Q&A with Princeton Properties Management’s Andrew Chaban

Princeton Properties Management Inc. CEO Andrew Chaban recently received the Northeast Home Builders Association of Massachusetts (NEBAMA) Builder of the Year Award. The Lowell, Mass.-based company currently owns and manages more than 6,500 apartment homes and corporate furnished apartments. MHN Editor-in-Chief Diana Mosher spoke to Chaban about the company’s strategies for surviving the recession, the opportunities in the markets in which Princeton is active and what keeps the chief executive officer up at night.

MHN: What has been your company’s strategy for weathering the recession?

Chaban: Our business strategy over the past few years has certainly been to stick with what we do best while fine tuning our procedures using innovative technology and creative management. We focused our core marketing and management efforts on the product type that makes up the majority of our portfolio: three-story garden-style apartment communities. We also implemented many cost-saving procedures at these locations such as the installation of solar panels on four Mass. locations. The solar panels power our common-area electric. Princeton also experiments with many time-saving management techniques, such as automating the leasing effort on desktops, mobile phones and now iPads. This streamlined process provides a better user experience to both our prospective residents and our employees. We remain in a great position to look for new opportunities—either new construction or acquisition. We are poised and ready, the rental market is more than holding its own and all forecasts point to a bright future in the multifamily industry, especially in the high-barrier-to-entry market of Greater Boston.

MHN: What types of demographics does Princeton typically build for? What other opportunities are you seeing in your markets?

Chaban: The majority of our product type is garden-style two-bedroom apartments in the rental range of $1,000-$1,700 per month. We do have other product types on either side of the spectrum, but this really is our sweet spot. It is good quality, affordable renter-by-choice housing. We haven’t been involved in student housing to date, but should the opportunity present itself, we certainly would consider it. We are in a good position to acquire multifamily deals as they present themselves, both in terms of traditional acquisition methods or via note purchase in select markets outside New England.

MHN: What’s your forecast for the markets in which you’re involved? Do you have plans to expand to other parts of the country?

Chaban: Princeton looks around the country for other opportunities on a regular basis. However, we have a bias to stay on the East Coast. Again, this speaks to our “stick with what we do best” mentality. When we expand further, it’s safe to stay it will most likely be on the East Coast. We’ve built in the Florida market and have really enjoyed being in Georgia as well. Currently, we are starting construction in Mass. on a 200+ tax-exempt low-floater deal.

Our industry has been faced with record vacancies nationally, and with the additional threat of new competition in the form of foreclosures and distress sales. Boston was somewhat less affected because there were fewer new multifamily housing starts in recent years, unlike other parts of the country that had been enjoying rapid growth in the late 1990s and early 2000s. Regionally, we are in one of the “better markets,” and the demographics for our area and product type are very favorable.

MHN: What are the biggest operations challenges you face going forward?

Chaban: As our products age, it becomes more and more important for us to get creative with managing our expenses and overhead. We can never stop scrutinizing and innovating new ways to cut costs without reducing the residents’ positive experience. Programs such as the solar panel installations allow for stable utility expense. We also find it critical to listen and react quickly. Princeton is tirelessly researching new, creative marketing and outreach plans. We pride ourselves on being as cutting-edge as our regional size will allow. Interest-rate risk, albeit a few years out, does keep me awake!

MHN: What sorts of green features are your residents demanding? Is Princeton developing green processes in order to save money?

Chaban: Within our company, we are taking both big and small steps to make a difference, from solar panel installations to advanced recycling programs offered to our residents. Our goal is to provide opportunities for residents and employees alike to live a greener lifestyle. Most residents request recycling programs, energy-saving products and the use of environmentally friendly products as a standard. We have done many things to benefit the environment, from installing rain sensors to implementing bike-lending programs.

MHN: What was your most interesting acquisition in the last year? Are you optimistic about finding lenders to finance multifamily deals these days?

Chaban: Our most interesting new involvement was with our Georgia portfolio. This location includes 1,200+ units spread out over four apartment communities. We have increased rental revenue over $100,000 per month and put the assets in position for pending refinancing and long-term stability. We are positioned well with investors and are ready to react as opportunity presents itself.

To comment, e-mail Diana Mosher at [email protected].