Interview with Lori Reeves: Green Elements Become Important Component of Design
- Oct 08, 2010
In the early 1980s, when Lori Reeves took a job at Forest City’s Federally Assisted Housing area as a clerk typist, she wasn’t planning on staying more than a year or two. She was looking for office experience but hadn’t set her sights on a particular career yet. Today, Reeves is the highly regarded vice president and chief information officer at Forest City Residential Group. MHN was fortunate to have Reeves on the panel of industry experts judging the 2010 Excellence Awards (see page 17 for our coverage of this year’s winners and finalists). Editor-in-Chief Diana Mosher sat down with Reeves after the judging to find out how she enjoyed the process and to delve deeper into several of the topics that arose as the judges evaluated the numerous submissions.
What was it like judging the 2010 MHN Excellence Awards?
I enjoyed the experience much more than I thought I would. We were all industry veterans in one capacity or another, and I think we were lucky to have an intimate setting and small panel of judges. It gave us the opportunity to get to know one another, and that was the best part of the experience. We each had a different set of experiences/areas of expertise that we brought to the table, so it was very insightful to exchange thoughts and experiences as we evaluated entrants in the different categories. Plus, I learned a lot about what others in the industry are doing and saw firsthand how other companies submit for industry awards.
What industry trends did you observe during the judging process?
One thing I noticed was the differences in real estate from the West Coast to the East Coast—not just the physical elements, but the services and amenities offered. Also, we are really starting to see “green” elements become an important component of design, build, marketing and maintenance of multifamily properties.
Were there other interesting take-aways?
Yes. We’re all still hurting and hoping to ride out the storm. Development is difficult without a public/private partnership. Marketing has changed to almost completely online—no surprise there. We’re all trying to figure out the social networking thing. Location continues to be an important factor in the renting decision. Our industry can have a significant impact on energy conservation. [It’s about] mobility, mobility, mobility.
During the judging, one of the topics that you raised was the value engineering process. What important technology features shouldn’t be value engineered out—and why?
This is one of my nearest and dearest topics—the cause I often find myself championing. Those of us in the technology areas of real estate often see that the developer will slash out technical systems and infrastructure in a project to either meet the pro forma numbers or to upgrade finishes, or to just plain meet their budget, often without understanding the impact of that decision on the lifecycle of the building: development, operations, disposition.
For example, in a recent project in California, we had designed fiber connectivity between all four of the buildings so that we could centrally manage all of the building systems (security, access control, parking, energy management, etc.). But the fiber network was removed from the project due to cost overruns in other areas of the build-out.
When I explained that we would now have to buy additional hardware for each building, and that the management staff would have to complete the tasks individually at all four buildings for the rest of forever (and I also showed that, in fact, you were not saving money in the long-run, or even the short-run), one would hope that the decision would be made to keep the fiber connectivity, but that’s not always so.
Additionally, if you don’t pull the fiber now, it will cost four times more for operations to pull it later. But quite often that doesn’t happen—the decision is made without consulting the operations side of the business and they often find out when it is too late to fix it. Developers have different incentives to meet than the operations team does, and I think it should be looked at as a whole and not two different set of objectives.
Do you think there’s such a thing as truly online leasing? Will we ever achieve it?
I think we’re getting closer, but I don’t see true online leasing like there is in, say, the hospitality industry. I mean, this isn’t a one-night stay decision. I do see “completion” of the leasing process happening online, where a prospect may accept an offer or quote and complete the application online. Or, after touring several properties, a prospect can decide to complete the lease paperwork online before the quote expires. But, we will always need to verify identity with a driver’s license, etc. And I think people will always want to see where they are going to live first.
You also touched on revenue management and yield management. How has this
revolutionized the apartment industry?
We implemented revenue management last year and have been very pleased with our results. We spent the prior years putting the building blocks in place, like re-doing our Websites for online availability and pricing, mapping amenities to floor plans and monetizing those intelligently, getting all of our forms into document management, implementing online payments and training our staff to use quotes before they became the only way to make offers or present pricing. This “new way” of pricing takes the burden of pricing negotiations out of the hands of the leasing staff and shifts the decision to the prospect/renewing resident to choose their individual lease terms and pricing needs. The human subjectivity element is removed, and all prospects are treated the same.
The revenue uplift promised by the vendors is easily realized, and the occupancy results have been better than expected. Even little things like optimizing our freight elevators have benefited from revenue management now that everybody doesn’t move out at the end of the month. I think if you are not already implementing (or seriously planning to implement) revenue management, you are behind the curve. When your competitors can react to pricing and occupancy changes on a daily basis, how can you possibly expect to keep up with that competition using a cumbersome, slow, manual process?
When did you join the industry and in what capacity? Would you share with our readers your interesting rise to the top?
Well, it is hard to tell that story without giving away my age but…I joined the industry in the early 1980s in the Federally Assisted Housing area of Forest City as a clerk typist for minimum wage who failed her typing test! I just wanted to get some office experience, so I took the job and thought I would stay a year or two and move on. We were developing Section 8 senior housing throughout the Midwest at a very rapid pace. This goes way back, but HUD initially changed the resident portion of rent from 25 percent of income to 30 percent of income, and the remainder of the rent was, of course, subsidized by HUD. Well….HUD was challenged by this increase and wound up sending rent rebates to residents and then had to ease the rent increases up each year—first to 26 percent, then to 27 percent, etc. until we got to the 30 percent of income that is still in effect today. So, that is when I first got involved in IT.
It was so cumbersome to keep track of the rent rebates and all of the paperwork that went with them, so I wrote a program to make my life easier. That’s when I got hooked on IT. Here was an area where you could never get bored because there is always something new to learn! Always some faster, better, smarter way to do things. When the personal computer came along, the rest was history—a never-ending supply of programs and operating systems to learn. Then when I was putting in a network at a new property in the mid ‘90s and all of the cabling was terminated wrong, I asked the question, “Did this same company wire all of the apartment units, too?” Next thing I knew, I was getting involved in ancillary income services with voice, video and data providers and started up our Building Technology Services group. So it was a very long and interesting climb up through the ranks, but I never planned on going into IT; it just sort of happened!
To comment on the story, e-mail Diana Mosher at firstname.lastname@example.org