When Gables Residential COO Sue Ansel walks into an elevator at one of her properties, she doesn’t just see clean, modern, well-run machinery helping residents get from floor to floor, she sees $80,000 waiting to hit the bottom line merely by restructuring and consolidating elevator and community emergency phone services across Gables’ portfolio of 38,000 apartment units.
Want more? How about accessing current occupancy and turnover levels at 4:30 a.m. every day, or staging risk management vulnerability audits, or planting 200,000 trees in Kenya and Haiti as part of a program that saves $150,000 annually in marketing costs?
All of these strategies, tactics, and ideas were revealed in "Maximize Your Profits, Temper Your Risk," the keynote power panel that kicked off MultifamilyExecutive’s Multifamily Live! Multifamiliy's Rental Rocket virtual event. Joining Ansel in the conversation were UDR senior vice president of property operations Jerry Davis and Pinnacle’s chief administrative officer Ed Wolff.
Here are the top 5 strategies they revealed for delivering a best-in-class apartment operations platform.
1.Modernize Your Technology Platform.
Over the past several years, UDR, Gables, and Pinnacle have all taken strides to revamp and rebuild their operations technologies. At UDR, an online maintenance request system in 2009 led to the development of an online renewals system the following year. Today, the Denver-based REIT has a systems dashboard that allows all UDR managers to drill down into granular property metrics in real time.
“When I get up at 4:30 a.m., I can turn on my laptop and see where I am on budget versus last month or last year; I can look at yesterday’s leasing activity and occupancy and can see turnover or penetration in ACH and service request usage,” Davis says. “It is at my fingertips every morning and in the first 15 minutes of the day, I have a pretty good idea of where things stand, and so does everybody that works for me, so we are in lockstep together on what is important and what the focus should be.”
Likewise, Pinnacle didn’t stop its internal revolution after investing $2 million into a Microsoft Exchange platform, opting to leverage its new IT brawn to change personnel practices and policy-making. “Last year, we rolled out a learning management system, an on-demand blended learning and development opportunity system, and then a talent management tracking and behavioral profile system,” Wolff says.
2.Stay Up All Night.
No longer does business end when the lights go off in the leasing office. Today’s COO is leveraging call-centers, online on-demand services, and mobile computing to allow the next generation of renters to look for apartments, rent them, and access the full suite of account, property management, and maintenance services at any time of day with the click of a mouse. “Our customers are certainly asking us to interact with them in ways that are very different,” Ansel says. “Being available 24/7 is the key to delivering what residents want on an as-needed and as-wanted basis.”
Wolff says the ability to use smart phones as transactional devices will only continue to impact the evolution of on-site apartment management. “Mobile applications are revolutionizing the way we do business: Look at Chase bank, which now allows customers to deposit money via cell phones, or the proliferation of mobile phone boarding passes in the airline industry,” Wolff says. “With leasing apartments, it will be the same. The resident of the future demands real-time responses and services, or they will go somewhere else.”
3.Re-Staff Your Properties.
With technology taking more of the administrative burden off of on-site teams, the time is now to make a commitment to developing a professionalized and sales-oriented management roster. “It is no longer important to have top-notch bookkeeping skills at our properties,” says Davis, who sees a greater percentage of UDR on-site staff coming out of the hospitality, high-end retail, auto sales, and mortgage industries. “All of these electronic initiatives have required us to re-staff our communities with individuals who are focused on sales and service rather than administrative work."
A centralization and virtualization of administrative services and internal policies and corporate documentation at Pinnacle likewise is keeping the front lines focused on closing deals and keeping customers happy. “Ultimately, we are holding our associates accountable at creating specificity as opposed to subjectivity,” Wolff says. “In essence, that means taking administration away from the site so they can focus on creating a resident experience, leasing apartments, and collecting rent.”
4.Get Real About Rents.
With the exception of a couple of Mid-Atlantic markets, the panelists were quick to point out that the apartment industry is still in recovery mode, requiring continued dedication and discipline to pushing rents rather than reveling in rate velocities. “Rental rate recovery versus rental rate growth is an important distinction to make,” Ansel says. “Net effective rental rates at Gables communities hit their peaks mostly around 2007, and with the exception of metro Washington D.C., net effective rents are still below previously achieved highs in every market. So while the percentage increases are welcome, we are still trying to recover previously lost ground.”
UDR is seeing little push back on renewals via its online renewal system, which stores leases electronically and again allows for 24/7 access to a process that takes residents only a couple of minutes to complete. With rent options generated from the firm’s revenue management system, choices take the place of negotiation, keeping rent levels maximized. “We saw effective rents peak in the second quarter of 2008,” Davis says. “New leases are now trending above existing resident rents and showing growth between 1 percent and 8 percent along with a 200 basis point or so premium on renewals, but we are still not back to peak rents except in the Mid-Atlantic area.”
5.Keep the Conversation Going.
Just because no one has quite “figured out” social media yet doesn’t mean that community-building and resident outreach aren’t important. UDR has found great success by building a Facebook-modeled resident networking component into its online resident portal, allowing renters to post profiles and interests or set up smaller flash-events such as hikes and poker games. “That’s linked into our new concierge service that also notifies residents of package delivery or allows them to get a parking pass for a visitor or reserve club house spaces,” Davis says. “The more relationships that our residents make with each other, the higher the likelihood is that they will stay with us longer.”
At Gables, Ansel and her team have revamped and refocused resident outreach via surveys in an attempt to touch prospects and renters at critical points for feedback on improving and optimizing sales and service levels. “It’s an effort to collect data at key decision making moments in the life cycle of a resident,” says Ansel, who adds that Gables targets prospects after a visit, new residents after move-in, residents who have completed a work order, and all residents shortly before renewal. “These are the periods of time where we have the most interaction with residents and have an opportunity to increase their satisfaction, and we might even use the results to create incentive programs for on-site teams.”
Editor's note:For more insight on proactive and profitable multifamily operations strategies (including risk management stress testing, revenue management implementation, and how to gain six-figure marketing spend savings by planting trees), as well as access to on-demand sessions on rents and revenues, social media, mobile media, people management, and expense management, simply log on to Multifamily Live! Multifamily’s Rental Rocket athttp://multifamilylive.com.