How Apartment Companies Make Buying Decisions

By Keat Foong, –Apartments_web31-1298

San Diego—Product and services procurement decisions are made at different company levels depending on the organizational structure of the apartment companies, said panelists at the National Apartment Association 2013 Education Conference and Exposition held in San Diego this week.

Speaking at the session “Selling to Different Ownership Entities,” speakers provided advice to products and services suppliers regarding how to successfully approach, and obtain business from, apartment companies.

As vendors enter into discussions with apartment companies, it is very important that they first understand the buying, authorization and approval structure of the company they are speaking to, said Kurt Sullivan, vice president, property management, at Douglas Allred Co. Sullivan. It is often immediately apparent during discussions whether the supplier is informed about the company he or she is approaching.

Moderator Susan E. Weston, principal of Susan Weston Co., outlined the various ownership structures that could affect the product procurement processes of the apartment company: Owner/managers, who are investor-owners; REITs, who are third-party managers; LLPS and corporations, who have institutional clients; or private owners who are involved in joint ventures. Often, finding out who to approach could be as simple as asking over the telephone or researching the website.

Speakers agreed that very often the C-suite executives do not make the buying decisions. Suppliers often assume that “if they start at the top, they are exposed to all levels of the company,” said Joe Greenblatt, president and CEO of Sunrise Management. “The reality is that I do not have time to dig into every product and service. I am probably the worst guy to speak to.”

If they have been selected by top management, Greenblatt also advised that suppliers should not “swagger into the property” with the attitude that “you have to work with me now.” “That’s brutal,” he said.

There are various reasons apartment companies do not favor a “top down” approach to product and services procurement. One reason is that there is “a lot more work on our end,” explained Melise Balastrieri, vice president, property management, of MG Properties. The top executives will have to meet with the regional manager to secure their support for the decision, obtain feedback from the site level, and incorporate that feedback into the rollout of the product. If there is “influence from the site [in the buying decision], that makes for a much easier rollout for us,” said Balastrieri.

Among the most effective ways for vendors to “get their foot in the door” is to offer free trials. Sullivan described an instance in which a cleaning services provider promised to improve results in one mall that was particularly challenging, and the contract was eventually extended to all malls in the portfolio because the service was performed so well. Balastrieri said that 30- or 60-day trials in some cases worked very well.

Balastrieri also said that email was an effective way to reach her, and that one of the most outstanding ways a supplier caught her attention was to email a point-by-point comparison of the product she was using versus the product they offered. The vendor provided a list regarding how “they do this, and [our product] does that,” she said. “First know what your potential client is using, and then understand how [your product] is better,” she advised.

Liberty Property Trust Obtains LEED Certification for Property in Jacksonville

By Georgiana Mihaila –

salisbury road

Liberty Property Trust announced that its 7259 Salisbury Road building has earned LEED certification from the U.S. Green Building Council (USGBC) under the New Construction rating system.

This recent designation marks the company’s third LEED development project in Jacksonville and it is the seventh LEED building to open in the state. Liberty now has more than 276,400 square feet of LEED certified office space in Jacksonville and more than 775,000 LEED certified space in Florida.

Encompassing 46,400 square feet, the 7259 Salisbury Road Class B facility offers tenants direct exposure to Interstate 95. LEED certification of the 7259 Salisbury Road building—developed in 2012—was based on a number of green design and construction features that positively impact the project itself. These features include: enhanced daylight views, use of FSC (Forest Stewardship Council) certified woods, Low-E High Performance Glazing, Low flow Water Fixtures, high energy-efficient HVAC equipment with special filters and carbon dioxide monitors, a highly reflective TPO roof membrane, as well as low VOC (volatile organic compounds) emitting paints, carpet and adhesives.

“LEED certified buildings are attractive to companies because they offer lower operating expenses and significant cost savings. We project an estimated 20 percent savings in energy costs by using high energy-efficient HVAC equipment and a 50 percent reduction in water usage using water reducing fixtures,” said Mike Heise, vice president and city manager for Liberty’s Jacksonville region. “Sustainable buildings also create healthier work environments for tenants and we will continue to develop LEED properties whenever we are able.”

Liberty has demonstrated its commitment to sustainability by investing more than $1.7 billion in sustainable office, flex and industrial development projects across the United States.

Image via CoStar


New York Parks Now Have Free Solar-Powered Charging Stations

att-street-charge1-300x199By Veronica Grecu – Imagine you’re taking a walk in the city and your cellphone starts ringing. It’s your mom/boss/partner/landlord and you know you absolutely must take this call but that evil “low-battery” message has a different plan. So what do you do, with no chargers around?

Thanks to a partnership between the Bloomberg administration and telecommunications provider AT&T, New Yorkers can now enjoy improved connectivity in their day-to-day lives. The “AT&T Street Charge” initiative has provided 25 solar powered charging stations located across all five boroughs where people can charge their cellphones, tablets and other mobile devices. The first solar charging units were installed in Riverside Park and Union Square in Manhattan, and along the Pier 1 promenade at Brooklyn Bridge Park.

AT&T teamed up with solar technology company Goal Zero and Pensa, a Brooklyn-based design firm, to create these seven-foot tall poles, each of them featuring three, 15-watt solar panels on top and offering iPhone 4 and iPhone 5 connections, microUSB ports for Android and Windows phones and regular USB ports for other devices. Each solar charging unit is able to fully charge around 30 mobile devices before running out of power and can be used free of charge by anyone, no matter what telecom company they use. According to Mashable, the poles are equipped with 168 watt-hour batteries, which allow the chargers to operate for days even if the weather is bad and there is little or no exposure to the sun.

The “AT&T Street Charge” initiative took shape naturally after Superstorm Sandy left large residential areas in the city with no power for several days and the telecom company stepped in with commercial generators and pop-up cellular service that allowed users to juice up their devices and communicate. The 25 solar charging poles will operate in various locations across New York City as a test until this fall and—if they prove to be a success—the initiative will be expanded to other major cities.

Images courtesy of AT&T

Sunbelt Denizens Creating Rental Units

Las-Vegas-Homeby Jack Kern 

Sun and fun, how can you possibly get that wrong? Of all the places you can go to get away from it all, two are now bringing it with them. Both perennial favorites of the rental cognoscenti, Florida and Nevada, made the news again for having big gains in foreclosure activity. Foreclosures are becoming synonymous with accidentally creating rental units. It works something like this: House originally bought for $350,000, great neighborhood, nice area… except the over-extended buyer can’t afford it. House goes into foreclosure (Notice of Default sent) and the homeowner then has a choice. Number one, open the envelope, number two, start packing, number three, stick it out with an attorney who promises they can string this along for years and last but not least, number four, agree to a short sale. A short sale is, when the stars are aligned that the owner, the bank and the outstanding creditors on the property all agree the owner was never able to afford the home in the first place and selling it fast is the best solution. So now the transfer (sale, really) of the deed in lieu of foreclosure means that the $350,000 home might end up costing some lucky buyer 20 percent less, or $280,000, which pleases the OCC but upsets the neighbors, who stuck it out with big mortgages and dropping values. So where can you take advantage of this surf and sand miracle? Why Florida and Nevada of course. (Funny you don’t see that in the tourism brochures.)

According to recent reports, Nevada foreclosures are up an astounding 81 percent on a year over year basis and Florida, everyone’s poster child for sun tan lotion and waxed surfers was up 20 percent from last month and 12 percent from a year ago.

In many communities, the ability to acquire properties at substantial discounts (up to 50 percent off in some places) is much less likely now than it was even a year ago. Currently the average discount (also known as the “sucker premium”) is only something close to 15 percent. What does happen with alarming regularity is that many of the foreclosures are being rented out based on the investor’s perspective that the home is really worth much more and they’ll sell when the time is right. So the fundamental difference between speculating on foreclosures and gambling becomes pretty clear to me. At least a gambler understands the risks.

Jack Kern is the research editor for Multi-Housing News and  Commercial Property Executive. He has covered foreclosure issues since 2007 when it was discovered that the vast majority of homes sold during the equity investment boom were bought by speculators (gamblers) who had some cash, not a lot of common sense, occasionally sold out of their properties profitably and then not learning their lesson bought again and lost it all. As Jack said, “statistically speaking, these are my people.”

6 Ways to Appeal to Helicopter Parents

byJessica Fiur  –

 It’s a bird! It’s a plane! It’s that handsome guy playing Superman in Man of Steel! (Just got whiplash on that one.) Nope, it’s a helicopter…parent. Loads of them, actually. And they’re everywhere.

You’ve heard of them, right? It’s that new set of parents who love their babies so, so much and just want the best for them, even though little Sam and little Matilda are now in their 20s. Before, these parents would complain to schools over every little infraction. Then, they came to job interviews with their kids. And what about when Sam and Matilda land that job and are ready to leave the nest? Well, mom and dad are right there with them, looking at amenities and asking a ton of questions.

I choose to take things literally.

Are you appealing to these helicopter parents?

Well, you should. Because without mom and dad’s approval, that lease will probably not get signed by that potential resident.

Here are some ways to appeal to helicopter parents who come with their kids to look at an apartment.

Highlight safety. Parents want to make sure that their kids will be safe. Do you have a 24-hour doorman? What about a video security system or an alarm system in the apartments? Or Home Alone-style booby traps to catch intruders? Let the parents know how safe their children will be in the building, and that no strange men will be able to waltz in without verification (much to the dismay of all those daughters out there).

Talk about how quiet it is. Their kids are going to need a good night’s rest. This isn’t the frat house, and the renters are not there to party with their neighbors (or imitate a zit). Make sure to mention (in your indoor voice) how quiet the apartment is.

Mention how close it is to transportation. Mom and dad want to make sure that Sam and Matilda are able to easily (and safely—never forget safely) get to work. Talk about how close the bus stop or subway is (and how well lit the stops are), or if there’s a garage, also mention how you need to be a resident to enter it (and also how well lit it is). Light is apparently catnip to worried parents.

Reassure them that maintenance requests are taken care of quickly. Let everyone know how to handle maintenance requests, and how quickly they’ll be addressed. That way no one has to worry—or worse, try to fix it themselves and make it worse—about what to do if something breaks.

Talk about the gourmet kitchen. We wouldn’t want the resident to starve! Make sure you point out the apartment’s great kitchen, and talk about all the [healthy] cooking he or she could do there? I mean, sure, the refrigerator will probably end up being filled with beer, the freezer vodka, and the drawers take-out menus, but that’s neither here nor there.

Explain how easy it is if parents need to pay rent. The renter is an adult. Of course. But money goes quickly when you’re…paying a lot of overdue fines for all the library books you’re devouring. Yeah, that’s it. Anyway, on occasion, the renter might need mom or dad to help them pay the rent that month. If there’s an online system, is there a way for parents to sign in as well? Or do you send a bill every month well before when rent is due, so the kids can know it’s time to call the parents and beg to send a check? Explain the system so that everyone knows how it works. Also, in the same vein, let the parents know if it’s easy to become a guarantor, if necessary.

How else can you appeal to helicopter parents? Have you ever seen this when you’re showing an apartment?

-Jessica Fiur, News Editor

Image credit: KateChris

Carmel Partners Names David McWhorter Head of Investor Relations

San Francisco—Effective July 8, 2013, David (“Mac”) McWhorter will join the real estate investment management firm of Carmel Partners as managing partner, head of investor relations, the firm announced today. McWhorter will be based in the firm’s San Francisco headquarters.

In this capacity, McWhorter will also serve as a member of the firm’s investment committee. Carmel specializes in multifamily real estate investment strategies in the U.S. and currently manages approximately $5 billion in gross asset value through a series of four closed-end funds.

McWhorter has over 30 years of institutional real estate investment experience. He comes to the firm from AEW Capital Management, where he served for over 10 years as a director in investor relations. McWhorter was directly responsible for building and maintaining strong client relationships with U.S. institutional investors, including public and corporate pension plans, endowments and foundations.