- KNOW THE DELIVERY SCHEDULE
Lease-ups are reliant on delivery schedules being on time. To best combat delays, communicate frequently with key contacts from construction, development, operations, marketing and revenue management departments.
It’s essential to have an early warning system for delivery issues and delays. Be proactive in your lease-up strategies with revenue optimization goals.
Quick Tip: One of the closest relationships for a lease-up project should come between the property manager and the construction/development team. Frequent conversations are an absolute necessity. Encourage the community manager to take ownership in the project by frequently walking apartments, hallways, amenities and common areas for signs of progress or delay.
- PLAN FOR SEASONALITY
Multifamily insiders know seasonality can have major effects on leasing numbers. Be proactive by having candid discussions with management and the developer on the challenges of seasonality. Make sure the pro forma takes into account seasonality on both leasing pace and rent growth vs. concessions. Work with the development team to have more units delivered in high rental season if possible. If that’s deterred by construction delays, aim to be 100% leased upon delivered units in low season.
Quick Tip: Plan ahead for lease expiration management the first year and two years past stabilization so you can correct for any misaligned expirations due to low season deliveries and heavily discounted leasing to fill those units.
- UNDERSTAND THE PRO-FORMA
Take ownership of the proforma. Ask yourself – Is occupancy, absorption, and rent growth (or concession burn offs) reasonable for the market? Is the competitor set on target and do their rents align with market conditions? Do you think the exit strategy and CapEx assumptions are realistic? If you answered no to any of these questions, speak up. Do so respectfully and in the developer’s language.
Quick Tip: Be able to talk CapEx, even if it doesn’t directly apply to pricing. It is the developer’s language and by speaking their language, you are building that connection and understanding.
- WATCH LEAD INDICATORS
One might think that lease-ups always get the most leads – unfortunately, this is not necessarily the case. Lead indicators start with absorption when the first deliveries are real and tangible. After that, take into consideration marketing statistics. If lease expiration management (LEM) was successful coming out of year one, it will help prep operations executives for the next year. Ask yourself: Is your velocity headed in the right direction and did you take seasonality into account? Can rents be increased (or concessions decreased) to make even more (and/or put some cushion in the bank for the low season)? Will we finish lease-up before month 13?
Quick Tip: If you want to lease-up before month 13, look at how rents and marketing strategies can be better aligned to drive traffic and demand. This can help increase revenue by increasing rents (or decreasing concessions) and rent to market conditions when seasonality is high.
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