Professional Publishing, Inc
www.TheLandlordTimes.com
Vol. 5 Issue 7
July 2013
COLORADO
DENVER METRO • COLORADO SPRINGS • BOULDER
Monthly Circulation To More Than 7,000 Apartment Owners, Property Managers, On-Site & Maintenance Personnel
Colorado's First Quarter 2013 Insight Into The Rental Applican Risk Index Report By Jay Harris, Vice President of Business Services, CoreLogic SafeRent The CoreLogic® SafeRent® Renter Applicant Risk (RAR) Index Report, formerly known as the Multifamily Applicant Risk (MAR) Index Report, provides market-based benchmarks for evaluating credit quality and risk of default for renters applying for apartment homes in multifamily housing units. The index also includes data from single-family rentals. Using a mean of 100, an index value above 100 indicates decreased risk, and a value below 100 indicates increased risk. According to the data, the risk of default among renters nationwide decreased year over year in the first quarter of 2013 with an index value of 104 compared to the first quarter 2012 with an index value of 102. On a quarter-over-quarter basis, the risk of default decreased in the first quarter 2013 compared to the fourth quarter Continued on page 3
National Rent Growth Slows for Eighth Consecutive Quarter Axiometrics Inc., the leading provider of apartment data and market research, reports that at the national level annual effective rent growth slowed to 3.2% in the second quarter of 2013. For comparison, annual effective rent growth in the second quarter of 2012 measured 4.0%. Further, Axiometrics’ data indicates that the effective rent growth rate has slowed for eight consecutive quarters as many Metropolitan Statistical Areas (MSAs) are decelerating from very strong growth the previous three years. Peak annual rent growth at the national level during this current cycle was 5.3% in July 2011.
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Despite the slowdown nationally, many individual markets are still generating very strong rent growth rates, with 20 of the top 88 MSAs reporting annual effective rent growth of greater than 4.0%. While the national growth rate has been slowly decelerating over the past eight quarters, it should also be noted that the current growth rate is still above the long-term average of 2.1%. Occupancy at the national level remained strong, measuring 94.7% in the second quarter of 2013. A year ago the occupancy rate stood at 94.3%. The improvement in occupancy has occurred despite an increasing wave of new apartment
Current Resident or
supply. During the second quarter, 40,739 new apartment units were delivered, up from 18,861 units delivered in the second quarter of 2012. Apartment deliveries have totaled 124,500 over the trailing 12 months. With the pace of new deliveries increasing, the total for new deliveries in 2013 should reach 185,348 units by the end of the year. Fewer Concessions Mean Higher Rents As the market has tightened over the past few years, it has become increasingly difficult for renters to find rental concessions, at least in most MSAs. At the national level, Continued on page 4
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Resident Appreciation It Means Everything! © Want to know the secret for keeping your residents forever? And what if you could keep your properties full and plus have a waiting list, because your residents loved the way you appreciated them? In this article, you will learn how easy it is to develop a powerful resident appreciation program. Once in place, an appreciation program will forever change the way you operate and manage your apartment communities. Developing a monthly appreciation plan: At the beginning of each month, develop some fun ideas to “thrill” the residents at the properties you own or manage. Start by planning a short brainstorming session with your key property supervisors, resident managers and their leasing staffs, so you can hear their unique insight about ways to make the program a giant success. Their input is critical as each property has its own special resident profile, so customize your appreciation plan accordingly. Once your appreciation plan is finalized, provide a written recap for your leasing team so everyone will know exactly what their role will be. Clear communication makes for perfect implementation. Tip From The Coach: Consider building your resident appreciation plan for six to twelve months in advance. This makes for better financial budgeting, a more thoroughly developed appreciation plan, and your leasing team will have the time to evaluate several competitive proposals for the cost of each month’s theme. Building appreciation themes: As you consider the theme for each month’s appreciation program, start by looking for specific holidays or seasonal times of the year. For example, summer time is perfect for fun poolside events and outside activities. Have your leasing team take plenty of photos and fill your next newsletter + website with pictures of your residents having a great time. Everyone loves to see pictures of themselves and for those who Continued on page 2 Get Social With The Landlord Times
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Resident ...continued from front page couldn’t attend, they will certainly be sponsor your appreciation program. encouraged to participate at the next Your residents might just be perfect event. Another appreciation theme, new customers for them. depending on the profile of your residents, might be more educational. Tip From The Coach: Certainly your residents will love For example, have a local computer METRO, ARIZONA the appreciation you show them each store give a live demonstration for VALLEY, your residents about ways to maxi- month and so will your future resimize their use of the Internet or social dents. If appropriate, invite every funetworking websites like Facebook, ture resident who comes to the propTwitter and LinkedIn. Your residents erties you manage, to participate in will be thrilled to hear more about the your resident appreciation program. Internet and the computer store gets Take this small step and watch your Apr, Jun, Aug, Oct, closing ratioDec double, with the future to meet lots of Feb, potential new customers… a win-win for all. Finally, speak residents who attend! with your vendors and neighborhood businesses as many would like to co-
Evaluating the success of resident appreciation: Start by asking your leasing team to make written notes of any nice comments shared by your residents or prospective new residents. These nice quotes are perfect to include APT. NEWS in your next property newsletter + website and makes for great reading, especially for those who could not attend or participate. Next, evaluate the number of residents who attend or participate each month, as this helps for planning future programs. Of course, monitor your resident retention percentages, as this is the critical measurement of how well your appreciation program is working.
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Tip From The Coach: Remember, your residents will feel important when they know they are a top priority. Implementing a resident retention program will not cost much. But the return on your investment will be significant based on less resident turnover, happier residents will send more referrals, and more fun for your leasing staff. Why? Because The Coach says so! Plus, good news travels fast and so will the sterling reputation you earn with your residents. Want to hear more about this important topic or ask some additional Continued on page 3
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Resident ...continued from page 2 questions? Send an E-mail to ernest@ powerhour.com and The Coach will E-mail back to you a free invitation to be a participant on a PowerHour conference call. On this call we will discuss 25 appreciation themes your residents will love. Author’s note: Ernest F. Oriente, a business coach since 1995 [30,400 hours], a property management industry professional since 1988--the author of SmartMatch Alliances--and the founder of PowerHour...[ www.powerhour.com and www.powerhourseo.com and www. pirmg.com ], has a passion for coaching his clients on executive leadership, hiring and motivating property management SuperStars, traditional and Internet SEO/SEM marketing, competitive sales strategies, and high leverage alliances for property management teams and their
leaders. He provides private and group coaching for property management companies around North America, executive recruiting, investment banking, national utility bill auditing [ www.powerhour. com/propertymanagement/utilitybillaudit.html ] national real estate and apartment building insurance [ www. powerhour.com/propertymanagement/ insurance.html ], SEO/SEM web strategies, national WiFi solutions [ www. powerhour.com/propertymanagement/ nationalwifi.html ], powerful tools for hiring property management SuperStars and building dynamic teams, employee policy manuals [ http://www.powerhour.com/propertymanagement/employeepolicymanuals.html ] and social media strategic solutions [ http://www.powerhour.com/propertymanagement/socialmedialeadership.html ]. Ernest worked for Motorola, Primedia and is certified
in the Xerox sales methodologies. Recent interviews and articles have appeared more than 7000 times in business and trade publications and in a wide variety of leading magazines and newspapers, including Smart Money, Inc., Business 2.0, The New York Times, Fast Company, The LA Times, Fortune, Business Week, Self Employed America and The Financial Times. Since 1995, Ernest has written 200+ articles for the property management industry and created 350+
Here is how Colorado performed in the first quarter compared to last year: • Denver-Aurora-Broomfield, CO: 1Q13 RAR Index = 107 • Denver-Aurora-Broomfield, CO: 1Q12 RAR Index = 104 The CoreLogic Renter Applicant Risk (RAR) Index Report is published quarterly by CoreLogic SafeRent. The RAR Index is calculated exclusively from applicant-traffic credit quality
scores from the CoreLogic SafeRent statistical lease screening model, Registry ScorePLUS®, and is based on an analysis of 31,000 properties representing apartment homes and single-family rentals. The index provides a benchmark trend of national and regional traffic credit quality scores. Data is also available at the property and sub-market level with our analytics tools. For additional information or the full press release, visit corelogic.com. CORELOGIC, the stylized CoreLogic logo, SAFERENT and REGISTRY SCOREPLUS are registered trademarks owned by CoreLogic, Inc. and/or its subsidiaries. No trademark of CoreLogic shall be used without the express written consent of CoreLogic.
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Colorado's ...continued from front page of 2012 when the index value was 103. The rise in the index is a sign of improving ability to meet lease obligations among prospective apartment renters nationwide. For additional regional data and renter trends, visit http://www.corelogic.com/aboutus/researchtrends/renter-applicantrisk-index.aspx.
property management forms, business and marketing checklists, sales letters and presentation tools. To subscribe to his free property management newsletter go to: www.powerhour.com. PowerHour® is based in Olympic-town…Park City, Utah, at 435-615-8486, by E-mail ernest@powerhour.com or visit their website: www.powerhour.com
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National ...continued from front page concessions lowered asking rents 1.4% in the second quarter, which is the equivalent of five days free rent on a 12-month lease. For comparison, Axiometrics reported that concessions lowered asking rents 2.4% a year ago and 3.7% two years ago. The peak for concession values was in December 2009 when asking rents were lowered 7.5% by the use of concessions. Asset Class Performance Class C properties continued to outperform Class A and B properties for effective rent growth in the second quarter of 2013, a trend that began in October 2012. Over the
prior year, effective rents increased 4.1% for Class C properties, compared to 2.9% and 3.4% for Class A and B, respectively. Class C properties have an average occupancy rate of 93.3%, which is the lowest of the three groups, but they do show the best year-over-year occupancy growth. Class A properties have the highest occupancy rate at 95.2%, however this rate is 23 basis points lower than a year ago. Top Performing Markets For the second quarter, 11 MSAs had annual effective rent growth of 6.0% or greater, and all 11 of those markets were located in just four Serving the Portland/Vancouver Multifamily Housing Industry More than 21,000 Distributed Monthly www. TheLandlordTimes.com The statements
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and representations made in advertising and news articles contained in this publication are those of the advertiser and authors and as such do not necessarily reflect the views or opinions of Professional Publishing, Inc. The inclusion of advertising in this publications does not, in any way, comport an endorsement of or support for the products or services offered. Metro Apartment Manager is produced monthly and is published by Professional Publishing Inc. An Oregon Corporation. PO Box 30327 Portland, OR 97294-3327. (503) 221-1260 • (800) 398-6751 Copyright 2013. All rights reserved.
states: California, Colorado, Florida, and Texas. The top MSAs for effective rent growth in the second quarter of 2013 are outlined below: In addition to having all 11 of the top rent growth markets, California, Colorado, Florida, and Texas also had several other high-ranking MSAs for rent growth: 14. Austin-Round Rock, TX (4.5%), 16. Jacksonville, FL (4.3%), 17. Miami-Miami BeachKendall, FL (4.2%), 22. Dallas-PlanoIrving, TX (3.9%), and 24. TampaSaint Petersburg-Clearwater, FL (3.8%). Top Markets for New Construction Axiometrics also reports that the strong apartment performance the past three years has spurred a rebound in construction activity in many MSAs. Specifically, new units will be delivered in 182 MSAs around
the country in 2013, and national deliveries will increase from 87,077 units in 2012 to 185,348 units in 2013. Texas had three of the top five MSAs in the nation for units delivered during the second quarter. Axiometrics notes that even with the escalated delivery numbers from last year, the Texas MSAs still show some of the best effective rent growth rates in the country as demand is maintaining pace with supply. Axiometrics is the only multifamily research provider to survey every property in its database at the floor plan level every month. Every property. Every month. Only Axiometrics. Learn more at www.axiometrics.com or by calling 214-953-2242.
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The Landlord Times - Colorado • July 2013
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