Saturday, December 18, 2010

10 Markets to Watch

From the December Issue of Units Magazine.
by Jeffrey Lee

Participants in the Emerging Trends in Real Estate 2011 survey believe the 24-hour cities will always dominate and outshine secondary markets.

This year, the top markets selected by survey respondents offer no surprises. Washington, D.C., pulls away from the pack, followed by San Francisco, Boston and Seattle, as the pre-eminent gateway cities. Houston and Denver solidify rankings, and respondents show faith in Southern California’s resiliency, despite recent setbacks.

While ratings improved for markets from coast to coast over 2010’s results, the gap between top and bottom continues to widen. More than 60 percent of surveyed cities still fall below “fair” ratings for commercial and multifamily housing investment prospects. Following is a snapshot of the top 10 markets ranked by survey respondents:

Washington, D.C. Never far from the top, the nation’s capital will hold onto its top ranking as long as the economy labors. The federal government never downsizes, while lobbyists and consultants swarm legislators and agencies hoping to influence or stop regulatory changes. All the activity cushions property markets and attracts investors. No market benefits more from core buyers’ recent flight to quality, driving prices back up.

New York. TARP and Fed funds directed at banks helped financial markets and eased job cuts, triggering the biggest
ratings jump for New York. Apartment rents rebound along with coop/condo prices, which registered only minor drops in top neighborhoods.

San Francisco. The country’s most volatile 24-hour market, the City by the Bay now offers investors excellent near-market-bottom buying opportunities, particularly in apartments and hotels. The market also sidesteps some of its state’s fiscal mess, performing better than Southern California. Tech and life science industries flourish around top-flight universities (Stanford, UC Berkeley), help attract brainpower, and sustain expensive regional living standards.

Austin. A smaller Texas market that scores high ratings. Survey participants note, “Everyone wants to live in Austin.”

As the state capital and home to a major university (hook ’em, Horns), Austin is one of the few cities in the Sunbelt with growth restrictions.

Boston. This venerable 24-hour city registers high marks for livability, controlled development, and a highly educated labor force, but lacks economic vibrancy. Apartment rents will track back up as expensive for-sale housing keeps tenant demand high for multifamily units.

Seattle gets a boost from in-migration to the area, adding 160,000 new residents since the recession.

San Jose aligns with San Francisco gateway benefits, including a flourishing tech and life sciences industry.

Houston is expected to emerge stronger from the recession than most cities, creating more real estate demand.

Los Angeles remains an attractive location with Southern California serving as the most important gateway to the Pacific Rim and Latin America.

San Diego tracks closely to Los Angeles with its desirable climate.

Tuesday, December 14, 2010

Apartment Industry Study Explores Smoking Rates Among Employees

Apartment Industry Study Explores Smoking Rates Among Employees

A group of multifamily housing property management industry human resource (HR) professionals are working together to decrease the number of smokers within the apartment industry workforce and promote healthier lifestyles for those employees and their families.

Towards this effort, a small work-group comprised of HR professionals at AMLI Residential, Archstone, Milestone Management, Equity Residential, Banner Property Management, Waterton Residential and Post Properties collaborated with Lockton Companies, an employee benefits consulting firm, to develop and conduct an industry-wide survey to evaluate current smoking prevalence rates, the types of smoking cessation assistance programs offered, and methods for incenting participation in these programs.

The survey was conducted September 2010 with report findings (and a companion white paper) released Oct. 29, 2010.

Survey Participants. Forty-seven companies representing in excess of 30,000 covered employee lives completed the survey.

Key survey findings:

• While most companies didn’t track tobacco use in their workforce, for the 34% that did, their results mirrored the U.S. adult population at large with a prevalence rate of ~21%.

• Just over half the respondents (53%) reported offering some form of tobacco assistance as defined in this survey.
• 36% of those not currently offering any program elements plan to offer at least one next year.

• 45% offered tobacco cessation assistance designed to help people successfully quit tobacco use (i.e., Free & Clear, quitnet.com, state-based tobacco quit lines, American Lung Association, wellness vendor, EAP or medical carrier based program).

• Of the 25 companies offering some form of tobacco cessation assistance as defined in the survey, 36% provide a contribution incentive for non tobacco users, and 76% provide coverage for smoking cessation drugs and/or nicotine replacement therapy (NRT)

• None of the survey respondents said they offered other types of incentives for non-tobacco users (i.e., gift card, one time paycheck contribution, FSA contribution, HSA/HRA contribution).

Those interested in obtaining a copy of the survey results and white paper can contact Leslie Silverman from AMLI Residential at 312/283-4885 or lsilverman@amli.com or Ken Wexler from Lockton Companies at 312/669-6787 or ken.wexler@lockton.com.

Sunday, December 5, 2010

2011 NAA Call For Entries

NAA's PARAGON Awards

Submission Deadline is Friday, March 18, 2011.

The NAA PARAGON Awards recognize excellence and leadership in the rental housing industry. These national awards celebrate that builders, industry professionals and affiliated apartment associations make unique contributions to our industry. For the winners, a PARAGON award represents a milestone along the path to personal and professional achievement. For our industry, the winners demonstrate characteristics that benchmark success.

Winners will receive their PARAGON award during the 2011 NAA Education Conference & Exposition held June 23-25 in Las Vegas. They will also be featured in the September 2011 issue of units magazine, NAA’s monthly publication that reports on the apartment industry.

All NAA members are encouraged to submit their entries representing models of excellence for our industry in one or more of the following categories. Click on the award categories below for more information, including the award application form for each:

Affiliated Association Awards
  • Communications
  • Community Service
  • Education
  • Government Affairs
  • Membership Development

Builders, Owners and Developers

  • New (less than 5 yrs) - (2)
    • Small (up to 150 units)
    • Large (more than 150 units)
  • 5-20 yrs - (2)
    • Small (up to 150 units)
    • Large (more than 150 units)
  • 20+ yrs - (2)
    • Small (up to 150 units)
    • Large (more than 150 units)
  • Green - (1)
  • Specialty any category - (1)
    • Affordable
    • Military
    • Student

NAA Individual Achievement

NAAEI Individual Achievement

NAAEI Designate/Certificate Holder Awards:

  • Certificate for Apartment Maintenance Technicians (CAMT)
  • Certified Apartment Manager (CAM)
  • National Apartment Leasing Professional (NALP)
  • Professional Designate of the Year

Friday, December 3, 2010

Raise Rents, But Offer An Early Lease Discount

None of us want to pay more money for the apartment or house we are renting. Most of us have trouble increasing our customers’ prices when we ask for a new renewal commitment. One of the things I’ve learned is that perception is reality. So the key to raising the rents while keeping resident retention high is to help your residents perceive that they are getting a bargain.

The Programs: Three months before their lease renewal date, send them a Rent
increase/ Lease notice. Include an early bird incentive to get them agree to the rent increase and sign immediately, thereby preempting a search for a new place to live. For example, let’s say you are trying to increase your rate by 5 percent on an $800-per-month rental unit, which comes out to $40 per month. Send them a rent increase for 8 percent, but offer them a 3 percent discount if they come and renew the lease within the next two weeks, a 2 percent discount if they come in within four weeks, and a 1 percent discount if they come in within five weeks.

Design the letter to outline the savings for each percentage offer. For example:
· The 3 percent discount would equal $24 per month or $288 per year.
· The 2 percent discount would equal $16 per month or $192 per year.
· The 1 percent discount would equal $8 per month or $96 per year.

The residents perceive that they are saving $288, while you’re increasing revenue by $480 per year. The resident may ask for the full percentage of savings during the course of the three months, but that’s okay. You still get the same perception and same revenue.

The keys to success are to design and test different initial rent increase notices, incentive pieces, and reminder cards announcing the end of another discount.

Projected Results: You will be able to test this program on a monthly basis and determine its net effect. The risks are small, but the rewards are large. One community that implemented the idea received a 65 percent early bird signing response rate!

Contributed by Rick Brown
http://www.smmonline.com/