If you ask most apartment owners around the country how things are going, you'll probably get a sigh. Sure, rents are slowly pushing upward in many markets, but concessions remain. “In most markets there's some upward rent pressure,” says Chris Wheeler, CEO of Gables Residential, a Boca Raton, Fla.-based REIT that operates in Florida, Georgia, Texas, Washington, and California. “But to suggest it's a strong, robust rebound would be wrong. There's just no further downward pressure.”
But there have been signs of hope this spring.
One reason many owners and managers believe performance finally will improve this year is the increased traffic of prospective renters in markets around the country. “We're seeing traffic pick up across the board,” says Martha Carlin, vice president and director of operations for Richmond-based REIT United Dominion Realty Trust, which saw year-over-year improvement in January and February.
Even in the weak Midwestern markets, Steve Matre, senior regional manager for Banner Property Management in Northbrook, Ill., is seeing more would-be renters coming in the door. “We're testing at all of our properties,” Matre says. “Traffic is good in all of our markets. We would like to try to capitalize on that and test our rents as much as possible.”
While the number of prospective renters visiting apartment properties has increased, the means of tracking them have also improved. “Some of that is the improvement in economy,” Carlin says. “Some of it's increased focus for us in tracking traffic and trying to understand where our better-qualified traffic is coming from.”
To drive this activity, many owners and management companies are looking to the Internet. Big-time owner and manager AMLI Residential has invested in its Web site, moving to features such as real-time pricing. “The advertising guides contributed to traffic, but the Internet and how quickly you're responding to the Internet certainly is one of the bigger avenues most companies are exploring,” says Steve Hallsey, CEO of AMLI's management company, who says the Chicago-based REIT is seeing more prospects this year.
Still, the Web represents only one of many tools a multifamily company may use to up both in-person and online traffic through a leasing office. UDRT, for example, will send fliers promoting its apartments to people who live in a property going condo. Traffic strategies “are really specific to the market,” Carlin says. “San Francisco and San Jose are technologically savvy markets, and we do a lot of things over the Internet that just may not work in Greensboro. That might be a market where we focus more on fliers or direct mail.”
But it remains the job of the leasing agents who must transform this higher volume of customer traffic into better occupancy rates. To help its associates achieve that, UDRT has introduced new sales manuals, tracking and leasing tools, and training programs. “Two years ago, we rolled out a new leasing school,” Carlin says. “Then, in the middle of last year, we rolled out an advanced leasing school, which is leasing sales training. We can actually see where people who have gone through advanced training have better closing stats.”
At AMLI, technology plays a key role in converting prospects into residents. Hallsey believes AMLI's new online effective pricing model, which gives the company a market-rate price that is updated daily without concessions, helps it close the deal with prospective renters. “There is a very sophisticated renter out there,” Hallsey says. “If you are given a special, anytime you walk out you question whether you receive the best special available. With our system, there's no question whether you got the best special available. There are no negotiations that are necessary.”
But regardless of whether companies rely on cutting-edge technology or enhanced selling techniques, their objective remains the same: attract more visitors and turn them into residents. At UDRT, the results have been worth the effort. “Our occupancy is the strongest it's been in a number of years,” Carlin says.