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Commercial real estate professionals live and breathe capitalization rates. Every trade publication, market participant, and third-party report relating to real estate quotes cap rates for various markets and properties. But ask a group of real estate professionals to calculate a specific property’s cap rate and you are likely to get a variety of answers — despite the simplicity of the formula. If cap rates are widely used and easily calculated, then why does everyone come up with a different answer?
This article looks at the underlying reasons for cap rates variations, ranging from different uses by market participants to different methods of cap rate extraction. While CCIMs are trained to extract cap rates in a certain way, not all market professionals use the same criteria. Understanding how such variables can affect the cap rate and the value of a property is just as important as developing — and using — a consistent method of cap rate extraction. READ ARTICLE
While much of the apartment development buzz is about the amount of new supply being delivered to major markets such as Atlanta, Houston, Dallas, New York, Washington, Miami and San Jose. But the construction pipeline is also extending to smaller markets in the Midwest.
A look at the map below shows that supply is moving inland. (Blue dots represent planned properties; yellow dots denote properties in lease-up and red dots represent properties under construction). While construction is not necessarily decreasing on the coasts, development is increasing in Midwestern cities slow to recover from the Great Recession. READ ARTICLE
Receiving criticism is your chance to show off a rare skill; your ability to take negative feedback well. Believe me, it’s not easy. It takes years of practice and a lot of self-awareness. But you have an advantage. Because of the nature of our business, you get to practice receiving feedback almost daily. You get real feedback from your real customers all the time. You don’t have to wait for an annual performance review or even a survey.
So getting feedback is a good thing, but why do we often react poorly? Easy. People are terrible communicators! It’s true! Most people aren’t aware of their tone or even the impact their choice of words has on their message.
We react poorly for other reasons as well...READ MORE
Innovation in apartment ownership and management is not just software or gadgets. It’s about changing how we think about the amenities and services that fulfill the needs of residents and our investment in the properties. Car sharing is one of those innovations, and the apartment industry is seeing significant advantages in its adoption, driven by resident demand and demographic trends.
Apartment owners and operators across the country, primarily in urban areas, are making car-sharing services such as Zipcar and CityCarShare available on-site for residents and in some cases, also to the public. A variation on basic car sharing, these car-sharing services first became active in “green”-minded communities such as Portland, Oregon; Austin, Texas; Vancouver, Canada; and San Francisco. Car sharing is a sought-after amenity for renters who do not want the added expense of owning a car but still need a car from time to time. It reduces the number of cars on the road and the auto-emission impact on the environment.
In San Francisco, Veritas Investments and its affiliates RentSFNow and Greentree Management, which together control one of the largest apartment portfolios in the City’s urban core, have seen such strong reception to a Zipcar pilot efforts two years ago that they expanded the pool to several communities. Now Zipcar’s largest host in San Francisco, the firm has more than 30 Zipcars in properties that can accommodate the parking, security and access requirements, with more underway. Equity Residential in 2011 launched a program to put Zipcars in 30 U.S. properties, and its website now reports Zipcars in over 100 locations across the country, stating the service offers “outstanding” value to residents. READ ARTICLE
Interpreting a review can be a bit tricky. If your community is like most communities, you get a lot of feedback. This information comes from surveys, reviews, social media, and even face-to-face conversations, so it can be a bit overwhelming. It might even cause your team to lose focus. Sure, there are some residents that point out your flaws in the most honest way possible. But most reviews force you to read between the lines or even piece together the story with analytics. In today’s customer centric world, the real skill is learning how to extract the important information from all the noise. So how do you do that? It’s simple. You define the business problem. You have to start with a little clarity on what you are trying to fix or solve, and if we are honest with ourselves, we all know where we are weak. Defining your weakness and the business problem will help you understand what data and feedback you want to collect. It also helps you understand when, where, how, and from whom. READ ARTICLE
Nearly 5,000 fires take place per day during the summer, which ranks second in fire incidence rates compared to other seasons, according to the United States Fire Administration. Between company cookouts and extra wear and tear on cooling and landscaping equipment, commercial buildings are vulnerable to fire damage.
Cintas Corporation, a provider of fire protection services, offers these six tips to lower your likelihood of a summertime fire.
1) HVAC maintenance: Dust can settle over capacitors and other electrical components and cause tracking faults, which can create fires. Running multiple cooling units together consistently and for long periods of time can result in overloading and overheating, which also presents an opportunity for fires to start. READ ARTICLE
At our Fun 4th event one couple is a pair of Boomerang Renters, that is, they are Baby Boomers who haven’t rented since before their kids were born. Now kids and parents are on their own, and Mom & Dad are renting their “first” apartment home.
They know what I do, so they GLOMMED onto me. Both said they USED to love their apartment home. They still love having their repairs made, all of which are completed within a day. They like the pool and clubhouse, but don’t use it much. They like the layout, miss their big kitchen but like the appliances, and their utilities are reasonable. They have no problem finding a parking place, and though they haven’t met many of their neighbors, they feel comfortable with the neighborhood.
But they are VERY unhappy about a recent management change.
In separate LONG conversations, both expressed angst over the change, which occurred over 5 months ago.
So after all the things they LIKE about their apartment home, what’s the big problem?
CTBUH, the organization best known for its Tall Building Awards, has announced the winner of its inaugural Urban Habitat Award: OMA / Ole Scheeren’s The Interlace in Singapore. The jurors, including Studio Gang Architects‘ Jeanne Gang, praised the apartment complex, which includes communal gardens and spaces on the roofs and in between the apartment blocks, for responding to its tropical context and “integrating horizontal and vertical living frameworks.”
From the Press Release. The Interlace, a residential tall building project in Singapore, has won the inaugural Urban Habitat award from the Council on Tall Buildings and Urban Habitat (CTBUH).
The Interlace is a 1,040-unit apartment complex consisting of 31 apartment blocks, each six stories tall and 70 meters long, stacked in hexagonal arrangements around eight large-scale, permeable courtyards. The stacking of the volumes creates a topographical phenomenon more reminiscent of a landscape than of a typical building. An extensive network of communal gardens and spaces is interwoven with amenities, providing multiple opportunities for social interaction, leisure and recreation – both on the roofs of, and in between, these stacked horizontal blocks.
“The Interlace creatively realizes the potential a tropical environment provides for inverting the ‘towers in the park’ typology in favor of the tower as park,” said Awards Jury chair Jeanne Gang, founding principal of Studio Gang Architects. “By integrating horizontal and vertical living frameworks, it becomes much more than the sum of its parts.”
The CTBUH Urban Habitat Award is newly established this year to recognize that the impact of tall buildings extends far beyond the buildings themselves. The award recognizes significant contributions to the urban realm, in connection with tall buildings. In particular, it highlights projects that demonstrate a positive contribution to the surrounding environment, add to the social sustainability of both their immediate and wider settings, and represent design influenced by context, both environmentally and culturally.
See photo and read article at AMAZING NEW ARCHITECTURAL DESIGN
This means you should be using your reviews as a marketing tool.
Reviews are the new form of advertising. Traditional advertising now has a much smaller role in customer influence. Why? Because the customer experience is no longer our story to package up and present. It’s our residents’ story to organically share.
With the multifamily industry expanding every year, finding strong applicants to fill positions can sometimes be hard. That’s why many companies look to colleges and universities to find interns so that they can have help during the summer.
Rosemary Carucci Goss, Ph.D. Virginia Tech, is a board professor for the property management program at the school and oversees the career fair. It’s here that most students find their internships.
“All students in our program are required to do an internship in the multifamily area,” she says. “The industry is so hungry for good talent that they’ll hire one of our students for a summer work experience even without coursework. They do one internship for credit, report to me, get evaluated, and then they do a [written] report and evaluate their experience with an oral report and PowerPoint presentation when they return.”
Interns must also keep a journal for 160 hours tracking their internship experience.
“From a company perspective, we ask them to treat our students as they would a regular employee and give them a myriad of property management experiences,” Goss says. “We want them to have exposure to everything. The companies that have the most specific internship and gives the student the most variety tend to be the companies the students are attracted to the most.” READ ARTICLE
A rediscovery of metropolitan urban cores and 80 million Millenials beginning to enter the housing market primarily as renters continue to drive apartment demand. In fact, it takes at least 300,000 to 400,000 new apartment homes each year just to keep up. While construction has accelerated in response, many communities still lack sufficient housing options. READ REPORT
This year’s Ellis Benchmark theme is designed to cultivate internal conversations as we seek to understand and train the multi-generational front-line leasing team. Is your current leasing training model speaking to the needs of all employees? Are you prepared for today’s emerging workforce—Generation Y? Is it time for an adjustment in your approach? Join us each quarter of 2015 as we explore new ideas in Leasing Training Content, the Leasing Training Environment, and Leasing Training Delivery. Each topic will be explored. New ideas will be presented. Questions will be answered.
By Misty Sanford
We’re one month into 2015, and we’ve already noticing a few trending topics. One of those topics is customer journey maps. This is more than just a buzz word. With our every growing focus on the customer experience, we think this topic is here to stay.
So what is a customer journey map? It is a framework that maps the resident lifecycle. That’s the easy definition. The more complicated definition is below.
A customer journey map documents your resident and prospect experience from the perspective of their eyes. This helps you understand how your customers interact with you today, and it also identifies improvement opportunities.
That last sentence is the important one. Understanding your customers and what to invest in moving forward is half the battle. We get so much feedback from surveys, social media, reviews, and casual conversations that it can be difficult to know where to even begin! Defining your customer journey map helps you do that...CLICK HERE TO LEARN HOW!
The choice between buying a home and renting one is among the biggest financial decisions that many adults make. But the costs of buying are more varied and complicated than for renting, making it hard to tell which is a better deal. To help you answer this question, our calculator takes the most important costs associated with buying a house and computes the equivalent monthly rent. Click HERE to read the article and view graphics.
Relationship to bring new cutting-edge learning technologies and efficiencies for property management teams.
Grace Hill, the leading provider of online education and learning management solutions for the multifamily housing industry, and LeaseHawk today jointly announced the acquisition of LeaseHawk’s education division. Included in this acquisition, Grace Hill obtains LeaseHawk’s Wings and PLU Learning Management Systems (LMS) and its catalog of online educational courses, creating many new education opportunities for mutual clients.
The companies will partner to also provide Grace Hill and LeaseHawk clients many new advantages. LeaseHawk clients can expand their education program to include the very best up-to-date property management education. Grace Hill Vision LMS clients will benefit from a new integration being developed with LeaseHawk’s Telephone Performance Analysis (TPA) and TPA Recommender Technology. This new capability will improve leasing performance by identifying training opportunities based on TPA results and seamlessly deliver targeted education through Vision LMS. READ ARTICLE
When social media becomes a business initiative, reporting ROI becomes an expectation. A sometimes overwhelming expectation. Unlike traditional marketing, there is almost too much data. The old rules don’t apply, and reporting ROI no longer fits into a perfectly consistent report. It is fluid and we must adapt to the unique characteristics of the social web.
The various social channels don’t even measure the same actions and behaviors! And, what they measure today might change tomorrow with a whole new set of data points. Social media is volatile and that makes the ROI a moving target.
So when you have so much change and so much data at your fingertips, how do you make sense of all of it and choose what to report?
It’s easy. The key is to start with defined business objectives and then track, analyze, and present data that relates to the objectives. No more and no less.
And when you review the data, get out of the mindset of revenue. Of course revenue is important but it isn’t everything. The primary business impact of social media is not revenue. It’s insight that helps you meet your customer experience goals.
I know this probably all sounds a bit frustrating and maybe even vague, so let me clarify with 5 things I like to share in every social media report I create.
Channel reports. Each channel has a different language and a different purpose, so they each need their own report.
How the efforts are generating leads and customers.
Our customer response rate.
Our opportunity response rate.
Reach and virality.
Real Estate Forum’s “Women of Influence” edition is now available. From New York to San Francisco, Real Estate Forum has designated dynamic women leaders in the commercial real estate fields: retail, sales, brokerage, medical, office, land, industrial, boutique, and ground leasing. Real Estate Forum is a division of ALM Real Estate Media Group. READ THE ARTICLE
Welcome to the Second Quarter 2014 Ellis Shopping Report Multifamily Industry Benchmark. Our team continues to deliver the most current and effective tools to help you monitor and evaluate on-site sales and marketing effectiveness, as well as to be able to compare your team’s performance against others in the industry. As your partner, we strive to help you better understand and manage the lead conversion and resident retention processes. The importance of the customer’s perception of their experience with your team and product cannot be ignored. Perceived value as defined by customers creates loyal customer relationships, and customer loyalty is the best predictor of your subsequent strength and growth potential.
For 2014, we are focusing on leasing training for our Benchmark letter.
1st Quarter: The Generational Divide and Leasing Training
2nd Quarter: Does Leasing Training Need to Change?
3rd Quarter: Overcoming Leasing Training Obstacles
4th Quarter: Leasing Training Today and Tomorrow
Last quarter we tackled the topic, “The Generational Divide and Leasing Training.” We concluded with the proven fact that generational values often collide when members of different generations work together. Different generations often have different work values, different perceptions of authority, different responses to training methods, and different views about what is important in life in general. If cross-generation managers and trainers are not prepared for these differences, it can create conflict, poor performance, low morale in the leasing office, and challenges in the training room.
This quarter we respond to the question, “Does Leasing Training Need to Change?” Technique has always been the foundation of most sales training programs, yet it has become more of a challenge to teach the emotional piece – how to connect with customers. Throw Generation Y into the equation, who by 2020 will represent a full 40% of the total working population, and the question becomes a very valid one. The what, when, where, and how are at the forefront of many trainers’ minds today. The trends are changing and shifting quickly. How will your company adapt your training and prepare your employees to successfully compete in this new “experience economy”? Join us as we provide some insight on this topic at the end of this letter. READ FULL ARTICLE
Make the most of your small space with these creative apartment hacks that will have you saying, "Why didn't I think of that?!"
1. Velcro remotes to your coffee table. Things tend to clutter on the coffee table, and chances are you may have more than one remote. Just stick adhesive velcro dots to the backs of your remotes and to the sides of your coffee table. Now you can keep remotes off your table and stowed away. You could also velcro remotes to your nightstand in your bedroom.
As a renter, it's easy to feel pressure to buy. Owning a home means you can start building equity and cash in on tax breaks. But in some parts of the country, it can take quite awhile to break even on a home purchase, making it more financially advantageous to rent for a few years.
Based on Zillow's breakeven horizon - the number of years it takes before owning a home makes more financial sense than renting the same home - here are the top 15 cities where renting rules.
READ THE FULL ARTICLE HERE
The Federal Fair Housing Act (FHA), as most multifamily professionals understand, serves to protect the rights of all individuals and prohibit discrimination when seeking, securing and residing in housing. The Americans with Disabilities Act (ADA) protects people with disabilities in a similar manner. Multifamily professionals whose employers provide consistent and thorough training also understand that fair housing laws go beyond federal laws and often include additionally protected classes at the state or local level. They also understand that ignoring the ADA makes their company vulnerable to allegations of discrimination.
If the law is clear, why are there so many discrimination claims?
While numerous claims of discrimination continue to surface throughout our industry–in 2011, there were more than 27,000 complaints of fair housing discrimination according to multiple federal authorities–most multifamily professionals do not intentionally discriminate. Rather, discrimination lawsuits happen, in many cases, because people make honest mistakes.
It’s not just small businesses who goof; even big companies are known to falter when it comes to these laws. In fact, despite spending millions of dollars on the Fair Housing Accessibility FIRST program to train architects and builders about fair housing responsibilities, the National Fair Housing Alliance recently reported that “developers continue to design and construct obviously inaccessible apartment buildings that do not meet the Fair Housing Act’s standards.”
Is it logical that a developer would spend tens of millions of dollars to knowingly build a community that violates ADA requirements, especially considering violations not only damage reputations but also require a significant amount of time and money to repair? No, of course not. Construction design flaws, such as incorrect thresholds, inaccessible outlets, narrow doorways or lack of reinforcement in bathroom walls to support bars, are most often recognized as unfortunate errors, not intentional attempts to prohibit people with disabilities from enjoying an apartment home. They’re mistakes–plain and simple.
In another way, instances exist where good sales skills can be misinterpreted as discrimination and result in another form of claim. An example of this may occur in relation to a simple rent premium on an apartment for features or upgrades that are not clearly communicated to prospective residents or testers. For instance, if a consultant shows a tester an apartment with new grey carpet to complement the furniture the tester described and the rent is $10 more per month than another apartment without new carpet, issues can surface if the cost difference is not clearly communicated. While the leasing consultant was simply trying to help the prospective resident find an apartment that would best meet their wants, the increased rent may be misinterpreted if the tester is a member of a protected class. In this instance, it would be important to fully explain why the premium was applied. Otherwise, it could seem as if the protected class tester was quoted higher rent. Documentation and awareness are the keys to avoiding these types of mistakes.
How can these mistakes be avoided?
To avoid costly fair housing mistakes at your community, turn up the heat on your fair housing education through training, heightened awareness, and increased dialogue.
First, everyone who interacts with customers must be trained on the importance of these laws and the impact violations can have on a community. That means education is crucial for all client-facing employees, including leasing, management, and maintenance personnel. If they talk to the public, they need to be trained. Furthermore, if your company is involved in construction and development, anyone working on that side of the business should become intimately familiar with ADA requirements to ensure the housing you build is accessible to people with disabilities.
Second, increase your awareness of discrimination cases occurring both in your area and throughout the country. It’s important to keep your eyes and ears open and tune in to current events and developments that are unfolding around you. Fair housing testers sometimes conduct a similar type of test at multiple communities. For example, the National Fair Housing Alliance filed charges against the owners of three apartment communities in South Carolina alleging discrimination against prospective residents who are deaf or hard of hearing. The January 2014 charges were filed as a result of a national undercover investigation involving apartment communities in cities including Charleston, SC, Savannah, GA, Atlanta, GA, and Austin, TX. The charges cited instances involving repeated call hang-ups and contradictory information when the undercover investigators called numerous apartment properties using relay service to speak. You can learn more about this case here:
This example case illustrates that what happens to your neighbor today—whether across town or across the nation—could happen at your community tomorrow. Watch local and national news sources, set up Google alerts to funnel relevant news directly to you, and address events like this with your team so that everyone in your workplace is informed and prepared.
Third, talk with your teams about discrimination prevention. Fair housing awareness shouldn’t be just an annual event. It should be an ongoing topic of conversation around your workplace. This type of ongoing dialogue can ensure that these issues remain at the forefront of all team members’ minds which, in turn, will help your company keep its commitment to upholding the Fair Housing Act and Americans with Disabilities Act and providing equal housing opportunities for all residents and prospective residents who meet your qualifications and choose to live in your community. If you hold recurring staff meetings, for instance, make anti-discrimination one of your regular discussion points. Share fair housing news items. Remind associates of your commitment to serving all residents in a fair, equal, and consistent manner. You could also use these meetings as an opportunity for a Question and Answer session on tricky or confusing customer service situations that could arise, and help prepare your teams to respond appropriately. Here are some examples of such discussion questions:
Q: When should you discuss the pet policies with a prospective resident who has stated that they will be bringing a service animal when they move in?
A: Never, because a service animal is not a pet and therefore is not subject to your pet policies. Your pet policies would warrant discussion only if this customer has additional animals that are pets.
1.A couple inquires about renting at your community. The woman is visibly pregnant. When considering your occupancy guidelines, how many people do you consider this household to consist of?
2.The ‘familial status’ protected class of the Fair Housing Act dictates that you do not take a woman’s pregnancy into consideration when determining household size. Therefore, this household consists of two people. Do not ask questions regarding when the baby is due or whether the child will reside with them.
3.A prospective resident who uses a wheelchair has asked about your available two-bedroom apartment homes. All of your available homes are on the second floor. What do you tell them?
4.Provide the same leasing information for this customer as you would for any prospect, regardless of disability. Tell them the location of all available apartment homes and let them decide if any meet their needs.
5.A phone call comes in and the caller identifies himself as a TTDY or relay operator. What is that? And what do you do?
6.A TTDY operator assists hearing-impaired individuals with phone calls. Follow the operator’s instructions and answer their questions. Conducting a conversation with a TTDY operator can be a bit disconcerting if you’ve never done it; you might share this clip with your teams to help them prepare: http://www.youtube.com/watch?v=3hMj8Y0EFlc .