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Professional Publishing, Inc

Vol. 17 Issue 6

June 2013

Get Social With The Landlord Times


MONTHLY CIRCULATION TO MORE THAN 5,000 APARTMENT OWNERS, PROPERTY MANAGERS, ON-SITE & MAINTENANCE PERSONNEL Published in association with: METRO Multifamily Housing Association & Rental Owners Association

Multifamily in Springfield, Oregon Springfield Sold Comps 2009 to 2012 Springfield has a number of noteworthy transactions for the years of 2009, 2010, 2011, 2012 and 2013. The market correction that occurred in 2008 and 2009 had a significant impact on the number of transactions and the availability of financing for apartment acquisitions. However the demand for multifamily properties has been high as the failure of the housing market has driven demand for apartments as a viable choice for housing. Decreasing vacancy factors, increasing rents and high tenant demand has made apartments a preferred investment property. The table below will show brief details of the closed transaction starting in 2009 and ending year to date for 2013. Continued on page 8

Current Resident or

The Landlord Times and Apartment News sat down with veteran apartment broker and investor, Joseph Chaplik to discuss Arizona, Oregon and the state of the apartment investment market. THE LANDLORD TIMES: Give us a brief history of your career. How did you get into the apartment brokerage business?

$1.1 Trillion Apartment Industry Highlights Multifamily Job Growth for Congress

Professional Publishing, Inc PO Box 30327 Portland, OR 972943327

6 Questions with Joseph Bernard

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Highlighting the economic strength of the apartment industry in front of Congress, Tom Bozzuto, Chairman and CEO of the Bozzuto Group, represented the National Multi Housing Council (NMHC) and the National Apartment Association (NAA) before a House Energy and Commerce Subcommittee recently. “The apartment industry is a competitive and robust $1.1 trillion industry that helps 35 million renters live in a home that’s right for them. In an environmentally sound way, we help build vibrant communities by offering housing choice, supporting local small businesses, creating millions of jobs and contributing to the fabric of communities across the country,” said Bozzuto, who is also chairman of NMHC. It takes at least 300,000 new apartments each year to meet demand, but less than half that number was delivered in 2012. Highlighting a $72 million apartment construction project in Baltimore’s Union Warf, Bozzuto drew the connection between job creation, manufacturing and multifamily development. Continued on page 8

JOSEPH CHAPLIK: Previously I was a Vice President of a telecommunication company and started buying apartments when I relocated to Portland. The level of professionalism by the other brokers was not impressive, so I decided to start my own company. I wanted to provide a higher level of professionalism, integrity and service to the apartment investors, which I thought they deserved. Today we represent close to 1/3 of the transactions; more and more clients have been gravitating to our company for our quality care. TL: You now serve four markets... give a brief state-of-the union on multifamily real estate in your new market, Phoenix, AZ. JC: We just opened our newest office in the Phoenix market this year and have been making great progress. The cap rates are around 7% and higher for the B and C quality buildings and locations. The price per unit is significantly lower than other markets, and the vacancy rates are modContinued on page 3 Page 2



MULTIFAMILY NW President • Paul Hoevet Past President • Jeff Denson Vice President • Pam McKenna Secretary • Kirsten Bailey Treasurer • Chris Hermanski


Multifamily NW President

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President's Message

Hello everyone. The Multifamily NW ACE Awards were held at the Portland Art Museum on the evening of May 16th. It was a wonderful event. There were over 500 attendees present for the dinner and awards ceremony. They watched, encouraged, and celebrated as seventeen of their colleagues, peers, and loved

ones were honored for their excellence in promoting quality rental housing. I would like to congratulate the winners as well as all of the nominees. I hope you all realize that your dedication and contributions are admired by your co-workers, families, friends, and the entire industry. I would like to acknowledge the

Multifamily NW 2013 Events: MARK YOUR CALENDAR! June 12, 2013 1:00 PM - 5:00 PM Washington Landlord/Tenant Law Vancouver, WA - 6:30 PM - 8:00 PM Landlord Study Hall - Screening and the Application Process June 17, 2013 9:00 AM - 2:00 PM ELEVATE: New Hire Class - Portland, OR June 19, 2013 12:00 PM - 1:00 PM PDX Monthly Luncheon: Assistance/ Companion Animals

June 25, 2013 8:00 AM - 12:00 PM ELEVATE: Electrical – Portland, OR June 25, 2013 1:30 PM - 5:00 PM 1st Annual MWV Putt-Putt Golf Tournament Salem, OR

ACE Committee members on a job well done, and thank the committee chair, Barb Casey of Kennedy Restoration, and co-chair, Susan Sands of CTL Management – Thank you both so very much. Your devotion to the ACE Awards, the Association, and the Industry is paramount. One of the hardest things for any Association to do is to continually recruit and foster people to fill the shoes of dedicated volunteers such as Barb and Susan. Multifamily NW is very fortunate to currently have a strong group of volunteers but many of those volunteers are the same people that were volunteering 9 years ago when I became involved with committee work at the Association. We need to get some new blood coming up through the ranks. With this need in mind, I make the



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following plea: I ask that those of you holding Managerial positions within the multifamily industry encourage your ACE winners, nominees, and other up and coming star employees to get involved in Multifamily NW. The commitment to volunteer on a committee is little more than one hour per month. The exposure to the committee process, networking, and volunteerism is very valuable for any employee that you wish to help develop. Their involvement will help build devotion to you, your company, the Association, and the Multifamily Industry. Please consider it……it can only make us all stronger and better.

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6 Questions ...continued from front page erate around 6-8%. For the individual experienced investor, this market has tremendous upside in value with purchasing a rougher property and transforming it into a stable building. TL: How about Portland? What is your forecast for the next couple years? JC: We have been operating in Portland for 9 years and the market is strong. Investors have a high demand for rental properties and there is a low supply of buildings. This situation should remain the same well into 2015, and rents should be increasing annually. Vacancy rates are historically low in this area, around 3.5%. Portland and Salem are great areas for apartment ownership due to this dynamic. What we are currently seeing is developers building new class A apartments with high rents. As the new projects complete, the market will dilute with the renting demand. In select markets, apartment investing will still be a solid choice with good returns. As new projects complete and demand higher rents, the class B and C properties will demand increases in rents as well.

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TL: If you could give a couple of key pieces of fundamental advice to new or prospective apartment investors, what would they be? JC: My advice is to make sure that you ask the right questions of anyone that you choose to work with. Ensure that they have experience and are experts in the multifamily industry. Buyers buy on returns and sellers sell on price. However, if you are a seller, be realistic with the sale price. If you are told your property is worth an extremely high price and are offered lower commission than usual, the broker is probably desperate for deals. Beware of this tactic, and get a second opinion. Brokers often try to buy listings by over-pricing the property, which only hurts the seller with lost time and a negative marketing impact. TL: What advice would you give veteran investors?

JC: Most veterans know this, but work with experts and respect quality work and confidential information from brokers. If you feel that your broker only calls you when he needs you to sell, call other firms to build more relationships. A broker/client relationship should be year-round and offer many other services to the client. TL: What advice would you give to prospective sellers to ready their properties (physically and/or financially) for sale? JC: The best advice I can give is to attend our seminars on this exact topic. You should be communicating with your broker year-round so that


June SWV Invites th 20 You To... Monthly Luncheon First Appearances with Aaron Matusick Multifamily NW (Formerly MMHA) Lunch: 12:00PM to 12:30PM Class: 12:30PM to 2:30PM Hilton Eugene & Conference Center 66 East 6th Avenue Eugene, OR 97401

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President • Jim Straub Vice President • Michael Steffen Secretary • Scott Smith Treasurer • Pat Costello Board Members: Dennis Casady, Dennis Chappa, Robei Ellis, Devin Gates, Eric Hall, Tia Politi

A Message from Your President … We value your membership. In order to allocate Rental Owners Association of Lane County resources to provide the most effective assistance to you, we would like to know what benefits are of most value to you. On pages 15-20 in our newsletter, you will find our 2013 ROA Member Survey. Simply complete the survey, tear out pages 17-20 in our newsletter at the perforations, fold in half, tape where indicated, add a stamp and mail. For the convenience of those members who prefer an electronic format, simply go to and complete the survey online. Your completed survey will entitle you to an entry in our drawing for a free one-year ROA membership! Please note that if you wish to be entered in the drawing, you must list your name on your survey. As you’ll read in the Legislative Update on page 21 in our newsletter, we are pleased to let you know that Senate Bill 91A, the Landlord Tenant Coalition “Omnibus” Bill, passed the Oregon Senate and continues to move forward. We’ve continued to

work with Speaker Tina Kotek to identify for her our concerns and suggestions regarding House Bill 2639, the Section 8 “Housing Choice” Bill. Please watch for legislative updates on these and other issues in future bulletins. As we’ve indicated in the last couple of bulletins, ORHA (Oregon Rental Housing Association) has been working on revising forms to correct inconsistencies and improve usability. Most forms revisions have been released. Our forms committee is in the process of finalizing revisions to rental agreements and we expect to have the revised versions in the ROA office by the end of June. Remember: Forms were not revised because of law changes and you may still use the prior edition of each of the forms. Because of rising costs to us from the state association, we found it necessary to increase our forms prices. (You’ll find the forms list on pages 28-29 in our newsletter.) Please note that the ROA office has a limited supply of full pads of the prior (fully compliant) edition of many of the

forms. The office will continue to sell these full pads of 50 at the current price (prior to increase) until our supply is exhausted. Please call the ROA office at 541-485-7368 if you have any questions. Many thanks to our featured speaker at our April general meeting, Pegge McGuire, Executive Director, Fair Housing Council of Oregon as she presented, “Fifty Shades of Fair Housing: Applying Fair Housing Complaint and Testing Data to Improve Your Business Practices.” Pegge walked us through the fair housing testing process and offered advice on how to ensure that we comply with the law in every step of the landlording process. Remember: Mistakes made in fair housing law can cost you thousands of dollars. Please call the Helpline at 541-242-2850 if you have any questions about a fair housing issue. Our Affiliate Spotlight at our April meeting was Titanium Legal Services with speaker Desiree Williams and we thank Titanium for their generous raffle item. We hope to see you on Thursday, June 27th for the ROA Annual Meeting/June General Meeting. During this meeting, you will have the opportunity to elect members to

the ROA Board of Directors. The following five current board members have indicated their desire to remain on the board and will be on the official ballot for a two-year term: Dennis Casady, Cj Mann, Tia Politi, Scott Smith and Jim Straub. Please join us at the ROA Annual Meeting and cast your vote. Our featured speaker at our June meeting will be Lane County Circuit Court Judge R. Curtis Conover with his presentation, “Making Your Case – A Judicial View.”Judge Conover is a Riverside, California, native who moved to Oregon to attend Lewis & Clark Law School. After joining the state bar in 1988, he worked as a deputy district attorney in Marion and Lane counties before becoming a civil litigation attorney for Liberty Mutual Insurance Co. He has also served as a judge pro tem in the Florence and Cottage Grove municipal courts. Our Affiliate Spotlight will be Devin Gates of All Around Town Property Solutions. We’ll see you on June 27th! Jim Straub, President



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Serving the Eugene, Salem, Albany, and Corvallis Multifamily Housing Industry More than 6,000 Distributed Monthly www. The statements and representations made in advertising and news articles contained in this publication are those of the advertiser and authors and as such do not necessarily reflect the views or opinions of Professional Publishing, Inc. The inclusion of advertising in this publications does not, in any way, omport an endorsement of or support for the products or services offered. The LandlordTimes - Valley is produced monthly and is published by Professional Publishing Inc. An Oregon Corporation. PO Box 30327 Portland, OR 97294-3327. (503) 221-1260 • (800) 398-6751 Copyright 2013. All rights reserved.

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The LandlordTimes - Valley • June 2013



market conditions change, many leasing consultants are eager to use rent concessions and other incentives to entice people to rent at their communities. Yet even when there are few vacancies, it’s hard to break the habit of readily promoting a “bargain,” rather than the value received for the price. The following concern was recently brought to my attention by a property management company:

Q: My leasing staffs have become so conditioned to using rent concessions and other types of incentives at the first sign of an occupancy problem, I think they are actually selling the concessions, rather than the available apartments. Even when we only have a few vacancies, they immediately want to resort to the use of concessions, rather than get creative to sell the value of their product. What can we do to get out of this vicious cycle, especially if this is what our competition is doing? A: This is a very “sore” subject as

concessions are meant to solve the

very problem they create: rent loss. To further add insult to injury, rent concessions and deposit incentives will ultimately devalue a community over time. The rental market goes through cycles, just like everything else. If you teach your employees how to sharpen their leasing skills and offer rewards for NOT using concessions, then you will enable them to “ride out the storms.” You can also network with the competition in your area. If your rents are all approximately the same price per square foot and no one is “giving away the farm,” then everyone will have some “honest” competition. If you lose a prospect to the community down the road, then find out why and figure out what you can do about it. (i.e. If they have an exercise room and you don’t, maybe you can work out a deal for your residents with a local health club, etc.) Quality promotions, like open houses, prize drawings, parties, etc., can increase traffic and boost employee morale. However, rent reductions and low move-in costs will ultimately have a negative impact on your

existing residents and compromise the quality of your resident profile. Sure. You might move in MORE people with all the “deals,” but how long can they afford to stay once the rent goes back up? Higher turn-over affects the stability of the “community” environment you have created, and also increases the “wear and tear” on your apartments. Plus, how will these “shorter term” residents pay to restore the apartment to its original condition on the way out, if they didn’t have to pay a full deposit on the way in? Concessions cannot take the place of skillful leasing. They are merely a “quick fix,” which create problems and challenges of their own. You must invest in quality training and come up with creative incentives to motivate your leasing staffs. In addition, you will have to educate other property management companies in your area on the value of “fair” competition in order to “level the playing field.” This will pay off in higher occupancies and increased revenues for EVERYONE! Are you dealing with a unique challenge or unusual situation at

your community that you would like to see addressed next month? The Secret Shopper would like to invite you to send in your questions, as other people may be dealing with the same or similar issues. - You will remain as anonymous as the Secret Shopper! Please ASK THE SECRET SHOPPER by making contact via e-mail. Your questions, comments and suggestions are ALWAYS welcome! ASK THE SECRET SHOPPER Provided by: Joyce Kirby SHOPTALK SERVICE EVALUATIONS Phone: 425-424-8870 E-mail: Web site: Copyright © Shoptalk Service Evaluations




The LandlordTimes - Valley • June 2013

DZ &


What Were You Thinking Moments!


The summer season is coming and that brings the annual challenges of managing and maintaining air conditioning units, along with resident requests for installing air conditioning units. There is still time, this is your year to be proactive! D: Suzy Leaser received a call from a resident on a 100 degree day that their air conditioner was not working. She also mentioned that they were elderly. Suzy explained to the resident that she knows how that goes, the office air conditioner wasn’t working as well and she couldn’t stand it, so she called A1 Air Conditioning service to come fix theirs. Suzy confessed it was hard to work in this heat. They hadn’t had the air conditioners checked out for the year and prior to summer. Suzy assured the elderly resident that her maintenance team was working on other more important issues at the moment but would get to their work order when they could. Suzy, seriously, WHAT WERE YOU THINKING? There are several problems with your response. As a courtesy, and to better anticipate maintenance costs, you ought to have a policy that your maintenance verify that the air conditioning units are in working order prior to the hot weather. The policy avoids the worst case scenario of multiple residents’ air conditioning units out during a heat wave. Suzy, you have the responsibility to repair or replace an amenity that was original and a part of the lease of the unit. Air conditioning during hot weather is likely to rank as the highest priority to the resident. A resident’s health can be at risk during a heat wave. Residents are how our business thrives and we should provide them with exceptional customer service. Remember, they can live anywhere and they chose to live in your community. Making mistakes in prioritizing repairs can be costly. Local

The LandlordTimes - Valley • June 2013

By Dana Brown and Zach Howell apartment and rental housing associations often offer educational opportunities in this market to learn best practices for work orders and efficient management of your property. Below Zach outlines great practical ideas for allowing the installation of air conditioners. Zach, can you share your maintenance team perspective and how it relates to the office team? Z: Sure Dana, first you ought to have a Summer Preventative Maintenance Schedule (see last month’s article). The maintenance staff should be inspecting and getting the A/C units in order in April or May getting ready for hot summer weather. This preventative approach will indentify which are not working properly and when to order the proper parts or schedule a vendor to repair or replace. Remember that the goal is to be proactive rather than reactive. With regard to A/C’s in general; if the unit was designed into the building (PTAC) or through the wall unit then onsite staff should be trained to repair and maintain the units. If no A/C’s were included in the original design of the property then a specific A/C protocol needs to be established by the property management company. Here are some things to consider: 1. Proper A/C size for the electrical circuit (6000BTU max for most apartment circuits) 2. Proper unit style for window configuration (a top down window A/C will not work in a side sliding window) 3. Who will install the A/C unit (vendor or maintenance staff) 4. How will it be installed (bracket, not attached to building) 5. Proper window void coverage (cardboard, plexiglass, plywood) 6. Who will repair it if it breaks? 7. Who is responsible if it leaks? 8. Who will remove it? 9. Who will store it during the off season (or can it stay up year round)?

Every company will address this complex issue a bit differently. My recommendation is to let outside vendors handle installation and removal in order to decrease the liability of your maintenance staff breaking, dropping or damaging residents A/C units. If you are going to have site staff install and remove then some training should be provided as to how to best perform installation in order to decrease liability to the company and keep the employees safe. Whether you perform this customer service via onsite staff or vendor have a clear protocol including the above items and clear answers up front so residents and management are all on the same page. Your local apartment association may offer forms to cover this situation. D & Z would like to give away free class registrations to our readers from Multifamily NW. It is easy to qualify, just send in a funny story of what were you thinking moments

that we can share in our article and you will go into a drawing to win a free class valued at $125 each. The contest will run through the end of June and the winner will be announced in the July issue of The Landlord Times. Send entries to Dana Brown and Zach Howell have been working and training Managers and Maintenance staff in the property management industry for 20 + years. They are excited to give back and share the crazy stories that can only happen in our industry. We would love it if you would share your stories and “WHAT WERE YOU THINKING” moments with us as well as questions that you need answers to. Dana can be reached at: Zach can be reached at:




Multifamily ...continued from front page Market capitalization rates for the above mentioned transactions have remained between 7% to 8% with a high of 10% and a low of 6.79%. The rents in Springfield are slightly lower than Eugene. Market vacancy factor is slightly higher in Springfield than Eugene. At the time this article is being written there are no new apartment properties scheduled to be built in the Springfield market. Even with the City of Springfield offering


to waive SDC fees, through June of 2013, for new construction in certain designated areas.



If you would like more specific data on any of the above mentioned transactions please contact: Anita Risberg, CCIM at or call 503-559-8513, OmniVest LLC, Commercial & Investment Real Estate.



Trillion ...continued from front page “This building required enough concrete to fill 240 swimming pools. End-to-end, the lumber used would span about 331 miles and the drywall could cover more than 42 football fields. In addition, we will use 204,000 lbs. of granite, 290,000 bricks, more than 7,000 gallons of paint, 1,700 appliances and 3,500 cabinets,” said Bozzuto. “A significant percentage of these construction materials were manufactured in America, with more than 25 percent being sourced within 500 miles of the project site.” “The apartment industry can be a robust economic engine that provides lasting job growth and spending nationwide,” Bozzuto added. “With up to seven million new renter households forming this decade— almost half of all new households—

the dollars and jobs we add to the economy will only grow in magnitude.” For more than 20 years, the National Apartment Association (NAA) and the National Multi Housing Council (NMHC) have partnered on behalf of America’s apartment industry. Drawing on the knowledge and policy expertise of staff in Washington, D.C., as well as the advocacy power of 170 NAA state and local affiliated associations, NAA and NMHC provide a single voice for developers, owners and operators of multifamily rental housing. Apartments and their 35 million residents support more than 25 million jobs and contribute $1.1 trillion to the economy. To learn more about apartments, visit

Would you prefer to receive this publication digitally? Visit and click on “Subscriptions” to subscribe to our online edition



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The LandlordTimes - Valley • June 2013

The Landlord Times - Valley - June 2013  

The Landlord Times is the business journal for the multifamily and rental housing industry in Oregon.

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