Dees Stribling, Contributing Editor
Irvine, Calif.–The Bascom Group LLC, a private apartment owner with a portfolio of 100 properties totaling more than 29,400 units nationwide, has reported an increase of 11.8 percent in its portfolio net operating income for the fourth of quarter of 2009, compared with the same period a year earlier. The company’s total portfolio income declined 2.1 percent in 3Q08 compared with 4Q08, despite a decline in rents of 8.6 percent.
In other words, the company has had some successes in holding its own despite rising unemployment numbers and other recession-related problems facing multifamily owners. Like many apartment owners, Bascom has been cutting expenses in response to the economic downturn. The company managed to reduce portfolio operating expenses by $4.31 million, a 12.4 percent decrease, between the last quarter of 2008 and the same period last year.
The company did not, however, lay off any personnel last year. Rather, according to Bascom, cost-cutting measures taken across the portfolio focused on weeding out excess operational costs.
Among other things, the company installed higher-efficiency water, electricity, and gas retrofits; vigorously appealed assessed property values; and rebid all vendor contracts, including insurance coverage. Bascom has also taken to using longer-lasting flooring materials.
Besides cost-cutting, Bascom also reports making an counterintuitive increase in its implementation of social outreach programs. The company says its decision has paid off in terms of improving tenant retention numbers, thus reducing the costs involved in re-tenanting unoccupied units.
“We’ve found that by providing our tenants with daily or weekly after-school programs and activities for their children, for example, has increased resident retention and decreased turnover,” a spokeswoman for Bascom tells MHN. “They love the convenience and availability of these services.”