Western Real Estate Business

AUG 2018

Western Real Estate Business magazine covers the multifamily, retail, office, healthcare, industrial and hospitality sectors in the Western United States.

Issue link: https://westernrealestatebusiness.epubxp.com/i/1012778

Contents of this Issue


Page 31 of 42

www.REBusinessOnline.com Western Real Estate Business • August 2018 • 29 SERVICE-ENRICHED HOUSING MODELS CAN POSITIVELY IMPACT ROI Service-enriched housing platforms can be great for developers, but they can be challenging to implement. This is where a third-party provider can be invaluable. By Flynann Janisse T he "build-ver- sus-buy" dis- cussion hap- pens at just about every point during the real estate cycle. Executives, want- ing to be fiscally re- sponsible, task their teams with discern- ing if it would be most cost-effective and customer-friendly to leverage internal resources for a need or out- source by engaging a third party. For those in the business of housing, this debate takes the form of everything from a concierge service at a luxury high-rise downtown to federally man- dated programs in affordable com- munities. Finding an organization that can be a true partner to deliver life-enhancing resident services not only makes a meaningful impact on residents' lives, but stabilizes commu- nities for owners and property man- agers, allowing the asset to perform better financially. Benefits of Stable Tenants Residential communities all have similar challenges when it comes to cost containment. Tenant churn has a significant impact on the bottom line. Independent studies confirm that properties with resident services out- perform those without resident ser- vices in the areas of vacancy loss, legal and eviction costs, security patrols, bad debt write-offs, marketing con- cessions and operational costs. These costs may be significantly managed, if not altogether eliminated, if residents have access to services that address their needs. Our internal research strongly suggests that partnering with a third-party service provider may net positive financials for an asset. For example, a 250-unit community can yield a return on investment (ROI) of 138 percent over a three-year period by having an on-site resident services coordinator. Time Saved is Money Saved Many property managers and main- tenance teams already have their plates full with regular duties. A services pro- gram means fewer interruptions. A true resident services program allows property managers to focus on re-leas- ing, versus sifting through dozens of new applicants. Maintenance person- nel have the option to improve curb appeal, versus re-painting the door frames in units multiple times a year. This is especially true for communi- ties built using the Low-Income Hous- ing Tax Credit (LIHTC), or leverage Housing Choice Vouchers, as strict adherence to the assigned regulatory agreement is paramount. Just as prop- erty managers must keep diligent re- cords on income qualifications and Fair Housing guidelines, so, too, must resident services providers. Records of what programs were provided, who attended and what outcomes resulted are all items that can be managed by a third party. Each state agency audit is different, and failing an audit may have disastrous consequences. For other multifamily properties, the time benefits are equally as tan- gible. Amenities should be used and designated space should meet resi- dent's needs, as advertised. Seniors should have regular, planned events fostering a sense of community with a focus on health and nutrition. Youth should be engaged in productive ways, reducing petty vandalism and nuisance complaints. Working adults should know their kids have a re- source to turn to for connectivity and advancing life skills. Residents should be able to embody the sense of home and opportunity. A Right-Sized Solution Not all communities can support, or even need, a sophisticated rollout of programs. Similarly, resident servic- es are not a panacea for a struggling community. The benefits of finding a partner to walk through the process of examining the financials, surveying residents and interfacing with owner- ship to determine desired outcomes are numerous. A developer striking out and independently offering ser- vices may run into several pitfalls, while an experienced partner already has best practices. For example, if your team hastily organizes a movie night and no residents attend, was the value proposition of the property enhanced? Or, did it simply add more work onto the property manager or other team members? Advances in mobile and wireless technologies mean there are cost-ef- fective ways to deploy services for a community without having to build out significant infrastructure. Sites with limited space may engage a partner to meet residents where they are and reach them on devices that are not only common, but comfort- able. Leveraging technology to create highly individualized program plans may also garner greater response. The greater the throughout, the larger the impact. Regardless of geography, size or res- ident demographics, it's highly likely that your community would benefit from some level of services. Many of the owners and property managers we interact with are already mission- driven, wanting to do more for their residents. The multifamily industry touches a number of different special- ties; however, the end goal is to build and provide homes. Partnering with a third-party, service-enriched housing partner has many tangible benefits, fulfilling the goal of providing decent, safe housing while, at the same time being fiscally responsible by protect- ing the asset's ability to be maintained as such for the long-term. Flynann Janisse, Executive Director, Rainbow Housing, Rainbow Housing Assistance Corporation Janisse OFFICE $20,000,000 SUTTER PLAZA SAN FRANCISCO, CA | 120,173 SF LIFE COMPANY OFFICE & MANUFACTURING BTS $172,450,000 CORPORATE CAMPUS PHOENIX, AZ | 617,000 SF CONSTRUCTION LOAN & EQUITY MULTIFAMILY $141,500,000 ALISO CREEK APARTMENTS ALISO VIEJO, CA | 535 UNITS CMBS / B NOTE / MEZZANINE MULTIFAMILY $28,700,000 ORIGIN APARTMENTS SEATTLE, WA | 153 UNITS LIFE COMPANY MULTIFAMILY $13,427,350 COLUMBIA TRAILS APT. GRESHAM, OR | 264 UNITS FREDDIE MAC C O M M E R C I A L R E A L E S T A T E D E B T E Q U I T Y & S E R V I C I N G To speak to your local expert, visit northmarq.com/offices W E S T E R N R E G I O N ALBUQUERQUE | DENVER | LAS VEGAS | LOS ANGELES | PHOENIX SAN DIEGO | SALT LAKE CITY | SAN FRANCISCO | SEATTLE NORTHMARQ CAPITAL, LLC - NEVADA LIC. #3728 RETAIL $37,000,000 SAHARA CENTER LAS VEGAS, NV | 222,883 SF CMBS

Articles in this issue

Links on this page

Archives of this issue

view archives of Western Real Estate Business - AUG 2018