Real Estate Management News - 11/08/2017

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November 8, 2017
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LEADERSHIP SPOTLIGHT
2017 CPM of the Year

IREM® HEADLINES
Keeping Up With Real Estate Technology
Service Animals in Housing
Calling All IREM Members Who Are Graduates of HBCUs!
10 Simple Steps for a Stellar Customer Experience Strategy – Free Webinar

INDUSTRY HEADLINES
Effective Online Reputation Management
Parking-Spot Reservation App Expands to Mall of America
Tips to Ensure Your HVAC System Thrives This Winter
Renovations Blur Distinctions Between Office Space Rankings
Study Predicts Charleston Will Need More Than 13k Apartment Units by 2030
Food Halls to Crowd Miami Soon
Malls Positioning Themselves as More Than Just Retail Centers Ahead of the Holidays
Sony Building Makeover Aims for Upscale Office Tenants
New Shopping Center REIT Out to Cash in on Retail Market Tumult
Defending Against Applicant Identity Fraud With Identity Verification
Why Is the Government Giving Money to Dying Malls?
Book World to Close All 45 Stores Across the Midwest


 

Leadership Spotlight


2017 CPM of the Year

PATRICIA E. HUTCHISON, CPM, CAPS, is CO-Founder and President of Mission Rock Residential, (Denver, CO), where she is responsible for all aspects of the performance of the company. Mission Rock operates in 10 states and has approximately 650 employees. In 5 short years, she has grown the company to an excess of managing 24,000 units, valued at $2+ billion dollars. Under Pat’s leadership Mission Rock is an industry leader in Property Management.

Pat serves as the Executive CPM for Mission Rock Residential, which earned the Accredited Management Organization (AMO) designation in 2016. Her multifamily experience spans over 29 years working with both institutional and private owners.

Hutchison’s advice to up-and-coming professionals: “Never forget that we have the honor of taking care of the most important aspect of peoples’ lives; their homes, which are their sanctuaries. I believe our residents are willing to pay more in rent increases because of the quality and value of their living experience and the bonus is that we make a positive difference in their lives. Property management is a wonderful industry with a lot of opportunities. Many executives started at the property level, which allows for opportunity and the understanding of basic property administration. It helps greatly to learn the most you can about each position, so you have a well-rounded knowledge of the industry as a whole. Once you possess the knowledge, be confident in your abilities, speak your mind and be passionate about your well thought out decisions. Also pay it forward as you ascend in the business by mentoring those that come behind you.”

Hutchison serves as the President of the Board of Directors for the Greater Denver Chapter of IREM. In 2012, she was awarded the Most Outstanding Executive in Colorado by the Apartment Association of Metro Denver (AAMD), and she has served on the AAMD Board of Directors, as President of the Colorado Apartment Association (CAA), and on the National Apartment Association Educational Institute (NAAEI) Board of Directors.

Learn more about all the 2017 REME Winners!
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IREM Headlines


Keeping Up With Real Estate Technology

Technology is revolutionizing how real estate managers have to conduct business. With new and changing technologies coming online almost every day, companies that don’t keep up will be left in the dust. Are you and your company on the “bleeding edge” of technology – or is the dust starting to obscure your vision? Can you answer these questions:

1. You have heard of “big data”, but have you heard of “smart data?”
2. Do you know what “real estate fracking” means?
3. Do you have any “digital natives” on your staff?

If you don’t know the answers to these questions, and you are worried that the technology revolution is leaving you behind, you need to view a new IREM video that can answer these questions and more.

Steve Weikal, head of Industry Relations at the MIT Center for Real Estate, was interviewed at IREM’s 2017 Global Summit about the pivotal ways in which new technologies are impacting commercial real estate. He answered many of the critical questions real estate managers are asking, including:
  1. What is it about data that is disrupting real estate management?
  2. What new technology related to the “sharing economy” is impacting real estate management?
  3. What technology changes might we see in the future?
  4. How can real estate managers stay current with the changes in technology?
  5. What are the technology talent requirements for real estate management companies?
View the video and start taking advantage of the technology opportunities available for real estate companies.
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Service Animals in Housing

Service animals can play an extremely important role in helping people with disabilities lead more independent and fuller lives. Service animals may include animals used for assistance, therapy, or as companions. Dogs are the most common service animals but, capuchin monkeys, pot-bellied pigs, and miniature horses can all act as service animals. Birds can assist the hearing impaired, capuchin monkeys can provide an extra set of hands, pot-bellied pigs can alert of seizures and miniature horses like dogs can help the visually impaired. Since miniature horses have double the life expectancy of dogs their popularity as a service animal may increase – giving property managers something else to consider when dealing with service animals.

Other considerations for property managers include that there are:
• No breed restrictions
• No special training or permits required
• No limit to the number of service animals a person with a disability may need
• No pet rent and no pet deposit – Service animals are NOT pets

It’s important to note that service animals are not considered pets. Pet rules do not apply to service animals even in pet-free buildings, however, animal rules can be applied. A harness, collar, or leash is not required but the animal must be under control at all times. The American with Disabilities Act (ADA) defines “under control” as being leashed, harnessed, tethered, or under voice control.

Note, not all disabilities are visible. If the disability is apparent or obvious, do not ask for medical verification. However, if the disability is not apparent, landlords may request a note from the tenant's medical professional. Medical verification should be retained with the tenant’s records and staff is not allowed to discuss with other residents. Additionally, service animals must be allowed in all areas of a property. Keep you staff trained and updated on Fair Housing, which includes respecting and accommodating people with disabilities.

From an IREM 2017 Global Summit education session by Patricia Trombello, CPM
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Calling All IREM Members Who Are Graduates of HBCUs!

IREM is committed to making real estate and property management a more diverse industry. One way of doing this is reaching out to Historically Black Colleges & Universities (HBCUs) and connecting with students, faculty and administrators. What better way to start this process than finding IREM members who are HBCU alumni. If you are a graduate of a HBCU, please let us know by emailing diversity@irem.org. We look forward to hearing from you!

IREM’s Diversity Advisory Board and IREM’s Student & Academic Outreach Advisory Board have come together to form a task force with the specific task of reaching out to students and administrators at Historically Black Colleges and Universities (HBCUs) to introduce them to a career in property management. This HBCU Initiative Task Force is being chaired by Beth Machen, CPM and Glenn French, CPM.

We hope to grow and diversify the IREM network and know that our members are our greatest advocates. IREM currently works with the IREM Foundation on diversity programs geared towards our current members, such as our Diversity Scholars Program. IREM is now strategizing ways to bring in new members from diverse backgrounds and make them aware of property management as a career and what IREM can offer them.
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10 Simple Steps for a Stellar Customer Experience Strategy – Free Webinar

FREE WEBINAR: Tuesday, November 14, 2017 – 2:00pm ET; 1:00pm CT; 12:00pm MT; 11:00am PT

Perception is reality and reality is perception – and the reality today is ‘Keep me happy or you won’t keep me at all!’

Join “The Apartment Doctor,” Doug Chasick, as he shares 10 ways to redefine your customer experience strategy – without breaking the budget – so renters will have nothing but love for your community and their property manager.

• Learn how authenticity can set you apart
• Implement measuring in your daily practice
• Discover how to offer value above all else
• …and more!

Register for Free Now! Presented by AppfolioTM.
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Industry Headlines


Effective Online Reputation Management
Multi-Housing News (10/31/17) Miller, Dawn

More than 91 percent of apartment prospects now rely on online reviews and ratings when searching for their next rental unit. Dawn Miller of ROSS Management Services provides several tips for owners and operators on how to execute an effective online reputation management program. First, do not argue with the reviewers. "Anytime the person responding shows frustrations or anger," Miller writes, "that's certain to be a serious turn off to a prospect who reads the review, and it's bound to anger the resident who wrote it and put their lease renewal in jeopardy." Second, respond to both good and bad reviews quickly. As a general rule, apartment communities should try and respond to reviews within 24 hours.

A third tip is a philosophical one. Consider less-than-positive reviews an opportunity to improve. Basically, online reviews are free market research. Positive reviews undoubtedly let the management staff know what they are doing right. But negative ones are important because they let all concerned know if the apartment complex has a perception problem or an actual problem. Fourth, consider implementing a software program -- one that enables the operator to see and respond to all of a community's reviews in one place. Finally, "implement a clearly defined procedure," Miller concludes. Who is responsible for responding to a review should be clearly defined, whether it be an onsite associate, a regional manager, or a third-party vendor.
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Parking-Spot Reservation App Expands to Mall of America
South Florida Business Journal (10/31/17) Lima, Debora

Miami-based parking reservation app MyPark will soon offer its services at one of the nation's biggest shopping meccas, Minnesota's Mall of America. Founded four years ago, MyPark is the developer and operator of an app-based platform by the same name that enables users to reserve premium parking spots at some of the country's highest-traffic destinations for a feee. MyPark, for instance, has deals with Florida's Dadeland Mall and garage operators in South Beach among other locations. MyPark's new partnership with Mall of America, which has installed 20 reserved and numbered MyPark spaces, extends the company's reach into the Midwest for the first time.

MyPark CEO Luis Mayendia is eager for the exposure. He issued a statement that read: "As the largest shopping and entertainment complex in North America with over 40 million annual visitors, and one of America's top tourists destinations, [Mall of America] is an ideal fit for our technology." Using the MyPark Apple or Android mobile app, users can reserve spaces at select locations as far in advance as six months. Spaces can be reserved for $6 for up to two hours via the app, then $3 for each additional hour. "Parking is the gateway to the shopping experience," concludes Mayendia. "The MyPark team couldn't be happier to be working with Mall of America."
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Tips to Ensure Your HVAC System Thrives This Winter
Buildings (10/31/17)

Building managers should start preparing their heating equipment now for the cold winter months. For general heating system maintenance, Modine Manufacturing offers four crucial checkpoints. One, check equipment for any physical damage that may have occured during the summer. This should include damage to fans and air movers, wiring, gas pipes, vent systems, sheet metal, and equipment supports. Two, check for cleanliness of the heat exchanger and all burners. Three, make sure the vent system has not been compromised in any way and is in proper working order. Finally, check for any obstructions that may be blocking the air inlet or discharge paths of the heat exchanger. Modine is providing a commercial maintenance checklist and inspection form to help facility managers this winter on its http://modinehvac.com website.
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Renovations Blur Distinctions Between Office Space Rankings
Minneapolis Star Tribune (11/04/17) Norfleet, Nicole

Office brokers, building owners and managers, and tenants have long followed the subjective Class A, B, and C system of ranking commercial real estate to separate premier office buildings from plain ones. Lately, though, that class system has been breaking down somewhat as buildings that used to be lower ranked are being updated to such an extent that distinctions are getting blurred. The changes have prompted at least one property services firm -- Cushman & Wakefield -- to create its own ranking system and have attracted clients to some renovated middle-of-the-road buildings. "We don't see tenants that say, 'I want to be in a Class A building or I want to be in a Class B building,'"? remarks Brent Erickson, an executive director in office leasing for the local offices of C&W. "They would either say 'I want to be along Nicollet Mall' or 'I want to be in the North Loop.' And now what we are starting to see more often is tenants saying, 'I want to be in a building that has these features.'"

Features that used to be reserved for top office towers, like fitness facilities and outdoor terraces, are now becoming more common in remodeled buildings -- a trend that is being seen locally and nationally. Average buildings now considered Class B could move up to B+ or A- rankings with the addition of these and other amenities and finishes. And after renovations, some will likely be able to charge higher rents. But upgrades are primarily done to stay competitive and increase occupancy, concluded Steve Shepherd, vice president of office brokerage at Colliers International's Twin Cities office.
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Study Predicts Charleston Will Need More Than 13k Apartment Units by 2030
Live 5 News (South Carolina) (11/01/17) Simmons, Alexis

A study commissioned by a hotel advocacy group and posted on WeAreApartments.org estimates that the Charleston, S.C., metro area will need 13,388 new apartment units over the next 13 years to house all the people moving to town. There is currently an apartment boom going on with a half-dozen apartment buildings in various stages of planning and development for downtown. Charleston, meanwhile, is seeing on average about 34 people moving to the market every day. Some locals are concerned about the future quality of life. "If we could have infrastructure that could match this density boom . . . I think it will be great thing. But we need to work on the infrastructure first," said Jeff Banton, a local resident. Charleston officials insist plans are in place to ensure they can handle the growth. Currently, they are updating the city's long-term transportation plan and are putting emphasis on making sure affordable housing is incorporated in the new developments.
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Food Halls to Crowd Miami Soon
Miami New Times (10/31/17) Doss, Laine

One of the latest trends in commercial real estate is the rise of food halls. Such venues are not vacuous, mall-style food courts. They serve fare prepared by a collection of seasoned, professional chefs on real plates and china. Centralized bars, meanwhile, serve everything from craft beers to smart cocktails. The selling point of the food hall concept is choice. If you want lobster and your dining companion craves Italian cuisine, you can both be satisfied. The catalyst for the contemporary food hall movement might be Italian businessman Oscar Farinetti's Eataly, which made its debut in Turin in the first quarter of 2007. Three years later, Eataly New York City opened as a partnership with celebrity chefs Lidia Bastianich, Joe Bastianich, and Mario Batali. Today, Eataly has locations in Boston, Chicago, and New York.

The food hall trend has recently spread to smaller cities. In the last year, Stanley Marketplace, boasting more than 50 vendors, opened in Aurora, Colo. A converted body shop in Baltimore was transformed into R. House, with 10 chefs preparing gourmet fare for a cross-section of diners. Miami is the latest big market to join the craze. St. Roch Market is a 10,000-square-foot concept that aims to offer affordable dining in the city's tony Design District without sacrificing quality. It is attracting some interesting concepts, ranging from Yaniv Cohen's Jaffa to Coop, a fried chicken spot. The Citadel might be the biggest gamble in Miami's food hall lineup. The 10,000-square-foot venue, which is being developed by Conway Urban Real Estate and Urban Atlantic Group, is located in an area that has yet to gentrify. As a result, it will have to rely heavily on residents from such nearby communities as El Portal and Miami Shores.
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Malls Positioning Themselves as More Than Just Retail Centers Ahead of the Holidays
Insider Louisville (10/31/17) Bowling, Caitlin

New research from JLL shows that mall patrons are demanding fewer clothing retailers and more restaurants, entertainment, fitness centers and even groceries. JLL recently released data in which over 50 percent of the malls surveyed reported that they had or were spending $8.42 billion collectively on upgrades. The addition of new eateries, gyms, and entertainment options were tops, but more minor renovations have included comfortable seating, free Wi-Fi, better lighting, and fresh coats of paint. "There has been a significant push to shed an outdated preconception of what we envision when we hear 'mall,'" states Taylor Coyne, senior retail research analyst at JLL. "The idea of a mall -- a typically boxy, windowless, and interior-focused building -- is becoming an outdated concept." At the same time, people are busier than ever and don't want to make multiple stops if they don't need to with regards to dining, shopping, and diversions. Nearly 29 percent of malls JLL surveyed said they were in the process of adding or improving entertainment options such as luxury cinemas and arcade-type businesses like Dave & Buster's.

During the holiday season, more malls are expected to host pop-up markets that will feature local artisans. Amazon pop-ups are also expected to increase as the online retail giant realizes the benefits to having a physical presence. Some malls are even repurposing vacant big-box stores as multifamily housing or hotels. According to the JLL study, 12.2 percent of malls surveyed had or were adding apartments or condominiums and 10 percent are adding hotels. Retail, though, is still a critical part of the mix. According to JLL, shoppers are chiefly looking for apparel, luxury, and fitness retailers.
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Sony Building Makeover Aims for Upscale Office Tenants
Wall Street Journal (10/29/17) Morris, Keiko

The new owner of the Manhattan office tower at 550 Madison Ave. is hoping a $300 million makeover will place the 1984 structure in a class of upscale buildings charging some of the highest rents in the Big Apple. Olayan America and Chelsfield America, its development partner, report that the overhaul is focused on making the lower portion of the 41-story, granite-and-steel building into a transparent, light-filled and amenity-filled space. The goal is to charge rents in the range of $115 to $210 a square foot -- an aspiration that will face challenges in today's office market, real-estate brokers caution. They point out that new office buildings rising in the far West Side and south of Midtown Manhattan's traditional office district have intensified the competition for a limited pool of high-paying commercial tenants.

Though more than three decades old, the currently vacant building has a number of features tenants prefer today. They include high ceilings, office space without columns, and big glass windows. There are also two, 20,000-square-foot floors of amenity space that could be used for meeting areas or restaurants. The renovation will replace the building's systems with more efficient, modern equipment. A glass atrium enclosure will be removed and a small annex building demolished to make way for an open, expanded garden. Furthermore, the tower's front granite facade will be partially replaced by scalloped glass exposing steel cross beams, revealing both the lobby and two levels of tenant amenity space. Still, the added amenities will be key, as owners of new and older towers are investing heavily to provide fitness facilities and more dining options.
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New Shopping Center REIT Out to Cash in on Retail Market Tumult
Real Estate Weekly (11/01/17)

ShopOne Centers REIT Inc. has formed and launched a private real estate investment trust (REIT) focused on acquiring and managing market-dominant, grocery-anchored shopping centers. The company is coming to market with a high-quality, geographically diverse portfolio. Indeed, ShopOne and its affiliates own and/or operate a total of 46 shopping centers in eight states, the majority of which were acquired from Devonshire REIT Inc. Moving forward, ShopOne aims to buy well-located shopping centers in densely populated, fundamentally strong markets nationwide. The straegy will be to take advantage of dislocation in the retail marketplace to acquire assets at attractive valuations to replacement cost and enhance net asset value via operational and capital improvements.

"We believe strongly in the long-term fundamentals supporting continued investment in shopping centers anchored by top-performing grocers, leading discounters, and off-price apparel retailers," remarks CEO Michael Carroll. "We intend to be very active in the market as we seek to grow our portfolio and gain scale in high-density, in-fill metro areas." Despite the challenges facing the broader retail industry, such necessity-based retailers as supermarkets, restaurants, and gyms continue to perform well. At the same time, the retail sector continues to experience high occupancy, creating demand for well-located retail centers to accommodate new tenants through redevelopment and repositioning.
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Defending Against Applicant Identity Fraud With Identity Verification
Property Management Insider (10/03/17) Blackwell, Tim

Identifying imposters is becoming increasingly important for apartment owners and managers during the online leasing process. Whether it's the use of synthetic or real consumer data to create fraudulent identities, the multifamily industry is having a tough time in this regard. An imposter who signs a lease and doesn't pay can cost a property thousands in lost revenue and turn costs before being evicted. "There are instances where people apply online with a false identity, move in, damage the apartment, stop paying rent, and it costs a community thousands of dollars before kicking them out," laments Mark Wilkinson of RealPage Screening. "Up to 80 percent of applicants apply online, and that makes it easier to pose as someone else." He adds that a lot of apartment communities might not double check before the new resident moves in or simply can't tell if it is a fraudulent document or a real document.

To address this problem, RealPage Screening recently rolled out its new Identity Verification enhancement. The new feature authenticates an applicant's identity, in addition to running the existing criminal and financial checks. The software performs a device assessment (telephone, tablet computer, laptop, and so forth) and identity validation for each applicant applying online. High-risk applicants are flagged utilizing a pre-determined index score or specific identity triggers. For instance, an applicant who inputs the social security number of a deceased individual will get flagged. Those applicants who are considered "medium-risk" will be sent a one-time verification code via SMS text, e-mail, or voice call as they apply online to authenticate the information -- a two-factor authentication process. The applicant will not be permitted to go to the next screening step until they pass this step. According to Wilkinson, the service is similar to verification processes enacted by financial institutions when users change passwords and get a text or e-mail requiring verification.
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Why Is the Government Giving Money to Dying Malls?
Bloomberg (10/30/17) Mulholland, Sarah

As brick-and-mortar stores continue to face financial struggles, shopping mall owners are looking for investment partners to spur growth and expansion. Local governments have recently stepped up, seeing available space at malls as a source of tax revenue. For example, mall owners have poured money into projects like hotels, apartments, restaurants, and skating rinks as of late. These projects also secure public financing via tax arrangements and incentive deals. Jami Wadkins, chief financial officer of Bayer Properties, says if developers can create plans that do not expose city governments to large amounts of risk, it is likely they will invest in certain projects.
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Book World to Close All 45 Stores Across the Midwest
Publishers Weekly (NY) (10/31/17) Kirch, Claire

Book World Inc. has announced that it is permanently shuttering all 45 stores in its Book World chain spread throughout the Midwest. Liquidation sales began on Nov. 2 and will continue until all inventory is gone. The company anticipates that all stores will be closed by Jan. 15. In the letter to Book World's business partners, senior vice president Mark Dupont said that while the chain had been able to weather the emergence of e-books, sales have been on the decline for a year now and are still continuing to drop. Many of Book World's stores are located outside of heavily populated metro areas in small town business districts or in shopping malls.

There are 20 stores in Wisconsin, eight in Illinois, seven in Michigan, five in Minnesota, three in Iowa, and one each in Missouri and in North Dakota. Noting that Book World just opened a location in Jefferson City, Mo., Du Pont acknowledged that some of the stores -- particularly those in thriving downtown areas -- are actually doing well. He hopes that people interested in bookselling in communities about to lose their Book World outlet will open up their own bookstore, maybe even in the same building. He concluded, "Many of the stores are truly still healthy."
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