As multifamily assets are bought and sold, one of the challenges facing owners and operators is how to reposition older properties that are underperforming. Whether the goal is to better compete with new product in the neighborhood or to mend a tarnished reputation, there are a number of tips that can help.
Many of the marketing techniques that are working for high-end apartment communities can also be applied to mature properties that are struggling, according to Kevin Thompson, senior vice president of marketing at Bell Partners Inc., a multifamily real estate investment and management company based in Greensboro, N.C. The Bell portfolio includes 225 communities and more than 64,000 units in 15 states, spanning a spectrum of ages and market classes.
To ensure marketing success, Thompson suggests finding the competitive edge by looking at the asset from the prospect standpoint. “What feature or amenity stands out the most, from a marketing and advertising perspective? An older asset may have a better location and bigger floor plans. Perhaps it’s more affordable, or can be marketed at ‘lower rent per square footage,’ or located in a well-established neighborhood,” says Thompson. These are a few examples of features to emphasize.
A community referral program can also help. “An older asset can ‘coat tail’ on the marketing of a newer asset by playing up the attributes and benefits of sister properties in the same market,” says Thompson. Showcase your sister properties with enticing photography on a t-stand sign in the lobby that advertises a $250 or $500 referral fee for not just their community, but for any sister referrals as well. A picture’s worth a thousand words, and this shows that your apartment company is bigger than just this one older asset. “It lets renters know you have a variety of apartment communities and something to meet everyone’s needs,” adds Thompson.
It’s also important to be comfortable embracing new technology. “You can portray your older asset as a techno-friendly property if you have an attractive, well-functioning website. Overall, websites are affordable to build these days, whether you build it in-house or outsource. Online rent pay and maintenance requests are examples of services that today’s renters demand,” says Thompson.
Social media falls under the umbrella of new technology, and today’s apartment consumers—of all ages and socio-economic backgrounds—will notice if your apartment community doesn’t have a presence on Facebook, Twitter, etc., or worse yet, if you aren’t keeping an existing social page up-to-date and responding to feedback/questions. Renter expectations are certainly defined by experiences with other industries.
“You can do your banking and shopping on your phone, so renters now expect to be able to pay the rent on their phone as well,” explains Thompson. “Once they get used to the convenience factor there’s no turning back.” But keep reputation management in mind before diving into social media and create templates and protocols for how associates will respond to customer feedback on forums such as Yelp and Apartmentratings.com.
Another strategy that can give older communities a competitive edge is to implement a lease buy-out program. “We conducted a few pilots of this program at AvalonBay [Thompson spent 12 years there, most recently as vice president of Marketing] and found that many renters appreciated this new twist on lease terms. Given that recent Apartments.com research has shown that job relocation is currently the number one reason for moving, providing the resident options can give an older community a competitive advantage,” says Thompson.
Furthermore, with new revenue management software programs, communities can offer a range of lease terms versus the traditional 12-month contract. Not only can this entice prospects during their shop, but it can also provide a more balanced lease expiration pattern and higher rent revenues.
In fact, good customer service not only transcends the age of your brand—it’s married to your marketing plan. Customer service is how you bring your brand to life. Therefore Thompson suggests surveying residents before undertaking renovations.
“Get their opinion about where they would like to see your renovation dollars spent: in the apartment homes or in the common areas,” he adds. You’ll find that some residents will think management should focus on the apartment units since that’s where they spend most of their time, while others are more enthusiastic about sprucing up common areas, curb appeal, the lobby or fitness center so that they feel like they’re getting a “luxury” experience for a lower priced apartment unit. “Products such as Survey Monkey costs pennies on the survey, and involving residents in the process can be a big selling point, and may even help drive retention,” explains Thompson.
Making visual enhancements
According to research conducted by Apartments.com, prospects are interested in seeing more interior shots of living spaces when they visit apartment community websites. If your budget can’t accommodate the services of an interior designer, Charter Furniture in Addison, Texas offers a turnkey solution that can transform your multifamily product quickly and affordably.
The idea behind Modeleasy, says John Gannon, vice president/sales at Charter Furniture—a furniture company that has forged strong relationships with multifamily companies in its area—was to create a way to replicate the look of a custom model with a price point that works for B or C properties. “This is for an owner/developer who hasn’t budgeted the $25,000 to $50,000 required to redo a model with a professional designer. It’s also for when you have a ‘dog’ on your hands that just won’t move.”
Modeleasy’s solutions are priced from $7,800 to $11,000. Charter Furniture selects and gathers everything needed for a professionally designed model—from living room, dining room and bedroom furniture to rugs, lighting, art, decorative accessories, bed linens, bath towels and shower curtains. This merchandise has been packaged into seven concepts for sale to the multifamily industry. Owners and property managers can select the concept that best suits the property and demographic—for example: Tribeca, West Park, Midtown, or Eco Chic (visit www.furniturebycharter.com and click the Modeleasy icon to see all seven concepts). Since Charter keeps all the models in stock, quick delivery is available as well as installation and/or instruction on where to place the furniture and accessories, this along with guidance on paint colors and accent walls.
Charter Furniture introduced its Modeleasy solution nearly five years ago to the local suburban Dallas market and now it ships all over country. “We sold one this week to a client in Florida,” says Gannon. McDowell Properties in San Francisco recently turned to Charter Furniture when it closed on 16 properties in three states. “We sold 16 models in one day for this owner to quickly reposition their newly acquired assets,” says Gannon. Other clients that turn to Charter Furniture include BH Management and Lincoln Property Company.
“We shop hard and diligently [for furniture and accessories] in North Carolina twice a year,” adds Gannon, whose team stays abreast of design and consumer trends and also works with some clients on custom projects.
Who is the target market?
Make sure to do your research before undertaking improvements, advises multifamily marketing expert Lori Snider, founder of The Lori Snider Company. “What kind of amenities and features are your desired competitors offering? Then, change it up a bit. What are they not offering that would be appealing to the desired profile?” Snider offers the following tips for mature properties that are struggling:
1) Create an outdoor fire-pit with pavilion to reinvent the typical—and dated—grassy courtyard. A pavilion provides a gathering place other than the pool for resident functions and can dress up an area that wasn’t providing much value.
2) Offer free WiFi in the clubhouse and surrounding areas. It’s a must.
3) Choose an exterior paint palette that is fresh and a bit daring to capture interest and provide a dramatic facelift. Utilize a service like The Color People to maximize positive impact.
4) Remember that nothing says “dated” like pickled kitchen cabinets and mauve countertops. Whether you paint them or replace them, an updated look is a must. New appliances, granite countertops, a simple backsplash and new fixtures and flooring add value and make old seem new again.
5) “Brassy is not classy” is a mantra to be stated over and over again during any repositioning. Recessed lighting and satin nickel faucets, doorknobs, drawer pulls and towel bars will lend a modern “wow” impact.
“The key with an older community,” says Snider, “is to work with what you have to make it even better, inside and out.” She adds, “If your community is brand new on the inside, but tired and old on the outside, you’ll have a hard time convincing clients of its value.”