Loss to Lease

There is a question floating around our office along the lines of, “What do you book in loss to lease line of your budget?” Also, “On a percentage basis, where do you like to see that number trend?” With that question comes a number of schools of thought but no real definitive answer. And, that being said, I am not sure there is a right way or a wrong way to look at it. In the end, it all shakes out in the Rental Income line. That said, there is value in tracking the discount from new vs. renewals and even budgeted rental increases that drive the loss to lease margins.

Our current practice is to book both discounts from new sales and renewals to a single loss to lease line. And, we try keep the loss to lease number at two to three percent of the the gross potential or top line – if you will.

Here are a couple of schools of thought to throw out there:

What gets booked in loss to lease?

1. The only thing that gets booked in the loss to lease line is discounts from market on new leases only. Renewals that maintain any discount from the top line should be booked as a concession.

2. Any discount from market gets booked as an upfront or recurring concession – be it a new lease or a renewal that transacts at a rate lower than the top line.

Where should loss to lease trend as it relates to the top line?

1. The number should be maintain between two to three percent of your top line

2. The number will trend at nearly ten percent of your top line

Is there real value in tracking loss to lease as a line item?

If it all shakes out in the rental income number – is there any real value [up market or down market] to tracking this number?

I’m curious to hear your thoughts. I am really curious to hear from those of you that are utilizing LRO as I think you have done away with the concept of loss to lease – correct?

Technorati Tags: @mbrewer, mbrewer, mike brewer, apartment operations, loss to lease, gain loss,

Where's the disconnect?

Meerman Scott

Seth Godin quipped that engagement is hitting people with the right message at the right time so as to have them take action [engage]. I think we have to take that word engage and thus precise moment further. To truly engage, at least in my head, you have to be enchanted, you have to be moved, you have to yearn for more so much so that you have no choice but to act on your desires. It the deepest throes of emotion. Words like love, anger and the many nuances of each come to mind. It’s not just a like, unlike, +1 or the such. It’s deeper.

Mr. Apartment Manager Man; “I am done.”

It’s not unlike the gentleman I met with last Friday evening. He, unfortunately, was moving out of our Central West End Community. Reason? In his words, “I am done.”

You see about three weeks ago, the entire roof of his five story building blew off and landed in the parking lot beside and the street in front. Thank the one that governs it all that no one was hurt as it could have been really bad.

In response to the situation; our team entered every apartment in the building and place plastic over beds, electronics and the such. Most were thankful. Not the gentleman I met on Friday. His beef? We did not leave him a note to let him know we had been in his apartment.

Engage

Somewhere in the wake of the roof being pulled off the building by straight lined winds; his attention got engaged. The premise aside; he was moved by an aggressive deep seated emotion. He engaged with some ill language and barbed personal remarks for the onsite team and the rest of our Mills management team. He got so engaged that he ended up leaving the property.

The Point

I think we are headed toward true engagement – we are not there yet. We use the word but in it’s loosest of senses. We are in the early innings of a very long ball game that is frankly destined for infinite extra innings. Think in terms of singularity. Think in terms of love, hate and other extremes. That’s engagement. For now we are just courting. Or, at best out on a blind date and liking our mate because our friends suggested we should. Now it’s up to us and the million other people out there participating with brands to fall in love or fall in hate.

What do you think?

Photo tip to: Online Ninja Blog

Ignition

As the #trust30 challenge winds down; we are gearing the next series of compelling content. The series will be dubbed 101 days of apartment marketing and will start July 3 when we wrap up #trust30. We were so inspired by the absolute discipline of the last series that we thought; why not try and continue the daily routine of writing.

#trust30′s concept of penning daily prompts lead us to search for something that would provide the same sort of direction. We looked at several lists and settled on @hubspot ‘s 101 Awesome Marketing Quotes .

Keeping in mind that multifamily professionals are busy; we intend to keep or offerings short in nature, hopefully 200 words or less. And, quick and to the point. Some will be conceptual while others will be real life examples from our journeys at Mills Properties [the sentiments aimed at those out there that believe content not backed by practical application or identifiable results is waste - we agree to disagree].

Nevertheless; we hope to make it fun. We hope to learn some things about ourselves and the community we have managed to attract over the years. And, we hope to conjure up some cool multifamily conversation.

Please feel free to comment where you see fit – good, bad or ugly. It all matters to us.

M

If we shoot for the moon as to land somewhere in the stars – fostering crazy amazing social connections should/would be the goal.

Your strategy would wrap nicely around that goal and if you are truly dialed in that would ladder right up and align nicely to your company values.

In marketing to those fine people that live in our multifamily communities – fostering the premises for social connections is key.

Your off to create meaning connections contributor,

M

The Value of Being Human.

In order to examine the role of self-disclosure in perceived credibility, 120 students between the ages of 18 and 23 were split into three groups. Each group followed the tweeting of a supposed professor. One group saw only scholarly tweets, one group saw only social tweets and the last group saw a mix of the two. Each “professor” included the same number of tweets and hyperlinks. Students were asked to rate the credibility of the professor they followed based on the tweets they observed.

The highest ratings were given by students who saw only personal tweets. Mixing in scholarly tweets had no effect on the score.

It’s Time to Shine

Imagine for a moment; you meet a cool guy or gal at xyz function and decide that the two of you should get together again sometime. You agree to call in a couple days to see about a time and place to meet. When you call you let him/her know that you have appts stacked on top of appts but you can squeeze them in around six two months from Tuesday. Oh and, by the way, don’t forget to bring your credit card.

It’s a bit tongue in cheek but in the same respect it is how we treat the human beings that are reaching out to befriend us in our businesses. “Thank you for calling Hidden Treetop Village on Golden Pond Apartments; this is Suzy Trying to Hard to be Cheery Cardwell; how can I be of service to you today?” People see right through the lipstick.

Do we talk to friends like that?

We squeezed one roof into the 2011 budget but now that it has come time to consider doing it; we have to get creative. Enter the idea. The property sits right in the path of outbound flights from the Saint Louis airport. That being the case;  the owner suggested approaching big box retailers and or anyone else that would have an interest in sponsoring, in a sense, the roof replacement.

I’m certain it’s not a novel idea but it was novel to me in the sense of the trade exchange element. It goes beyond the traditional banner on rooftops that front busy arteries all over america. The type we purchase to push our lifestyle, specials and or availability. If done well, it could take a huge chunk of capital expense right out of our budget.

Cool or Cheesy?

Photo credit to: Advertising is Good for You

Millsy Becomes a Real Boy

Our newly appointed Marketing Director & Communication Strategist, Melissa Preusser (we have an interview lined up – stay tuned to learn more about her) borrowed from the world of athletic mascots to come up with Millsy! Millsy is our Apartment Company Mascot. Millsy will accompany our media teams to any and all company and community functions, festivals, sporting events, partnership gathering and networking events. His chief aim? Give people a reason to talk about Mills. And, what better event could there be for his coming to life party than the annual St. Louis Mardi Gras Parade. Millsy becomes a real boy on Saturday March 5th 2011. We will be sharing a lot of the highlights and pics in future posts.

For now, I thought it would be fun to share some pics of Millsy in the early stages of coming to life…

Power in Mystery

After working through the logistics and contract negotiations we settled on a spot and let the construction begin. What happened next was pure entertainment – are you building a pool? Are you building a new building? Volleyball courts? – Wait, it’s too big to be a pool! Arg, what is it? All the common questions begin to filter through the wifi lounge, the community and into our leasing center. That is until we could not take it any more and we disclosed.That said, we learned a real time lesson as it relates to WOM.

Apartment Marketing Stimulants

Tell them but don’t tell them. We have a number of other amenities and improvements that we are doing to this property over the next one to three years with each one major in scope. Taking the lesson from the dog park mystery – we will leave the community to – guess it out – if you will. I can see some cool social media apartment amenity mysteries playing out over Facebook and other social platforms. In the spirit of – give them something to talk about – mystery takes a front seat. And, besides who doesn’t like a great guessing game or mystery? Who can resist talking about it with their friends, family and otherwise? Which is part of the point, right?

Over the past few weeks we have started to quietly roll out some of our Facebook Like Pages as we gear up for the Get Social with Mills Initiative . One of the issues we’ve run into with this slow roll out is anxious PMs and MSs like Teresa and Mike at Park Clayton Apartments. They were ready to run – so, we let them go and in just over two weeks they took the like numbers from 7 to North of 225.

How to grow Your Apartment Facebook Like Page numbers

How did they do it? To make a long story short Mike brought an orphaned stuffed yellow duck to the leasing office for Teresa to see and each time they tried to put the duck away – residents asked to have it back as a mascot. With that T and M – [I often use the first letter of peoples names - with that T is for Teresa and M is for Mike] decided to have a – Name the Duck – contest . In conjunction with that contest they decided to give away a few fun prizes for the resident who yielded the biggest number of Likes to our page in a weeks time.

The Apartment Like Page Results

T and M put on North of 200 Likes inside of two weeks time. Not only that – they yielded something much more important in my opinion – check out the page and I think you will quickly discern what I mean. That point brings me to the email below -

How to use Facebook Like Pages to Rent Apartments

I will let the email speak for itself -

Have a compelling weekend – M

—–Original Message—–
From: Park Clayton <parkclayton@millsproperties.net>
Sent: Thursday, June 03, 2010 12:55 PM
To: ‘Mike Brewer’ <MBrewer@millsproperties.net>; ‘Tracy Seubert’ <TSeubert@millsproperties.net>
Subject: Great news!

Hey guys,

I have some awesome news about our facebook fans. One of my residents came down to tell me that his friends in Taiwan are watching us on facebook and they think it’s great that we do resident events and have contests. He says they told him they want to move here when they get to town just because of what they see online!

Also, he brought down his laptop and we spoke with a couple of his friends in Taiwan who want to move here in August. The program they use to chat/talk internationally is called, “skype.”

Teresa Richardson

Property Manager

Park Clayton Apartments

photo credit: blog.hubspot.com

I am certain that many of you can imagine the missed opportunity. My hope is that there are not others out there that have walls like this one in their offices. My plea to you if you do is to get digital fast -

We will be doing as much as we kick of the Get Social with Mills Initiative. Keying off what others have done in the industry, we feel it will be a necessary and fruitful piece of our on-line branding presence going forward.

Would love to hear your thoughts -