While the pandemic paved the way for new multifamily investment opportunities across emerging secondary and tertiary locations, other players continue to bet big on high growth markets. Gables Residential—which ranked 15th on MHN’s 2021 top multifamily property owners list—falls into that category. The firm owns, develops and manages approximately 38,000 units across the country.
In an interview with Multi-Housing News, CEO Sue Ansel discusses the company’s focus on Texas and Florida, as well as the strength of the markets Gables Residential serves.
Why did you choose to focus on Texas and Florida in particular? What are these markets’ strengths?
Ansel: Gables has a long history of operating in both Texas and Florida, having development and stabilized communities located in both states since the mid-80s. We were originally attracted to these locations for many of the same reasons that these markets are so strong today: Both states are business-friendly locations with low costs, which attract employers, jobs, residents and a high quality of life. New jobs are historically one of the strongest creators of apartment demand.
Both states have been strong beneficiaries of years of in-migration. This trend only grew stronger during the pandemic as workers have been able to work from home and relocate their homes to areas of the country they find desirable.
How has your Texas portfolio performed in the past 12 months in terms of rent growth and occupancy?
Ansel: Our Texas portfolio has been full for the last 12 months, with the occupancy averaging 95 percent. Not only have our communities been full but so has the overall market. The increasing overall demand as well as a very strong single-family-home market created conditions for strong rental rate growth.
Your portfolio includes several green communities in Texas, such as Gables Park Tower in Austin and Gables McKinney Avenue in Dallas. Elaborate on your efforts to integrate sustainability into your business and apartment management practices.
Ansel: Gables Properties qualified for more than 55 different green building certifications, and over 64 percent of our owned portfolio maintains a sustainable certification.
Our first property received a sustainable certification back in 1997, reflecting that sustainability has been an important focus for Gables for many years. We were an early participant in GRESB, a worldwide real estate ESG benchmarking tool. Gables has performed significantly above the GRESB—and our peer group average—in every year of participation in the survey.
Gables views sustainability not as the responsibility of only several people in the organization but the responsibility of all associates who live with the opportunities to drive our environmental sustainability efforts forward every day.
What Florida markets were the most sought-after in the past year?
Ansel: With respect to leasing demand, all Florida markets in which we operate were very strong and it would be hard to differentiate between the markets. From an investment standpoint, the largest increases occurred in Orlando and Miami.
Are you planning on expanding to other areas, such as the southwest Florida coast?
Ansel: We currently manage communities in Tampa and are looking for opportunities to expand into several markets in Florida, including the southwest Florida coast.
Your website shows that you also manage multifamily properties across Arizona, California, Colorado, District of Columbia, Georgia, Maryland, Massachusetts and Virginia. Are you targeting other markets this year? Why?
Ansel: We will start new developments in Seattle, Salt Lake City and Orlando. Fla., as well as other markets in 2022. We target these new markets because we believe these cities have conditions that are attractive for future job growth, have economic diversity and are experiencing strong in-migration.
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Give us some details about the business strategy behind Gables Residential’s success.
Ansel: Gables’ mission is to provide extraordinary quality and service for our residents, an unparalleled employment experience for our associates, the utmost integrity and value for our customers, and enduring contributions for our local communities. Using these four pillars as the foundation for all of our business decisions and tactical operating strategies has given us the tools and vision to endure in a wide variety of business cycles.
In which way did you adapt the said strategy to changing resident behaviors following the onset of the pandemic almost two years ago?
Ansel: The pandemic required us to moderate in meaningful ways how we interacted with our residents, our teams and our communities. At the onset of the pandemic, the rules and regulations for our communities and associates were changing frequently and varied from location to location, so it required flexibility and a lot of communication.
Our first focus was safety for our associates and residents. The second focus was on identifying the best way to work with the residents to keep them in place and as comfortable as possible in a time of great uncertainty. We, like other leaders in the industry, really tried to lean in on behalf of the residents, waiving late fees, putting a hold on rental rate increases, creating payment plans for residents who were negatively impacted by the pandemic, doing warm calls to the residents to check on their well-being, and completely changing the cleaning protocols of the common areas to provide as much protection as possible.
As local rules and regulations changed and the economic conditions became clearer, we continued to morph our operations to meet the needs of individual situations. These changes required an evaluation in many cases and updates to the ways all of our associates handled their responsibilities.
In 2018, your company’s point-based loyalty program Captivate! won MHN’s Marketing Program of the Year. How has the initiative unfolded?
Ansel: The initiative has unfolded extremely well, garnering over 68 percent resident participation across the portfolio. We continue to expand the offerings to our residents including resident activities, awarding points for their participation in Gables initiatives and engaging them in virtual opportunities for convenience. It is also one of our highest-performing sites that posts high resident ratings and reviews.
Are you planning on launching something similar in the future?
Ansel: We will continue to expand upon our program as it continues to be well-received by both our residents and associates. Captivate! was the first white label points-based loyalty program for residents in our industry.
Please elaborate on your company’s short- and long-term plans.
Ansel: Our short- and long-term plans include continuing to grow the portfolio in our existing markets as well as new markets around the country. We will focus on markets that offer quality lifestyle choices, strong population and job growth, and business-friendly environments.
We will look for submarket opportunities within the markets that are diversified and afford us the opportunity to provide quality apartment home living experiences and great service to our residents. I anticipate this means that we will continue to expand the major markets in which we currently operate from the nine major markets where we own communities today to 12 over the next year, and three to five additional markets in the ensuing years.