Page 1

BELIEVE IN DOING THE RIGHT THING.


STUDENT HOUSING BUSINESS 2014 AWARDS

Best Turnaround Project AURARIA STUDENT LOFTS - DENVTER, CO BY CARDINAL GROUP MANAGEMENT


background

.

COMMUNITY

OPPORTUNITY

HISTORY

CHALLENGES


AURARIA STUDENT LOFTS (THE “COMMUNITY”) is a 125-unit, 438-bed institutional-quality student housing community located in Denver, CO. The Community leases its units in a “per-bed” fashion with each unit housing between two and four occupants, each with their own furnished bedroom, as well as a shared and furnished common living space. The Community caters to students at the Auraria Campus, historically a commuter campus located two blocks away in downtown Denver. The Auraria Campus is home to three higher-education institutions with a combined enrollment of over 51,000 students: Metro State College of Denver, University of Colorado – Denver, and the Community College of Denver. The Community combines the experience of college life with the unique setting of city living. Residents enjoy premium access to many of Denver’s most popular restaurants, bars, nightclubs and coffee shops that make up Denver’s 23 square block “LoDo” (Lower Downtown) Historic District.


IN ORDER TO ILLUSTRATE THE TURNAROUND SUCCESS STORY, one must understand the community’s troubled past at the time of Cardinal Group Management’s (“CGM”) takeover in June of 2011. Auraria Student Lofts began as a high-rise office tower in the 1950’s, and was converted in 2006 to a mixed use high-end hotel (The Curtis Hotel) on floors 1-16 and a poorly executed student housing community on floors 17-30 called The Inn at Auraria. Though 100% occupancy was reached in 2006, their occupancy and net operating income rapidly declined in subsequent years. 2012 was a year of recovery, 2013 was proof that our turnaround strategy was a success and here to stay. This is why CGM believes the results make this Community the best candidate for SHB’s 2014 Best Turnaround Project of the year.


Challenges HISTORICAL PERFORMANCE The Community was achieving top-ofmarket rents; however, historically low occupancy, exorbitantly high operating expenses, outstanding bad debt of ~$800,000, and the lack of amenities made this acquisition and repositioning very challenging and risky.

LACK OF MARKET AWARENESS & STREET PRESENCE If the name, The Inn at Auraria wasn’t bad enough, the Auraria Campus has historically been a commuter campus and changing this mindset would be challenging. Having it called “The Inn”, was confusing in and of itself, but the fact the community shared the high-rise with a hotel, The Curtis Hotel, made it mindblowing! To make matters worse, the Community had dreadful street presence with one small entrance on a bland street and only one small door sign in a recessed entry vestibule window. All of these factors made it virtually impossible for prospects to locate the community. In fact, it was so bad that when some students were convinced to take a tour, they would call for directions standing only a few steps away!

SPACE PLANNING & DESIGN The unit interiors and common areas were poorly designed, underwhelming and noncompetitive with the market comps. The Community lacked an amenity suite and the appropriate operating setup for the team to effectively do their jobs. The lobby area was faulted with a suffocating low drop ceiling, no defined leasing area, and two small management offices (leasing was done in the copy closet!) that never allowed for inner-office meetings or strategy sessions. The defunct space really left the previous management team with an impossible leasing environment; an environment where residents would be complaining about an issue directly in front of a perspective resident about to begin a tour!


the turnaround. OPERATIONS & CAPITAL IMPROVEMENT / PHASE 1 / PHASE 2

EXECUTION


Operations & Capital Improvement OPERATIONALLY, THE MOST IMPORTANT ASPECT OF CGM’S PLAN WAS TO BUILD A COMPETENT AND MOTIVATED TEAM WHO BELIEVED IN UNLOCKING THE COMMUNITY’S ULTIMATE POTENTIAL AND COULD ENTHUSIASTICALLY SELL THAT VISION. EMPHASIS WAS PLACED ON BUILDING A “COMMUNITY” BY CONNECTING WITH OUR RESIDENTS, HOSTING NUMEROUS RESIDENT EVENTS AND FOCUSING ON CUSTOMER SERVICE. CGM IMMEDIATELY:

Management Team Most of the on-site team was replaced. CGM recruited a team that fit the market and the community’s needs. The team’s interests were aligned and they were properly incentivized to ensure the Community performed.

Expense Reduction Worked with Denver Water on subsidizing and installing low flow toilets, fixtures, shower heads and light bulbs.

Security We further secured the building with key fobbing the elevators and placing security cameras in needed areas, which dramatically reduced the amount of vandalism and damage to the property.

Capital Improvements Developed a two-phase CapX strategy. Phase I: Common area upgrades to the front entrance, street presence façade, lobby, outdoor terrace, leasing experience, elevator lobbies, unit corridors, internet bandwidth (previously had 20MB for 430 beds!), management offices, and building signage. Lease Terms The lease terms were extended from 10-months to 12-months, capturing ~17% more potential gross revenue. To do this, residents needed a reason to stay over the summer and the Community needed strong enough demand to garnish negotiating power.

Phase II: A best-in-market urban amenity suite was completed this past Summer, including clubroom, study room with private study collaboration rooms, fitness center with skyline views of downtown Denver, outdoor resort lounging pool with cabanas, grilling areas and cornhole courts.


PHASE 1

FRONT FAÇADE & SIGNAGE

Receiving one of the largest backlit building signs, spanning almost 100 feet across by 9 feet tall, in addition to improving the Community’s entrance along 14th Street, immensely improved street presence, increased visibility, and created a strong sense of arrival at the Community.


BEFORE

AFTER

ONE OF THE LARGEST BACK-LIT SIGNS IN THE

DENVER SKYLINE

and most importantly, visible to the entire Auraria Campus.

SIGNAGE

BEFORE & AFTER


LOBBY LEASING & OPERATIONS

PHASE 1


BEFORE

AFTER

AFTER

THE SLEEK, MODERN CUSTOMER CENTRIC DESIGN. This included recapturing the plenum space to add much needed management offices and creating a matching leasing experience with the glass cubed leasing office with an interactive leasing wall monitor.


SIGN YOUR NEW LEASE OR RENEWAL ON AN IPAD DURING A TOUR OR IN YOUR UNIT

PHASE 1

INTERACTIVE PROJECTOR – “FUNCTIONAL ART”

INTERACTIVE LEASING WALL

LEASING EXPERIENCE Our main focal point in designing this space was leasing. The new central point when you walk into the building is the leasing office with large glass doors. Using a large projector, we are able to create an interactive leasing experience, showcasing floor plans, pictures, and our viral promotional videos in real time. It truly is a leasing experience like no other.


PHASE ROOFTOP, FITNESS, CLUBROOM, STUDY


RENAMING, REBRANDING & MARKETING

THE BRAND & REPUTATION

WEBSITES TRADITIONAL, MOBILE & IPAD

VIRAL VIDEOS

MARKETING COLLATERAL

leasing & marketing. STREET TEAMS

REFERRAL PROGRAM

OUTRAGEOUS GIVEAWAY GAME THE “OGG”

RESIDENT LIFE

SOCIAL MEDIA

-S IZZLE-


RENAMING REBRANDING & MARKETING RENAMING & REBRANDING

TRADITIONAL MARKETING

RESIDENT LIFE PROGRAM

Plans were immediately put into place to move away from The Inn at Auraria name and reputation; separating the student housing component from its co-tenant, The Curtis Hotel. Cardinal Group renamed the community, Auraria Student Lofts: “Auraria” = the market we serve; “Student” = the customer we are targeting; and “Lofts” = the product type we offer.

Student orientations, student newspapers, online advertisements, housing fairs, campus flyering and Craigslist.

Regularly scheduled Community events and the first annual “Outrageous Giveaway Game” (details to follow). Played on “Location is Essential” and used a “members card” with local Denver vendors and retailers.

WEB ASSETS The new brand needed a strongest in the market web presence, which was achieved through: traditional, mobile, iPad, social media, and viral video mediums.

COLLATERAL Clean, concise, professionally designed, and student-minded.

GUERILLA MARKETING Aggressive, in your face, grass root marketing, such as: Auraria Campus Street Teams and the “can’t miss” mascot Tealios.

REFERRAL & RENEWAL PROGRAMS An aggressive referral program and the buzz worthy, “Pick a Key, Live for Free!” campaign.


Given the Community’s history, the strategy was a full scale marketing warfare. This was a collaborative effort. Strict screening standards (background and credit) were immediately put into place, the perception & reputation had to start with getting the “bad apples” out and “good apples” in! The Inn at Auraria was rebranded and renamed, Auraria Student Lofts . Simultaneous to the rebranding, a launch video (found on YouTube) and renderings were released to existing residents and online.

the brand & reputation - THE BRAND BEFORE -

- THE BRAND AFTER -

Auraria’s mascot, “Tealios”, was birthed and started making regular scenes on campus. Tealios was seen dancing on 16th Street Mall, at sporting events, ziplining on campus (!) and running a photo booth to get your picture taken with him.

- THE MASCOT -


AurariaStudentLofts.com

AurariaStudentLofts.com/m/

websites - traditional, mobile & ipad


CLICK TO VIEW VIDEOS

viral videos

Acknowledging the power of social media amongst today’s teenager, a video campaign was launched.

“Auraria Student Lofts is the Place for YOU!” View the video at www.aurariastudentlofts.com


BEFORE

AFTER

takeaway piece 303.500.0429

$2 MILLION

in New Amenities

RENT

LOCATION IS ESSENTIAL

WE ARE LOCATED ONLY 2 BLOCKS FROM CAMPUS

marketing collateral

1051 14th Street | Denver, CO 80202

AurariaStudentLofts.com

NEW RESORT STYLE LOUNGE POOL NEW STATE-OF-THE-ART GYM NEW STUDY LOUNGE & PRIVATE STUDY ROOMS NEW HIGH-TECH GAME ROOM NEW GOURMET GRILLING AREA Apartment living - Live among the action! High-rise living with skyline & mountain views Central location to LoDo & 16th Street Mall On-site laundry facility with text alerts Individual leases Cyber lounge Your own bedroom. Always! Fully furnished Full size kitchen Secured access building All utilities included in rent including premium cable & high speed internet

ALL NEW COLLATERAL WAS DEVELOPED. Professional, simple, conveniently-sized yet informative pieces spearheaded the thought behind the creation of these pieces.


EQUIPPED WITH BRANDED STREET TEAM IPAD’S,

STREET TEAMS

UNIFORMS, COLLATERAL, AND PROMOTIONAL ITEMS OUR STREET TEAM SWEPT THROUGH THE AURARIA CAMPUS WITH ONE GOAL IN MIND – ENSURE ALL STUDENTS KNEW ABOUT AURARIA STUDENT LOFTS! THE STREET TEAMS WOULD ALSO COLLECT PERSONAL INFORMATION, WHICH KICK STARTED AN IMMEDIATE, AND VERY SPECIFIC, FOLLOW-UP CAMPAIGN WITH EACH AND EVERY LEAD.


REFERRAL PROGRAM AN AGGRESSIVE REFERRAL PROGRAM to “Pick a Key and Live for Free” promotion was created in which residents were highly incentivized to refer their friends and classmates. Each referral lead up to $3,200 in cash, a flat screen TV for the unit, free rent and a 16GB Apple iPad for referring others to sign leases. In addition, each referral had the opportunity to pick a key from a bucket and possibly win free rent for a year. In the end, Auraria had 3 lucky winners.

ONE OF OUR ELATED ‘PICK A KEY, LIVE FOR FREE’ WINNERS


the outrageous giveaway game

“OGG” HOW IT WORKED: RESIDENTS ACCUMULATED TICKETS ONE OF THREE WAYS: (1) RENEWING A LEASE, (2) SIGNING A LEASE, AND (3) REFERRING THEIR CLASSMATES. THE MORE GAME TICKETS THE MORE CASINO/GAME CHIPS. WHOEVER ENDS UP WITH THE MOST CHIPS AT THE END OF THE NIGHT WINS BIG! PRIZES INCLUDED: APPLE MACBOOK PRO COMPUTER, 16 GB IPAD, 2 BRONCOS TICKETS ON THE 50-YARD LINE, SKI PASSES TO VAIL, 42” FLAT SCREEN TV, XBOX KINECT, MOUNTAIN BIKE, AND GIFT CARDS TO REI.


ROOT BEER PONG LUAU

BREAKFAST & CARTOONS

“BLISS” POOL PARTIES

RESIDENT LIFE = “RESIDENT RETENTION”? WE’D LIKE TO THINK SO… THEREFORE, OUR TEAM HELD UNIQUE EVENTS THAT APPEAL TO STUDENTS THAT WANT TO BE TREATED AS “ADULTS”…NEWS FLASH… 18 YEAR OLDS DON’T THINK THEY’RE “KIDS” AND DON’T WANT TO BE TREATED AS SUCH!

FOOD TRUCK

PIZZA POWER TOWER


social media

Facebook, YouTube and Instagram was the focus. Facebook quickly elevated to over 600 likes within six months of publication! CGM views Facebook pages as a virtual bulletin board and scrapbooking for the community. The key is, fun, relevant, informative and reliable information for residents. Our YouTube channel had ~5,000 views, allowing us to leave a lasting impression in our markets mind.


knowledge


NET OPERATING INCOME

NOI $2,500,000 $2,000,000 $1,500,000 $1,000,000 $500,000 $

FY 2010

FY 2011

FY 2012

FY 2013

FY 2014

Rebrand & Renaming

Turnaround

Stabalization

SINCE TAKEOVER: 170% INCREASE IN NOI. 2011 = $815K, 2014 (TRENDING) = $2.2M. 48.5% INCREASE IN REVENUE (TRENDING), 18.5% INCREASE FROM LAST YEAR’S NUMBERS. 27% DECREASE IN EXPENSES. PRELEASE PERCENTAGE (AS OF 12/31): 21.5% (2013), 15.6% (2012), 0% (2011), PROJECTING A SECOND STRAIGHT YEAR OF 100% OCCUPANCY. ALL FULL TERM,12 MONTH LEASES. OCCUPANCY AT TAKEOVER ~60%, ALL SEMESTER, 10 MONTH LEASES. ASL CONTINUES ITS SUPREMACY AS THE PLACE TO LIVE FOR STUDENTS IN DENVER.


ABOUT US MANAGEMENT

INVESTMENTS

Cardinal Group Management (“CGM”) is a full service real estate management firm. CGM has a specialized platform that allows them to handle all facets of real estate management throughout the United States. Including: entitlement, development, construction management, property management, accounting, and creative leasing & marketing. CGM leverages their culture, unique company structure and high regard of technology to deliver superior results and reporting to its clients.

Cardinal Group Investments (“CGI”) is a real estate investment and asset management firm specializing in opportunistic and valueadded investments throughout the United States. CGI combines a highly analytical approach with thorough research and reporting systems to deliver results and transparency to its investors and clients.

PORTFOLIO Cardinal Group is headquartered in Denver, CO and has an office in San Francisco, CA. The Company owns and manages student housing and conventional multi-family portfolios around the country. As well as advises on a $3 billion mixed-use urban redevelopment in Denver, CO.


For more information

CONTACT DEL DE WINDT, CEO CARDINAL GROUP MANAGEMENT (303) 407-4502 DEL@CARDINALGROUP.COM

Best Turnaround Project 2014 - ASL  
Read more
Read more
Similar to
Popular now
Just for you