Maximize NOI

Day 2 of the Apartment Finance Today Conference covered some interesting NOI Building ideas. Since deal velocity has slowed considerably it's time to get back to basics and maximize efficiencies. Lee Harris (Cohen-Esrey), Richard Kelly (LumaCorp), Dave Richitelli (ista North America) and Jeff Kelly (Tucson Realty & Trust) spent some time digging into the multitude of ideas out there that WILL increase NOI if we take the time to get educated.

Some of the topics:

• Credit Cards - reduce bad debt and attract renters
• Revenue Management - manage expirations and realize quick payback
• Green ideas that save money - Lighting, monitoring gas boilers, irrigation efficiencies and submetering
• Trash removal, Low Cost Physical Improvements and Surety Bonds

Focusing on customer service needs to be a core competency of apartment operators. Those with a sound strategy will whether any storm. Especially those caused by speculators who were in the business for a quick hit. This customer service theme was also emphasized in the Keynote by Dr. Tony Downs from the Brookings Institution.

The discussion that took place was lively and participants were enthusiastic about making investments in products and services that offered immediate ROI.

Multifamily looks for long ideas

Day one of the Apartment Finance Today Conference exceeded expectations for me. I anticipated a mixed-bag of murky, market forecasts but overall I found the group to be extremely optimistic and aggressively in search of market opportunities.

AFT attendees feel that we are not out of the woods on the national economy, and don't have confidence in our government's ability to help the matter, but I certainly got the sense that owners and developers have a confident mindset. "Access to capital is challenging, cap rates remain low and more product is on the market now, but we could have big positions in office, industrial or retail right now and be far worse off."

"NOI is slowing but still growing in many markets, GSEs (Fannie and Freddie) are supporting the market's capital needs in a big way, foreign and institutional money has not been frightened off and even 'well-documented' horror stories by the mainstream media, like Phoenix, still have strong fundamentals and growth upside for savvy long term investors."

Make no mistake, not all was cheerful and rosy. Pressing issues like the lack of tax credit investment, job growth and the bulge of multifamily CMBS refinancing needing attention in the next few years were touched on as significant challenges that can create an even more hostile environment for business.

Obviously the folks who attend industry conferences and share best practices with peers are doing the necessary homework to be successful...so maybe I should expect this type of positive inspiration here. Nevertheless it was exciting to watch this very open and engaging dialogue take place. More tomorrow...

Student Housing Application

A recent transaction once again brings the importance of student housing to the forefront. In this deal one of the leaders in leasing systems for student housing, WebRoomz, meets one of the pioneers of multifamily property management systems, RealPage, Inc.

Both of these firms are connected to an extremely active provider/developer of student and military housing, Place Properties, who was profiled in the August 2006 Issue of MFE.

Did Steve pull the trigger on the deal because of my last post? OK, probably not, but I do like what this play offers to customers who are trying to differentiate themselves as a student housing provider, or more importantly an operator who is trying to attract clients in this high-growth market.

We will be watching to see how this application is leveraged against the brand and how the industry responds to this once proprietary web-based system.

Again this is just meant to be another general observation on how vendors in our space are following key trends and serving customers. The transaction is only the beginning but these deals grab our attention and force us to think of the possibilities.

As a sales person I like to think about how I would utilize a new offering like this to serve a customer or re-visit a prospect. As a marketer the story is compelling and would allow for some extremely creative programs. And as a product provider I see the opportunity to build, innovate and integrate. All of this is exciting material to ponder for our own businesses.

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.