SPECIAL REPORT: Multi-Housing Needs to Focus on “Working Smart” While Waiting for Market to Turn

By Erika Schnitzer, Associate EditorLas Vegas—Every industry, including multifamily, is tethered to what happens in Washington, noted Jim VandeHei, co-founder and executive editor of Politico and moderator of the general session, “Knowledge is Power: How to Survive These Times,” at last week’s National Apartment Association Conference and Exposition.The panel featured Ric Campo, chairman and CEO of Camden Property Trust; Bob Faith, CEO of Greystar Real Estate Partners LLC; and Christopher Lee, president and CEO of CEL & Associates, a consulting firm that provides strategic planning, satisfaction surveys and compensation advice to the real estate industry.With this correlation in mind, the industry needs to embrace the facts and determine its strategy for the future. The next 12 to 18 months will certainly be challenging, but the industry needs to keep in mind that “real estate is a marathon, not a sprint,” asserted Lee.In the short term, the industry needs to “focus on working smart,” said Campo. He outlined steps his company has taken to cope with the chaos, including: start with integrity; stop listening to the whining competition; confide in your spouse or significant other; communicate all the time; and focus on the aspects you’re able to control.The panel agreed that communication is key—even more so in times of economic uncertainty. However, the modes by which people communicate have changed, and companies must adapt, particularly in terms of utilizing technology more, noted Faith. And, according to Lee, transparency and visibility are equally as important as communication.Meanwhile, between 2011 and 2013, new policies could place more emphasis on rental housing, as opposed to down payment assistance, Campo asserted. And, as Faith pointed out, there has historically been a correlation between the reduction of unemployment and a rising demand for apartments.Moving ahead, though, to 2010 and 2030, 72 million people will be seeking residences, and by 2030, there will be a need for 8.6 million apartments, equivalent to roughly $1 trillion. Lee attributed this to the growing Gen Y population, which tends to delay marriage and have more debt; thus, homeownership is projected to drop to 62 percent. Lee noted that every 1 percent decline in homeownership equates to one million new renters. Furthermore, the lack of new development will result in pent-up demand, while rents will start to increase in 2011-2012, resulting in great opportunity by the end of 2011.In order to prepare for the recovery, Campo said that his company has invested in improved revenue management and call systems. Faith noted that his company is in the process of fundraising and working toward land ventures. Both agreed that they want to be prepared for when the market does turn. Meanwhile, Lee advised tracking and understanding your target resident through research.When the panels were asked what keeps them up at night, Lee responded, “worrying that the industry will not do things differently.” He added that the industry tends to lose sight of on-site staff but that it is extremely important to motivate and train good people. In order to retain talent, noted Faith, ensure that your employees know your company’s vision and values, as well as opportunities that could be available to them.