MITS Project

If you haven't heard about the special supplement we are working on with the National Multi Housing Council please give us a call. The piece is designed to celebrate the 5th Anniversary of the Multifamily Information and Transactions Standard. In short, this technology initiative spearheaded by David Cardwell (NMHC), and supported by more than 55 member firms, is designed to help the multifamily industry improve operations and reduce costs.

The supplement will feature case studies that demonstrate how vendors and property owners both benefit from systems integration.

Here a great video produced by VaultWare that shows some of the key players discussing why MITS is so important.

In addition to the case studies, review of accomplishments and outline of future objectives, we are excited about the opportunity to deliver the message to a broad industry audience by way of this print supplement. The readers of MFE may not be as familiar with the success of the MITS project or the focused efforts of its member firms.

Trends: Hotel Industry

The front page of yesterday's New York Times Business Section had an interesting juxtaposition of news items.

At the top of the page was the story of another couple who didn't realize that the terms of their interest only loan would eventually change, leaving them on the verge of bankruptcy. Greedy lenders sold them a bill of goods and now they have determined that the American Dream is dead (Loan by Loan, the Making of a Credit Squeeze). I guess people still read this stuff but I don't find it interesting or helpful from a business perspective.

Down below was a profile of Ian Schrager's latest venture with Marriott. Schrager is known for inventing the concept of the Boutique Hotel, an idea that has transformed the lodging industry. He now hopes to take this concept mainstream with the help of Marriott's marketing prowess and strong network of development expertise. Schrager's passion and commitment for the industry is inspiring. Pondering how this concept might translate to the multifamily industry is intriguing.

These are the types of stories that offer valuable lessons for real estate professionals. They keep us thinking creatively about how we will shape our business, regardless of the economic conditions that the market presents to us.

Schrager himself once portrayed the greed and financial despair that we see in today's housing market headlines. He was convicted of Tax Evasion in the Late 1970's and filed for bankruptcy in 2005 due to a hotel deal gone south.

Perhaps this marriage of Marriott and Schrager is exactly what every industry and corporation needs. Sound fundamental business values, an uwavering commitment to customer service and marketing genius coupled with a passionate, creative and driving entrepreneurial spirit. A healthy check and balance on a variety of levels.

The ultimate outcome is still a long way off but I will be rooting for the success story. And more profiles in the business section with a positive takeaway.

Executive Insights: Terry Schwartz

I recently caught up with an old friend who is the former President and COO of the Village Green Companies, Terry Schwartz. Many of you might remember him as Multifamily Executive's, "Executive of the Year" in 1996.

For the purpose of this blog I wanted to ask him a few questions that I am sure he is not typically asked of the trade press. Over his 16 years experience as the President of one of the nation's most prominent developers, managers and builders of apartment communities he has been called on by a good many firms and certainly has had his share of experiences.

Here is the brief exchange:

RB: Based on your experience at Village Green through your current role at Dover Group what would you say that the best vendors do that separates them from the rest in the multifamily industry?

TS: They do what they say they are going to do! They are timely, responsive, accurate, reliable and CONSISTENT!

RB: What were the key factors that you wanted to know before doing business with a company?

TS: ALL OF THE ABOVE as well as high standards!

RB: What advice would you give a service provider looking to enter the multifamily housing industry?

TS: Be able to respond to your customer in a timely manner and with professionalism but most particularly, “do what you say you are going to do.” DO NOT OVER PROMISE AND UNDER DELIVER!!

The message that Terry sends is clear and consistent. If you read between the lines it sounds like he has learned more from his bad experiences over the years than positive ones. Keep this in mind when training sales people, producing marketing materials, considering your after-the- sale support program and designing new product/service offerings.

Relationships are critical in this industry and maintaining high standards will set you apart from the rest.

Media (and non-media) Mix: Part 2

The second key finding from the Harris Interactive Study commissioned by Hanley Wood is that media AND non-media sources are important.

When reader's were asked to rate information sources here are how they stacked up. The percentages indicate a rating of "very" or "somewhat" important.
1. Trade Magazines - 96%
2. Co-Workers or Peers - 95%
3. Vendor Websites - 94%
4. Salespeople/dealers - 93%
5. B2B Web Sites - 86%
6. Trade Shows - 85%
7. Conferences or Seminars - 80%
8. Consumer magazines - 74%
9. Direct Mail - 73%
10. B2B enewsletters - 65%

The takeaway here is not that trade magazines and word of mouth should be pursued at the expense of direct mail and e-newsletter advertising. The research shows that there are many sources that buyers rely on and that there is an opportunity to influence these buyers through a variety of channels.

On average buyers will utilize 5.5 sources when researching a product/service, 4.7 sources when recommending a product/service, 4.4 sources when specifying a brand and 3.4 sources when making a final decision.

As a business media company, we realize that it is certainly more cost effective to reach our market through a website and email newsletters, but if we did that at the expense of our print product we would be weakening a critical touch point.

Each business is unique and requires an independent evaluation of an ideal mix of sources but all most be considered. Ideally they should work as one towards a common goal.

Editorial Awards Part 2: Magazine of the Year

During its annual awards program last night, the American Society of Business Publication Editors (ASBPE) named Hanley Wood’s Builder “Magazine of the Year” in the 80,000+ circulation category. Builder surpassed nearly two dozen esteemed publications including BusinessWeek, PC World, CIO and The Scientist.

We are all extremely proud of this accomplishment because it is symbolic of the tremendous creative talent we have here at Hanley Wood. It also demonstrates the commitment that is made to reinvesting in each and every brand.

The support from our customers give us the resources to make this all possible. The end result is a more engaged audience and a greater return on advertising investment.

Multifamily Loan Survey

In recent discussions with various commercial real estate lenders I have been assured that the residential mortgage meltdown is not having a residual impact on the commercial side. This anecdotal evidence has been confirmed by a survey just released by the California Mortgage Bankers Association.

"California Commercial Loan Delinquency Ratio hits 5-Year Low at .03%. Only 3 loans delinquent out of over 10,000 surveyed."*

Furthermore, none of these delinquent loans are multifamily.

Of the $88 billion of total servicing by the 17 mortgage banking firms participating, $27 billion is multifamily...multifamily represents the segment with the highest volume (31%) of any commercial property type in the state of CA.

That's not to say that delinquent residential mortgages won't have an impact on our industry but I think it is a strong indicator of sound industry fundamentals.

* June 30, 2007 quarterly commercial loan delinquency survey (CMBA).