and NAA are building is monumental for the Las Vegas multi-family industry. It is truly a synergy we embrace,” Holmes adds. Networking opportunities, like this one, are provided to SNMA members by meeting on a regular basis.
The Southern Nevada Multi-Housing Association and its associate in northern Nevada represent approximately 78,000 (combined) multi-housing rental units.
The Board of Directors of the Southern Nevada Multi-Housing Association Together with the Northern Nevada created the Southern Nevada Apartment Association, SNMA retains a Multi-Housing Disaster Relief Fund lobbyist to represent the multi-housing administered by the American Red Cross industry in Carson City, Nevada during to benefit residents of rental properties legislative years. SNMA offers innovative who are displaced from their homes by industry related educational programs for fire, flood or other natural disaster. They upper management, on-site personnel, continue to work closely with the American Red Cross to develop additional programs to benefit the rental community.
“The SNMA (Southern Nevada Multi-Housing Association) is a great way for management companies, owners and vendors to come together throughout the year”, states SNMA president-elect Bret Holmes of Advanced Management Group. “We all share one common goal, to improve all facets of the industry”, Holmes continued. The SNMA is a non-profit corporation that provides education and legislation support on the city, county, state and national levels.
association has embarked on an active program to become an effective participant in the community, legislative and member activities.
maintenance and vendors. Some programs have been approved by the Real Estate Division for continuing education units for licensees. The SNMA’s commitment is to provide, with innovation and integrity, legislative support, education and community outreach to our membership and industry. The SNMA is very proud of the classes it offers, striving to encourage professional performance within the multi-housing industry. Classes are open to all interested SNMA members, at a discounted price, as well as to the general public. Topics range from management to leasing / sales to maintenance and also include several topics of general interest, such as Fair Housing. More SNMA History After a successful merger of the Silver State Apartment Association and the Nevada Apartment Association to become the Southern Nevada MultiHousing Association (SNMA), the new
The Board of Directors also approved the formation of a Political Action Committee (PAC). The SNMA Political Action Committee will establish its identity with all elected officials in the state of Nevada and actively propose legislation beneficial to the association members. The SNMA PAC will also pledge support to legislative, county and city elected officials who deserve support for bills and ordinances that will benefit business and community interests. Full Member Benefits & Services • Legislative updates and representation, locally, statewide and nationally. • Frequent networking opportunities with industry colleagues and vendors. • Innovative Education programs offering national designations and industry related training. • Business and career referrals from SNMA members. • Advertising and sponsorship opportunities within your target market. • Publications and resources such as the annual Membership Directory. • The Landlord/Tenant Law handbook at a reduced member rate. • Legal advice at a reduced rate through a referral to the association attorney. • Discounts on Property Liability Insurance upon meeting required criteria. • Renters Insurance programs. • Community Involvement. You may contact the SNMA by calling 702.436.SNMA.
ACCESSLASVEGAS December 2008 | January 2009
Routine Maintenance, The Cure For Your Biggest Headaches Measuring Your Property Management Team: Are They Working for You or Are You Working for Them? Maintenance of any apartment building should be handled as much as possible on a routine basis rather than on an emergency one. Too many times a property management team is REACTIVE and not PROACTIVE when it comes to maintenance. Preventative maintenance must be performed on a regular basis to keep the level of service at the property high and to reduce equipment breakdowns and service interruptions. Toward this end, the maintenance staff and on-site manager should make regular inspections for the repair and replacement of items before problems occur. Preventative maintenance reduces the number of emergencies by anticipating wear and tear that the property, buildings and equipment will undergo.
Preventative maintenance is one of the most important components of successful property management. An appropriate preventative maintenance program should be developed for both large and 10
small properties, regardless of whether building staff consists of only a part-time maintenance worker or a larger number of employees supported by a computerized maintenance program. Careful preventative maintenance eliminates corrective and emergency repairs later. While many owners and managers consider preventative maintenance a poor use of cash, and some claim to have no time for it, the truth is that preventative maintenance, by identifying problems in early stages, saves both time and money.
Evidence of building settlement, structural damage, leaks, and corrosion should be noted during building inspections. In addition to regular daytime inspections, there should also be occasional night inspections to test and examine lighting and other security features; these inspections should include an evaluation of the property's appearance to visitors and prospective tenants. Emergency Maintenance
Emergency maintenance is a form of The following four steps are required to corrective maintenance. Immediate develop a good preventative maintenance action must be initiated to correct program: emergency situations that threaten the life and health of tenants, as well as the • Prepare an inventory of all items integrity of the property. Situations that require servicing during the year. requiring emergency maintenance can be created by fires, floods, and burglaries, or • Determine the type of service, the malfunctioning of major equipment frequency, and cost efficiency of (e.g., broken elevators, gas or water main performing the work required by leaks). each item. Preparations for such an emergency • Schedule the work throughout the year. should begin upon occupancy. Tenants and building personnel should be versed • Control and revise the preventative in emergency procedures such as maintenance program as needed. evacuation, and should receive a list of telephone numbers for the local police, The building, major equipment, and fire department, and utility repair grounds should be inspected regularly by persons, as well as the building's 24-hour the maintenance supervisor to note both emergency number. Emergency the unusual and normal wear and tear. maintenance is the most costly of all This inspection is, by and large, a quick maintenance types because of dangerous visual one, and the details of the conditions and the swift response they inspection do not need to be entered on require. any form. For work that needs to be “Southern Nevada Multi-Housing performed, a work order should be Association Strengthens Your Voice” and prepared. Detailed inspection reports can be used as a reference for the daily inspections, and these forms should be completed on a regular basis in accordance with the maintenance plan. In general, these inspection reports should be completed at a minimum of once each month. The property manager should inspect the interior and exterior of the property.
“Routine Maintenance, The Cure For Your Biggest Headaches” were written by Michael Fazio, Designer and Editor of ACCESSLASVEGAS. For comments, information, article consideration and featured columns Michael can be contacted at 702.541.5160.
Leasing Agents: You Need A Great One . . . Not Just A Good One
become the best leasing agent, dress like it. The more professional you look and behave, the more comfortable clients will be with you. • Project the right attitude. The best performers in any business are those
What is it that separates the best leasing agents from those that just scrape by? Oftentimes, it’s nothing more than dedication to the job and a willingness to succeed. Projecting the right attitude and making the right move at the right time are vital as is an ability to make potential tenants feel comfortable and appreciated. There are ways for any leasing agent to capitalize on their chances for success. Here are five of the top traits some of the best leasing agents possess. Put these measures to work for you: • Dress for success. This can’t be stressed enough. Appearance projects confidence and trust. If you want to
Renters Less Concerned About Appearances, Want To Be Close To Work & Friends Data recently released from the AHS shows that the top three reasons households move into a particular rental apartment in a building with five or more units are:
who have a winning attitude. Strive to be the best, stay upbeat and positive, and you’ll find the efforts pay off in leases closed. When mistakes happen, taken them in stride, learn from them and continue forward on a positive note. • Listen to potential tenants. The best leasing agents are those who listen well to what potential tenants need and want. Those agents who let their prospects do a lot of the talking while still managing to sell the high points of the their units are the ones who make the sales.
• Financial reasons (41%) • The room layout & design (27%) • They like the size of the unit (21%) The top three reasons they choose a particular neighborhood are: • To be close to work (37%) • To be close to friends or relatives (24%) • Like the design (16%) Households that recently moved into buildings with five or more rental apartments are chosen as the group to analyze, in order to exclude smaller
• Ability to close. No leasing agent can become a superstar unless they know how to close. Knowing when to ask for the sale and how to do it can make all the difference in the world. Listen to potential tenants for cues on when to close and how to proceed. Sometimes a “Would you like this apartment?” will suffice. Other times a less direct question, such as “Would you like to start the paperwork?” is necessary. Watch clients and get a feel for their desires for when to interject. Don’t expect success every time. Failing to make the closing move, however, is a waste of your time and your potential tenants. If they didn’t want to rent an apartment, they wouldn’t have paid you a visit. • Follow up. Don’t give up until the person either leases from you or someone else. Drop them a line to thank them for visiting the property. Call to see if they have any questions. Send them an e-brochure. Don’t let them forget about you. There’s a fine line between a good leasing agent and a great one. Those who take the extra steps to present themselves and their properties in the best light while listening to potential tenants and making the closing move at appropriate times are the ones who rise to the top. Leasing Agents should hone their skills by practicing each day and they’ll find closing leases will come easier... “mom-and-pop” operations in favor of the larger (and more likely to be professionally managed) buildings. Like people moving into any type of housing, those moving into five-plus rental apartments tend to want every possible amenity at the lowest possible cost. All amenities are usually not attainable at an affordable rent, however, so the choice of a particular apartment and location tends to involve various trade-offs. Knowing what motivates these decisions is important to builders planning new multifamily projects, and to property owners marketing existing ones. The most recent AHS data has shown that five-plus renters are most often motivated by a desire to be near things particularly work, family, and friends. Moreover, they seem increasingly willing to give up view and exterior appearance to attain these key proximity’s. 11
ACCESSLASVEGAS December 2008 | January 2009
Happy & Safe Holidays From Access Las Vegas Access Las Vegas and its parent company, Advanced Management Group, wish you and your families a safe holiday season and a happy New Year. We have enjoyed another successful year of developing this newsletter and hope our informational articles have helped benefit you at your property(s). We look forward to delivering bigger and better content in 2009...so Access Las Vegas, and leave the rest to us. Access Las Vegas ensures accurate market information, industry articles and multi-family housing trends that are delivered with flawless precision. The multi-family housing industry is changing rapidly and we do not want owners or asset managers to fall behind. Financial success depends on staying ahead of changes. Access Las Vegas, the key to your success...
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