on-site rental housing journal - january 2015

Rental Housing Journal On-Site January 2015 - Vol. 9 Issue 01

WWW.RENTALHOUSINGJOURNAL.COM • PROFESSIONAL PUBLISHING, INC

PUBLISHED 21 YEARS

17,000 PaPers Mailed Monthly to Puget sound aPartMent owners, ProPerty Managers & Maintenance PersonnelPublished in association with: Washington Apartment Association, IREM & Washington Multifamily Housing Association

3. Commercial Property Winterization

5. U.S. Investors Favor Renting Over Flipping

6. Five Tips to Full Occupancy

10. Top Pet Friendly Zip Codes

13. Innovators Beware: Dangerous Intersection Ahead

16. WMFHA Honoring Employees

19. The Secret Shopper

20. Buying Twice as Affordable as Renting

21. Property Management Reference Checks… Are They Really Necessary?

22. Multifamily Green Light

24. Property Managers Face Housing Slowdown as 2015 Begins

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503-221-1260

TRENDS is ‘THE’ Oldest and Largest Northwest Rental Housing Education Conference and Trade Show

This year TRENDS celebrated it’s 30TH year of production in a VERY big-way. The conference drew over 1,600 attendees, producing a very busy ‘sold-out’ trade show, offered 40 outstanding workshops and even celebrated with cake. This year’s

TRENDS conference was the biggest in many years.

TRENDS is the premier annual education conference and trade show for Northwest rental housing owner-ship, management and maintenance. TRENDS, also hosts the largest regional industry trade show featur-ing over 215 exhibitors. TRENDS is a national award-winning event.

An interesting fact about TRENDS

is it’s the longest running a continu-ously produced event at the Washington State Convention Center. See the TRENDS website at www.trendsnw.com

This years TRENDS Education Conference featured several well-known national and many regional speakers. As well as, several dozen highly regarded local industry prac-

By Tom Cain,Apartment Insights

The latest Apartment Insights survey shows rents falling $5 per month per unit and vacan-

cy rising to 4.55%. Yet rents increased $100 or 8.24% in 2014 according to Tom Cain of Apartment Insights. The data are from his Seattle firm’s 4th quarter statistics and trends on 50+ unit properties in the King/Snohom-ish market.

VACANCY: 4.55% The vacancy rate for our nonran-

dom survey of conventional, stabi-lized 50+ unit properties in the King/Snohomish market is 4.55%. This is up slightly from last quarter's 4.30%. It was 4.63% a year ago.

The overall vacancy rate which includes properties in lease-up increased from 5.86% to 6.44%. King has a vacancy rate of 4.47% and Snohomish County is at 4.83%. The softening in the market took place in

Market Slows, Rents Up $100 in 14

continued on page 4

continued on page 7

A Huge Success!30Th Annual Trends 2014 Draws Over 1,600 People

30th ANNUALcontinued on page 6

By John Wilhoit Jr.

In multifamily property manage-ment, there is always more to do, but there are certain things that

must be done. In the effort to main-tain full occupancy, these five tips are in the “must be done” category.1. Renewals!

The straightest line to maintain-ing high occupancy in multifamily is focusing consistent attention on renewals. Ignoring this makes main-taining full occupancy near impossi-ble.2. Be Ready! Never show a unit to a potential ten-ant that is not ready to occupy. This includes “almost ready” and “gon-na be ready next week” multifam-ily units. It’s either ready to occupy or… wait.3. Know Thy Competitors!

Know where you can compete and where you cannot. Wendy’s res-taurant has tried many times to get

Five Tips to Full

Occupancy

2 Rental Housing Journal On-Site • January 2015

RENTAL HOUSING JOURNAL ON-SITE

We Paint Hallways, Cabanas, and Offices

3Rental Housing Journal On-Site • January 2015


Our Apologies to WROA, In the December 2014 Edition of On-Site, Rental Housing Journal staff erroneously included an outdated advertisement for Washington Apartment Associ-ation (now Washington Rental Owners Association). We sincerely apologize to WROA

staff, members and our readers for any confusion, embarrassment or other issues this may have caused. We value WROA as an invaluable resource and organization in the industry and wish them well as they head into an exciting 2015.

The following is the message that should have been included in December On-Site:Washington Rental Owners Association (WROA), formerly know as Washington Apartment

Association (WAA), wants YOU to join US and here is why! We are the oldest statewide landlord association in the state of Washington. We have added a

series of full support services for the individual landlord to the already tremendous lobby team that has been fighting for landlords for 61 years! Your membership supports landlords across this state and our entire industry. This non profit organization is one of the most respected groups on Capital Hill and your membership effectively improves the influence we have. This is how you have always been heard on Capital Hill. Now this organization is also how you can get the support you need where the rubber hits the road.

• Individual memberships starting at $85 per year. Less than a good dinner for two can get you support you can’t afford to be without.

• Free landlord forms for members. All forms are vetted by landlord attorneys. • Superior quality credit and criminal screening available with prices starting as low as $10. • Two physical screening sites with a third site in Olympia opening January 15th • Attorney help line, free to members. • Educational dinner meeting and classes with landlord specific topics around the state. • Monthly statewide newsletter. • Networking and advertising opportunities. • Online video training coming soon. • Multiple locations across the state.

To get started: Call, stop by, or join through our website! www.waapt.org WROA Office 3301 Rucker Ave, Ste A Everett, WA 98201 425-353-6929 [email protected]

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By Cliff HockleyPresident, Bluestone & Hockley Real Es-tate Services

It was cold, real-ly cold. Let’s just say that it

was below freezing. News reports had been reporting for hours that the roads were icy and that everyone would be better off staying home.

Our property managers and

maintenance team had been prepar-ing for days for this cold snap. Property inspections had been sched-uled to make sure that all rented and vacant commercial spaces we man-aged would be weatherized. Nevertheless we had a few prob-lems.

First off, the ice storm downed tree branches and trees. This meant that many of our buildings lost power (and no power means no heat and a higher likelihood of frozen

pipes). At one of our smaller two-story buildings the waterlines in the attic were not insulated and broke. When the thaw came a couple of days later, water was everywhere and we had to relocate a couple of tenants for a week until we dried things out.

Finally, to add insult to injury, a riser froze in the sprinkler room of one of our retail strip shopping cen-ters. When that began to thaw out we had a huge problem with flood-

ing and no fire protection. The Fire Marshal learned about this (because an electronic monitoring alarm went off) and insisted that we post a 24-hour fire watch.

Did I mention that these events occurred after we prepared all of our properties for the cold snap and went through our checklist ahead of time?

Commercial Property WinterizationHow to Prevent Winter Emergencies the Real Deal: A Worst-Case Scenario

continued on page 9



King County, since the vacancy rate in Snohomish was identical to last quarter.

The University District has the distinction of having both the great-est improvement of any vacancy rate and the lowest vacancy rate. Its vacancy rate is 2.75% which it shared with Burien. Ballard has the highest vacancy rate at 10.48% followed by the Bellevue East submarket at 6.45%.RENTAL INCENTIVES: $17 (1.3%)

Rental incentives jumped from $8 to $17 per month. This is a significant change. It was likely caused by the combination of the slight rise in the vacancy rate together with down-ward pressure on rents. In the two-county area 24.8% of the properties are offering incentives, up from 17.5% last quarter.

ABSORPTION: +1,658 Units There were +1,658 units absorbed

this quarter, down from +2,013 units last quarter. The Queen Anne and North Seattle submarkets absorbed 524 of these units.

RENTS: $1,313 per Unit $1.57 per Square Foot

Rents fell $5 to $1,313 per unit. Even with the decrease this quarter, rents still rose $100 per unit or 8.24% over the past 12 months.

Submarkets where average rents are under $1,000 per month are Burien, Des Moines, SeaTac and Tukwila. The most expensive rents are in the Downtown Seattle sub-market. They average $1,995 per unit and $2.42 per square foot.

NEW CONSTRUCTION There are currently 19,280 units

under construction, up from 18,518 last quarter and 13,998 units a year ago. Fifty-four percent of these are in the city of Seattle, 28% on the

Eastside, 19% in South King, and 8% in Snohomish County.

Together with the 8,896 units that have been completed this year, the projected total for 2014 is 9,551 units. This is shy of the record-breaking 10,056 units completed in 1989. It is nearly double the 5,233 units com-pleted in 2013.

The 161-unit Verve in Seattle's Belltown opened this quarter. It is featured in the photo and is man-aged by Greystar.

We project the 2015 total at 12,273 units. Even with the likelihood that they won't all open by year end, 2015 will surely break the record set in 1989.

We have preliminary information for the next two years. We are track-ing 9,267 units that are either under way or scheduled for a 2016 comple-tion. For 2017 the number is 3,646 units.

The grand total for all of the units

in various stages of the pipeline is 52,668 units. This is up from 47,973 units last quarter and 38,941 units a year ago.

OBSERVATIONS The market appears to be losing

ground this quarter. The vacancy rate increased from 4.30% to 4.55%. Rents fell $5. Rental incentives dou-bled, and the number of properties offering incentives increased 70%. Is this the beginning of a trend or a sea-sonal funk?

We researched fourth quarter per-formance over the past five years including 2014. Rents declined in each of the past four years. Vacancies were up in 2013, and in three of the five years. Yet despite this quarter's weak performance, over the past year rents have surged $100 per month or 8.24%, and the vacancy rate is down slightly.

Will the market be able to rebound after a poor fourth quarter as it did in 2014? Based on our new construc-tion projections we expect that there will be about 25% more units com-pleted in 2015. This will present an extra challenge to the market.

Nonetheless, strong employment growth is expected to continue through 2015.

We expect a modest increase in the vacancy rate. Rents won't increase nearly as much as in 2014, and there will be a greater use of rental incentives. But considering how well the market performed in 2014 in light of all the new units, 2015 should be a good year.

Contact: Tom CainApartment Insights

206-632-2220

Tom Cain of Apartment Insights Washington is a member of the non-

profit Central Puget Sound Real Estate Research Committee in charge of pro-

viding apartment rent and vacancy data. Tom has been a member of the

Committee for over 25 years, and has been researching apartment market

trends in the Seattle area since 1978. His company surveys the five counties

in Central and South Puget Sound.This article highlights survey results

that subscribers can access from an online database of all 50u+ properties. Apartment Insights also provides cus-

tomized rent reports and market reports. www.apartmentinsightswa.

com 206-632-2220


Market Slows, Rents Up ...continued from front page



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The statements and representations made in advertising and news articles contained in this publication are those of the advertiser and authors and as such do not necessarily reflect the views or opinions of Professional Publishing, Inc. The inclusion of advertising in this publications does not, in any way, com-port an endorsement of or support for the products or services offered. Metro Apartment Manager is produced monthly and is published by Professional Publishing Inc. PO Box 6244 Beaverton, OR 97007. (503) 221-1260 - (800) 398-6751 © 2014 All rights reserved.

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RENTAL HOUSING JOURNAL

IRVINE, Calif., /PRNewswire/ --

Auction.com, LLC, the na-tion's leading online real estate marketplace, today

announced the findings from its No-vember Real Estate Investor Activ-ity Report™, a nationwide survey of real estate investors bidding on properties offered for auction dur-ing the month. This research pro-vides insight into real estate invest-ment trends on both a national and regional level. Survey data collected from investors bidding on property online and at live events across the country reveals that buying property

to hold and rent is currently favored over flipping nationwide, although investor intent varies considerably by vehicle (online or live event) and investor profile.

Respondents who indicated that they were making a one-time pur-chase preferred a hold-to-rent strat-egy, as did – to a lesser extent – respondents identifying themselves as full-time "real estate investors." Meanwhile, flipping was favored by the majority of respondents indicat-ing that they were working on behalf of another investor.

U.S. Investors Favor Renting Over Flipping According To Auction.com Real Estate Investor

Activity ReportInvestment Strategies Vary by Region, Vehicle and Investor Profile According to November Survey Results

National Findings: Investor IntentInvestor Profile Flip Rent UndecidedOne-time purchase 24.4% 72.2% 3.3%Real Estate Investor 46.7% 50.4% 2.9%Working on Behalf of Another Investor

60.4% 36.8% 2.8%

TOTAL 46.6% 50.5% 2.9%

Auction.com's findings based on responses given at online auctions show that investors bidding online generally tend to hold properties to rent rather than flipping them. This data also suggests that purchasing property to rent is more prevalent in

the Midwest and South, whereas there appears to be a higher propen-sity for flipping among real estate investors in the Northeast. The flip vs. rent split is nearly even in the West, with a very slight preference toward renting.

Conversely, investors bidding at live events appear to be more likely to flip the properties they purchase, but there were very strong regional variances. November survey data collected at live events in states where Auction.com is active revealed that flipping was favored overall,

with only Georgia, Tennessee and Texas bucking the trend. Meanwhile, respondents at live events in the Western states such as California, Arizona and Nevada showed an overwhelming preference toward flipping.

November Online Investor Data: Intent of All Investors SurveyedRegion Flip Rent Undecided West 49.5% 50.5% 0%Midwest 43.5% 51.8% 4.7%South 40.5% 57.1% 2.4%Northeast 54.1% 41.9% 4.1%Nationwide 43.3% 54.0% 2.7%

...continued on page 7

November Live Event Investor Data: Intent of All Investors Surveyed State Flip Rent Undecided Arizona 66.7% 19.0% 14.3%California 65.6% 32.2% 2.2%Georgia 41.9% 54.3% 3.9%Idaho 69.2% 30.8% 0%Nevada 88.9% 11.1% 0%Tennessee 39.4% 60.6% 0%Texas 38.7% 60.0% 1.3%Washington 62.5% 37.5% 0%Nationwide 49.3% 47.6% 3.1%



Five Tips ...continued from front page

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in on McDonald’s breakfast revenue. They just cant do it. Know thy com-petitors and what concessions they are offering in the present tense. Leasing agents should know ameni-ties of competitor properties and how/where your property can out-perform. Example: older units almost always have greater square feet than newer product. Accentuate the positive!4. Social media is a main-stay! Integration of Internet based ad-vertising/media is a must no mat-ter how small the multifamily mar-ket. The renter market is younger people (still). Young people are glued/stuck/fastens to their smart phones…. smart phones with con-nectivity to available apartment homes.5. Two-way communication! Leasing Agents are far from order takers- they are the front line rep-resenting your asset. A potential tenant coming to your Leasing Office is looking for a place to live and insight on the lifestyle repre-sented. A big part of leasing, then, is to dialogue and convey to potential tenants what they are buying.

This is accomplished best by cre-ating two-way communication.

Leasing Agents should be asking open-ended questions that draw information from potential tenants to better understand their needs and wants. This allows Leasing Agents to provide information on features and benefits offered by the develop-ment that meet potential customers lifestyle desires. People may look for features, but they buy benefits. The only way to know what benefits they are looking for is to ask.

Multifamily Insight is dedicated to assisting current and future multifami-

ly property owners, operators and investors in executing specific tasks

that allow multifamily assets to operate at their highest level of efficiency. We

discuss real world issues in multifamily management and acquisitions. This blog is intended to be informational only and

does not provide legal, financial or accounting advice. Seek professional counsel. We discuss best practices in

multifamily management and methods related to how to buy apartment com-plexes. Our focus is sharing strategies

and tactics that can be implemented and measured. For more information, visit:

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By Devan Gilbert, Staff Writer, Rental Housing Journal

Rumor has it in the marketing and advertising world that print advertisements are out-

dated and inefficient. The numbers, however, say otherwise. It’s time to squash this misinformation and get to the truth about the power of the print.

The younger generation doesn’t read print anymore:

False. Many like to claim that print advertising is incapable of reaching the younger generation, but research proves differently. While social media is an effective way to target the 18-30 year old demograph-ic, it is not the only way.

National Public Radio reported a study that found a quarter of 18-24

Is Print Advertising Dead?

The Evidence Says No!

continued on page 6



TRENDS ...continued from front page

Renting Over Flipping ...continued from front page

titioners participated as workshop panelist. All of TRENDS ’14 classes where full and well received.

Rental housing property owners; property managers; leasing agents; maintenance personnel and portfolio managers attend TRENDS.

TRENDS is brought to you by: Washington Apartment Association (WAA); The Institute of Real Estate

Management (IREM) and

Rental Housing Association of Puget Sound (RHA).

NEXT YEAR- The 31st Annual TRENDS will be December 8, 2015 at

the Washington Convention Center, Seattle.

TRENDS is produced by Larry Diamond. [email protected]

"Real estate investors appear more likely to flip a property in those regions where home values are higher," said Auction.com Executive Vice President Rick Sharga. "Higher prices can translate to a faster and potentially more significant short-term return on investment. The hold and rent strategy seems most popu-lar in markets where home prices are lower, allowing investors to charge a more competitive monthly rental

rate and still produce reasonable returns over an extended period of time."

Flipping was also the more popu-lar strategy among investors pur-chasing multiple properties per year – particularly institutional investors (those indicating that they purchase 50 or more properties per year). This was true for both online auctions and live events.

November Online Auction Investor Data: Intent By Purchase ProfilePurchase Profile Flip Rent Undecided0-1 Property/Year

30.0% 65.6% 4.4%

2-49 Properties/Year

52.8% 45.5% 1.7%

50+ Properties/Year

60.0% 40.0% 0%

November Live Event Investor Data: Intent By Purchase ProfilePurchase Profile Flip Rent Undecided0-1 Property/Year

41.3% 56.3% 2.5%

2-49 Properties/Year

49.8% 48.0% 2.2%

50+ Properties/Year

55.4% 38.6% 6.0%

Auction.com, LLC, is the nation's leading online real estate marketplace.

Founded in 2007, the company has sold over $26 billion in residential and com-mercial real estate assets. Auction.com has over 900 employees and headquar-

ters in Irvine and Silicon Valley, California as well as offices in Austin

and Plano, Texas, Atlanta, Denver, New York and Miami. Visit www.auc-

tion.com for more information.SOURCE Auction.com, LLC

Flipping was also the more popular strategy among investors purchasing

multiple properties per year – particu-larly institutional investors (those indi-

cating that they purchase 50 or more properties per year). This was true for

both online auctions and live events.



Print Advertising ...continued from page 8

year olds had read a newspaper within the past 24 hours. The New York Times announced that 10 per-cent of its hard copy subscribers are between the ages of 18 and 24. According to Mediamark Research and Intelligence, magazine reader-ship has increased by 4.3 percent in the past five years. The Association of Business Information and Media Companies reported that 96 percent of business-to-business clients still read print publications. If businesses made the fateful decision to disre-gard print advertising all together, they would be disengaging from a massive list of potential clients.

Multimedia is the only way to get readers to spend with my company.

False. A December 2012 Valassis survey was conducted, focusing on the connection between print adver-tisements and the spending habits of the generations born in the 1980s and 1990s. Here is the break-down of the results.

• Over half said they would spend less money if they didn’t look at print ads.

• 91 percent said they used coupon cutouts from print advertisements to save money.

• 51 percent admitted that print ads inspire their spending habits.

• 30 percent said they refer to online websites seen in print ads to obtain more information

• 87 percent use print to choose a restaurant. Print ads make it easy to target

certain demographics. Instead of throwing an advertising banner on Facebook or Twitter, you can send magazines, flyers or catalogs to homes in certain areas. Nordstrom, a billion dollar company, still spends a pretty penny on print advertising. Strategically, different versions of catalogs are printed and are distrib-uted according to how much a spe-cific customer spends annually and which departments they shop in. Nordstrom is able to target where and who its catalogs should be

mailed out to. Finding the appropri-ate audience for a company’s adver-tising is made easy with print result-ing is less wasteful marketing spend-ing and increased profits for a com-pany.

Why should I use print ads? Large companies aren’t using them anymore.

False. Nordstrom isn’t the only company not falling for the rumors. In 2011 Nike spent $113 million on advertising that did not involve the Internet. Google spent $1 million on non-internet advertising that year as well. We all know these companies have some of the most brilliant mar-keting teams in the world, which is exactly why they are still using print advertisements. Madison Hildebrand, a star of the Bravo show, “Million Dollar Listings,” has had massive success as a Realtor and is well-known by most television view-ers and Internet users. However, it should not be assumed that every potential client uses the Internet or watches cable TV. Mr. Hildebran knew this and recently advertised himself in a four-page spread in Homes and Land magazine. If busi-ness thriving people and companies are still using print advertisements then why shouldn’t everyone else?

What makes print ads “work”?

Great question. As stated before, print is easy to target. People also tend to pay more attention to mate-rial they are subscribed to rather than a pop-up ad or an ad interrupt-ing their music on Pandora. Websites tend to be skimmed quickly, adver-tising on TV or on the Internet is only there as long as it is paid to be there. A magazine tends to find a home on a coffee table or in a dentist’s office where it is picked up and sifted through by dozens of people over several months. The Internet these-days is full of scams and fake “news”. Print advertisements are more trust-worthy to potential customers. The

Internet has helped bring us a fast-paced world. Many people turn to the Internet to accomplish something quickly and efficiently, but that is not necessarily the best place for an advertisement. Can you recall the last advertisement that popped up on your computer screen? What about the company that was adver-tising itself? Most likely not, and you are not alone. These ads don’t pique most people’s attention. It is not uncommon for somebody to unwind by reading a magazine or newspa-per. In a relaxed environment is where information, in this case an advertisement, will be noticed.

New advertising techniques are always better.

Wrong again. “Out with the old, in with the new” shouldn’t apply to everything. People may argue that spreads with advertisements are flipped past, happens to the hun-dreds of emails consumers receive a day titled “Cyber Monday sale” “Going, going, gone” or “All orders over $50 take $5 off!” They go direct-ly into the deleted items folder. Although the saying “print is dead” has been echoing through the adver-tising world, research shows differ-ently. Penn State conducted a study, that concluded that print ads stick with customers more than online ads. Print is also an advertising tech-nique that can stimulate multiple senses. Take sample perfume ads in

magazines, or shopping catalogs, or sample textures in home improve-ment magazines and pamphlets. A potential customer is not going to be feeling, or smelling anything through the Internet. By stimulating senses, an advertisement becomes more interesting and memorable.

Internet and multimedia ad-vertising is important

True. Although print advertising continues to prove itself in the mar-keting world, other forms of adver-tising are important as well. Many print ads include the company’s website to provide more informa-tion. Integrated marketing programs have been proven to be extremely successful if correctly executed and almost always involve print ads.

The use of print advertising is increasing.

True. The biggest myth of all is that print advertising is quickly slip-ping through the cracks. This couldn’t be more wrong. According to Media Radar, the medical and pharmaceutical, home furnishings, technology, and beverages categories have all published more print ads than the year before. Ralph Lauren, Chanel, Calvin Klein and Louis Viton amongst other luxury brands have dramatically increased their print ad spending since 2012.

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Winterization ...continued from page 3

Before the StormFor reference, I have summarized

that checklist for use at your proper-ties.Winterization Checklist

• Fire sprinkler systems:

• Dry systems: check operation of air compressors/gauges and verify the system is completely drained down. Note: if a water flow fire alarm is received on a dry system and not due to an actual fire, the water flow is oftentimes caused by a compressor failure and therefore the system will need to be drained down once the compressor is repaired or replaced.

• Wet sprinkler systems: check to ensure they have antifreeze in them.

• Vacant tenant spaces:

• Those with operable HVAC systems: set the thermometer to at least 40 degrees.

• Those without operable HVAC systems: provide space heaters to maintain a temperature of at least 40 degrees.

• Fire riser/valve rooms: verify that

the heat is turned on to at least 40 degrees to prevent freezing pipes.

• Irrigation system: verify that the landscape contractor has fully drained down the system to pre-vent freezing pipes.

• Exterior water faucets (hose bibs): shut off the water source, drain and cover with insulated covers.

• Basement crawl spaces: inspect to ensure exposed domestic water lines are insulated to prevent freezing. Close any openings exposed to the outside, consider insulation, and/or a heat source.

• Canopy/soffit crawl spaces: inspect to ensure that exposed domestic water lines are insulated to prevent freezing. Close any openings exposed to the outside, consider insulation, and/or a heat source. Refer to the above regard-ing canopy fire sprinklers.

• Snow plowing/sanding/shovel-ing/de-icing service: contact the landscaping and/or parking lot sweeping companies to arrange for sidewalk, parking lot and drive lane snow services. Define the scope/level of service ahead of time and arrange for auto-deploy-ment.

• Store snow shovels, a supply of granular de-icer and a spreader

onsite so that the maintenance staff is able to clear snow on the sidewalks.

• Roof drains/downspouts: ensure that roof drains and downspouts are clear and in working order so that snow melt is able to appropri-ately drain from the roofs.

• Disconnect all outside hoses: any-time outside weather is freezing all hoses on the outside of the building should be disconnected.

How to RespondOnce the snow and ice hits, ten-

ants may be calling to report broken pipes, property conditions and other issues. It is important to have an office open and staff on standby to receive those calls and coordinate additional services. Verify that your snow service vendor has in fact dis-patched a crew to your property. Maintenance staff needs to be prepo-sitioned with snow blowers, chain-saws and vehicles with studded tires allowing them to travel to properties so they can provide the required ser-vice. You may want to consider hav-ing a supply of sleeve clamps or “Shark Bite” couplings on hand for repairing pipe breaks in addition to a heat gun to melt frozen pipes.

If the snow is very heavy and icy crews need to be dispatched to clear

the snow from buildings with flat roofs, in particular the drains need to be cleared so the water can drain off the roof as the snow melts instead of leaking into the tenant spaces. This is important because the weight of snow and ice can stress the roofs and cause them to cave in. Additionally, you also need to keep the air han-dlers clear of snow. If snow blocks the air flow it stresses the compres-sors and then you can’t generate heat either.

PreparationPreparation is the name of the

game. The more you inspect, plan and prepare for catastrophe the more likely it is that you and your proper-ties will survive them with minimal damage. Make sure your documen-tation is well organized with prop-erty maps, and the locations of water shut offs and roof drains are easily available for you and your staff to access. Also, make sure to have 24-hour maintenance staff, plumb-ers, electricians and emergency response contractors’ phone num-bers in your cell phones to speed up your response. Finally, you will need easy access to your property insur-ance agents just in case you have a loss and need repair approvals and checks right away.

continued on page 10



Clifford A. Hockley is President of Bluestone & Hockley Real Estate

Services, greater Portland’s full service real estate brokerage and property man-

agement company. Founded in 1972, Bluestone & Hockley’s staff totals near-ly 110 employees, including 20 licensed brokers. The company’s property man-

agement division serves commercial buildings, apartments, condominium

associations and houses in the Portland / Vancouver metro area, while the bro-kerage division facilitates both leasing

and sales of investment properties throughout Oregon and Washington.

Cliff earned a degree in Political Science from Claremont McKenna

College and holds an MBA from Willamette University. He is a Certified Property Manager and has achieved his

Certified Commercial Investment Member designation (CCIM). Bluestone

& Hockley Real Estate Services is an Accredited Management Organization (AMO) by the Institute of Real Estate

Management (IREM). Cliff is a member of the Institute of Real Estate

Management and was named Certified Property Manager of the year in 2001

and 2003. Cliff is a frequent contributor to industry newsletters.

Bluestone & Hockley offers custom-ized brokerage, property and asset man-agement, as well as maintenance servic-

es to property owners and investors throughout the Portland/Vancouver

metro area. The company’s full-service approach benefits busy property owners

and investors, who know they can count on Bluestone & Hockley for high quality real estate services start to fin-

ish.

Winterization ...continued from page 9

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By: Neal Thornberry, Ph.D.

Innovation is not for the faint of heart, as Galileo learned when he said that the Earth revolved

around the sun. He was scorned, threatened with death and eventu-ally put under lifetime house arrest.

Innovators are not always wel-come guests even within their own organizations, and their challenges are heightened by a dangerous orga-nizational intersection: where Complexity meets Wackiness. The more complex an organization, the more difficult it is for the innovator to figure out where to go with a good idea and how to weave it through the organization to implementation and eventually value creation.

Growing organizations cannot avoid complexity. They add process-es and people, divisions and special-ists. Since we can now measure almost everything, they often believe if one measurement captured in a report is good, then more are better.

One company, with whom I worked, learned that its sales people were losing a month of selling each year because of the time spent filling out reports required by the finance department. This example of com-plexity gone awry drove the organi-zation into Wackiness -- sacrificing revenues for reports.

There are many other examples of Wackiness getting in the way of innovation – and examples of stealth innovators circumnavigating them. One of my favorites is the tale of Jim

Repp, head of Jeep design at the old Daimler Chrysler Corp.

Jim knew that many Jeep lovers spent thousands of dollars upgrad-ing their Wranglers for serious off-roading. This gave him the great idea for a mass-produced Jeep with all the upgrades built in at half the cost. When he shared his idea with mar-keting, they said there was no mar-ket for that type of vehicle and besides, you’re an engineer, not a marketer.

Undeterred, Jim and a small band of innovators I call Innovation Judo masters built a secret prototype. They took it out on the Rubicon Trail in California for off-road trials and invited the senior executives to watch. Jim’s prototype outperformed the other Wranglers and, as crowds

gathered around it, the executives saw their enthusiasm. They immedi-ately authorized production of what is now a best-selling icon, the Jeep Wrangler Rubicon.

Fortunately for Chrysler and other companies, there are a few pas-sionate innovators like Jim who won’t let go of their idea no matter what. They’ve developed a special set of skills (I call them Innovation Judo) that allow them to bypass those blocks.

They are:

• Discipline

• Leverage

• Speed

• Openings

• Circling

• Unbalancing

• RedirectionThe Jim Repp story illustrates the

application of several of these prin-ciples. The discipline to plan for building a secret prototype; leverage in getting senior executives to sup-port his idea; utilizing the opening at the Rubicon Trail; and then using the surprise (a tactic of unbalancing) of a

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• Executive Director – Jim Wiard • President – Kris Buker – Vice President – Brett Stevens • Secretary – Heidi Daniel• Treasurer – Becky Sanders • Vice President of Suppliers Council – Rob Pendleton • Immediate Past President – Gail Duke

18300 Cascade Ave. S., Suite 130Tukwila, WA 98188

(425) 656-9077(425) 656 9087 (fax)

[email protected]

Honoring EmployeesOn February 12th, the apart-

ment industry will celebrate our best and brightest em-

ployees at the 5th annual Emerald Awards gala. The Emerald Awards are the industry’s way to honor site employees and regional employees for their outstanding efforts to serve residents, owners and management companies.

Companies nominate their “best of the best” in 28 different award categories such as Leasing Agent of the Year, Maintenance Supervisor of the Year, or Social Awareness. Property nominations are also avail-able in multiple categories including New Development of the Year and Curb Appeal.

Nominators identify the unique attributes of their nominated employ-ees or properties and why they feel they rise above their peers. Nominees are allowed an opportunity to describe how they contribute to the success of their properties and their company.

A rigorous judging process then takes place for all nominees. Care is given to ensure unbiased judging at multiple touch-points. A weighted grading system is used to evaluate

peers in each category. Finalists are determined through

this process, and another round of judging occurs. In certain categories, WMFHA flies association executives from National Apartment Association affiliates across the country to our office to be a part of a judging panel, conducting interviews of finalists to determine final overall scores.

Nominees are judged on their merits: their experience, their attri-butes, their dedication and their pro-fessionalism. They are scored against their peers in the same category, regardless of company affiliation.

In this process, the stars shine and all grades are assessed to decide the overall award recipients in each cat-egory. While the judging process is competitive, it is also very reward-ing, as employees exhibit the quali-ties that got them recognized.

Although there can be only one award recipient in each award cate-gory, every nominee is a winner. The honor of being nominated by one’s company, of being recognized for one’s efforts and commended for their service, is truly the most special part of the Emerald Awards.

Finalists and award recipients are

honored in a black tie gala celebra-tion at the Bellevue Grand Hyatt Hotel. An elegant dinner, live band and statuesque awards await those who will receive the ultimate honor. Emcee Brad Goode from KOMO 4 Morning News will again entertain the over 900 attendees at an event reminiscent of the more famous awards show in Hollywood.

The Washington Multi-Family Housing Association is grateful to coordinate the prestigious Emerald Awards, allowing management com-panies a venue to recognize their

talented employees. On-site employ-ees are the unsung heroes in our industry and seeing the genuinely humble appreciation these employ-ees have when nominated is tremen-dously rewarding.

We hope to see everyone at the award dinner on February 12th, and for those companies who weren’t able to nominate their deserving can-didates this year, nominations for the 2016 Emerald Awards will open in August, 2015.

CONGRATULATIONS TO THE 2015 EMERALD AWARDS FINALISTS!

After the initial judging process of over 350 nominations, the following have been selected as Emerald Finalists. The winners will be announced at the Emerald Awards Gala on the evening of February 12, 2015.

For information about the Emerald Awards, visit www.wmfha.org or call 425.656.9077

COMMUNITY MANAGER OF THE YEAR (1-150 UNITS ) Amanda Sommer, 206 Bell– Greystar Anissa Olberg, Cadence- Pinnacle Bonni Gruelle, Abbey Ridge- Pinnacle Jessica Fern, Rose Crest- FPI Leanna Bell, Aspen Creek- Weidner COMMUNITY MANAGER OF THE YEAR (151-300 UNITS) Brenda Freelen, Lakewood Meadows - Independent Living Chad Wheelock, Solara - Simpson Dale Gentle, Plum Tree Park - Pinnacle Deena Franklin, Atrium on James - FPI Kayla Stevens, Redmond Square - Greystar Sherilyn Butler, The Outlook I & II - Greystar COMMUNITY MANAGER OF THE YEAR (301+ UNITS) Amanda Hirtzel, Ridge & Shores Apartment Homes - Weidner Andrea Hernandez, The Ridgedale - Greystar Jolene Hively, Central Park East - Greystar Kylee Beveridge, Landing at Dashpoint - Bridge Megan Vallor, The Wave/The Nolo - Pillar COMMUNITY MANAGER OF THE YEAR (Affordable) April Owens, Balfour Place - Greystar David Bierer, Fern Ridge - Greystar Larissa Ranz, Coronado Springs Apartments - Indigo Nicholaus Biela, Borealis Apartments - Greystar Victor Chin, Victoria Park - Independent Living ASSISTANT COMMUNITY MGR. OF THE YEAR (1-300 UNITS) Crystal Taylor, The Heights at Bear Creek - Greystar Freda Eyre, Woodcreek Apartments - Thrive Jenna Searles , Charter Club - Pinnacle Kim Gelderman, Island Park Apartment Homes - Weidner Pascal Coufal, Dexter Lake Union - Alliance ASSISTANT COMMUNITY MGR. OF THE YEAR (301+ UNITS) Amanda Campbell, Landing at Dashpoint - Bridge Hillary Guesnier, The Onyx - FPI Jenn Erickson, Carriages at Fairwood Downs - Pinnacle Linda Maggerise, Bay Court at Harbour Pointe - Greystar Nicole Kellogg, The Nolo/The Wave - Pillar LEASING CONSULTANT OF THE YEAR (1-300 UNITS) Hannah Weber, Aspen Creek - Weidner Julaine Hatcher, Chandlers Bay - Bridge Lauren Smith, Tera Apartments - Windsor Leslie Snider, Interurban - Independent Living Shawnte Pearson, The Lodge at Redmond Ridge - Simpson

LEASING CONSULTANT OF THE YEAR (301+ UNITS) Lauren Reel, The Nolo/The Wave - Pillar Melissa Goldberg, Bay Court at Harbour Pointe - Greystar Sasha Batura, A'Cappella Apartments - Weidner Stefanie Snatic, Resort at Forbes Creek - Greystar Stephanie Laeger, The Mill at Mill Creek - Greystar ROOKIE OF THE YEAR—OFFICE Chia Cha, Charter Club - Pinnacle Cindy Johnson, Plum Tree Park - Pinnacle Jeannie Wilcox, The Noble - Madrona Ridge Saniya Regmi, Watercrest - Weidner Sheidy Rantung, Heron View - Weidner MAINTENANCE SUPERVISOR OF THE YEAR (1-150 UNITS ) Jake Martin, Marketside Flats & Post Alley Court - Greystar Jose Castro, The Artiste Apartments - Weidner Miles Welch, The Noble - Madrona Ridge Richard Hughes, The Corydon - Pillar Robert Wurth, Cadence Apartments - Pinnacle MAINTENANCE SUPERVISOR OF THE YEAR (151-300 UNITS) Aidin Edraki, The Park in Bellevue - Greystar Francisco Dorantes, Woodside East Apartments - Greystar Nick Webster, The Hamptons - Bridge Octavio Romero, On the Green - Madrona Ridge Steve Korom, Brookside Village - Greystar MAINTENANCE SUPERVISOR OF THE YEAR (301+ UNITS) Bassim Barbour, The Cove Apartment Homes - Weidner Eddie Zimmerman, Bridges at Northcreek - Thrive James "Sparky" Regis, Metro 112 - Simpson Jamie Hannity, On the Park - Madrona Ridge Tyler Patton, Stadium Place - Pillar MAINTENANCE TECHNICIAN OF THE YEAR (1-300 UNITS) Brandon Schnoor, The Hamptons - Bridge Christy Rolfe, Liberty Ridge - ConAm Enoc Castillo, Island Park Apartment Homes - Weidner Lindasue Banks, Chandlers Bay Bridge - Bridge Ricky Burnett, The Lyric - Pillar MAINTENANCE TECHNICIAN OF THE YEAR (301+ UNITS) Ben LaFontaine, Summerwalk at Klahanie - Holland Dave Wendt, Via6 - Greystar Federico Chavez, Surprise Lake Village - Bridge Jennifer Aldrich, The Mill at Mill Creek - Greystar Robert Earl Carpenter, Jr., Surprise Lake Village - Bridge

ROOKIE OF THE YEAR—MAINTENANCE Kevin Campbell, Village at Seeley Lake - Bridge Pablo Montano, Belara at Lakeland - Greystar Sam Hale, The 101 - Pillar Sergey Krivtsov, Sherwood Apartments - Weidner PORTFOLIO MANAGER OF THE YEAR Angela Dean-Hill - Independent Living Betsy Schanno - Pinnacle Jennifer Fisher - Holland Karyn Grindstaff - Greystar COMMUNITY OF THE YEAR (1-150 UNITS) Avion Apartments - Greystar The 101 - Pillar Woodlands @ Forbes Lake - Independent Living COMMUNITY OF THE YEAR(151+ UNITS) Alara Harbour Pointe - Greystar Breckenridge Apartments - Weidner The Lyric - Pillar COMMUNITY OF THE YEAR—AFFORDABLE Addison on Fourth - Pinnacle Arrowhead Gardens - Independent Living Cambridge Cove Apartments - Guardian College Glen Apartments - Greystar Pilchuck Ridge - Guardian Rainier Glen Apartments - Guardian NEW DEVELOPMENT OF THE YEAR (1-150 UNITS) Columbia Gardens - Independent Living Gatsby Apartments - Greystar Joseph Arnold Lofts - Greystar Sunset Electric - Greystar NEW DEVELOPMENT OF THE YEAR (151+ UNITS) AMLI Mark24 - AMLI AMLI South Lake Union - AMLI Stadium Place - Pillar The Outlook - Greystar Via6 - Greystar NEW DEVELOPMENT OF THE YEAR (Affordable) Interurban Senior Living - Independent Living Urban Center - FPI Management Quilceda Creek - FPI Management

RENOVATED COMMUNITY OF THE YEAR Cadence Apartments - Pinnacle Hubbard's Crossing - Thrive Olympic Village - Palladium Tower 801 - Pinnacle

CURB APPEAL (1-150 UNITS) Bentley House - Thrive Compass - Pinnacle Jasper Apartments - Indigo Olympic and Sound View - Greystar Riverside Landing - Guardian

CURB APPEAL (151+ UNITS) Arrowhead Gardens - Independent Living Bailey Farm Apartments - Greystar Boulder Creek - Simpson On the Park - Madrona Ridge Resort at Forbes Creek - Greystar The Park in Bellevue - Greystar

SOCIAL AWARENESS AWARD—INDIVIDUAL Annie Jacobsen - Independent Living Emily Svensson - Prometheus Valerie Hill - Greystar

SOCIAL AWARENESS AWARD—TEAM Hero Creative Independent Living/SHAG Prometheus Real Estate Group

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Effective January 1, 2015, Jancyn is acquiring Shoptalk and they will serve your employee evaluation needs. It has been my extreme pleasure to work with all of you over the past 20 years. Yet, it is now time for me to move onto my next great adventure. I am willing to offer leasing training on a limited basis, as an independent consultant. However, I will no longer be involved in secret shopping. For now, your contact at Jancyn will be Vicki Dempsey, VP of Sales & Marketing and a managing owner. You can reach Vicki at: 408-267-2600 ext. 300 or [email protected]. I will be working closely with the Jancyn team to help ensure a smooth transition.

Thank you for trusting me with your employee evaluations over the years, and now with the transition moving forward. Wishing you joy, peace, and prosperity in 2015!

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Secret ShopperAsk TheNorthwestNorthwest

As strong market conditions continue to prevail in the Pacific Northwest, many

apartment communities are main-taining high occupancy numbers, and others are full with a waiting list. Conditions are optimum for rais-ing rents and increasing property values. Residents of these communi-ties are getting an education in the high cost of relocating and are opting to stay put, even if they receive a significant rent increase.

What all this means is that those on the leasing end are in the driver’s seat: It is a seller’s market! However, just because you are full does not mean you quit selling or stop provid-ing quality customer service. Unfortunately, after several years of tough market conditions, some leas-ing staffs are ready for a break and they are taking it during regular office hours!

Based on some disturbing trends that started showing up a couple of years ago and that are still going strong, the Secret Shopper is won-dering if some leasing consultants have the following questions:

• When I have no vacancies or

unrented notices, is it really necessary for me to answer the phone, return calls or set appointments?

• When I have no apartments available to rent, do I really have to keep appointments that conflict with my lunch break?

• When my community is full and I’m having a slow day, do I really need to stay open until closing? While the above are “imaginary”

questions, I can’t help but wonder how many of these are real, unspo-ken thoughts in the minds of some leasing employees.

It may be true that the “leasing” side of the rental office becomes less challenging when your community is 100% occupied. However, even without apartments to rent, you have an existing customer base. Your resi-dents still must be able to conduct business with you in order to renew leases, pick up packages, request maintenance service, etc. If you choose not to answer your phone, return calls or keep your office open, then you are not providing the level

of customer service you promised when they were prospective renters

Regarding your 100% occupancy Congratulations! - It took a lot of hard work to get there. Of course, depending on how you treat your residents will determine if you STAY there. Oh, and one last thing: How are you coming along with your waiting list? Are you keeping in touch with the people who expressed interested in renting at your commu-nity or did you just take their name and number to “humor them?” Remember: The future is unpredict-able, but a current, updated waiting list is a “sure thing.” Instead of “clos-ing up shop” early on a slow day, how about making some follow up calls. You and your future renters will be glad you did!

If you are interested in leasing train-ing or have a question or concern that you would like to see addressed, please

reach out to me via e-mail.

ASK THE SECRET SHOPPER

Provided by: Joyce (Kirby) Bica

former owner of Shoptalk Service Evaluations

Phone: 425-424-8870E-mail: [email protected]

Copyright© Joyce (Kirby) Bica

Visi t us atwww.RentalHousingJournal .com



Even first-time buyers with low down-payments can expect to pay just 17 percent of their

income toward mortgage payments as rents soar

• Home buyers should expect to spend 15.3 percent of their incomes on mortgage payments for a typical home. Renters should expect to pay twice as much -- 29.9 percent of their median incomes -- to rent.

• Likely first-time, 23-to-34-year-old buyers should expect to spend 17.4 percent of their monthly income on house pay-ments. Historically, they spent about 22.5 percent of their income to purchase a home.

• It was 30.8 percent more afford-able to buy a home in the third quarter than it was in the pre-bubble years (1985 -1999). It was 19.8 percent less affordable to rent, compared to the pre-bubble years. It's more affordable to buy a

home now in most U.S. metros than it was 15 years ago, even for millen-nials putting down less money on a home, according to a Zillow analysis of third quarter income and home value data. Renters, however, con-

tinue to pay an increasing share of their income to their landlords as rents soar and incomes remain flat.

On average, U.S. home buyers making the nation's median income and purchasing the typical U.S. home spend 15.3 percent of their income on their monthly house pay-ment, down from the historical norm of 22.1 percent during the pre-bubble period from 1985 to 1999. On aver-age, U.S. renters spent 29.9 percent of their monthly income on rent in the third quarter of 2014, up from 24.9 percent historically.

Younger buyers, earning less money in many areas and making smaller down payments on a home, should expect to spend slightly more of their income on mortgage pay-ments – 17.4 percent. Homes for younger buyers remain affordable thanks to continued low mortgage interest rates and their tendency to shop for less expensive homes.

Continuously rising rents across the country could drive more people into the home-buying market, but they also make it more difficult for first-time buyers to save for a down payment. Washington, DC renters can expect to spend 27.1 percent of their income on rent, up from 16.2 percent historically. In Miami, rent as

Buying Twice as Affordable as Renting Says Zillow Study

Metro Area Q3 2014 Me-dian Household Income

Zillow Home Value Index

% of monthly income devoted to mortgage payments in Q3

% of monthly income devoted to mortgage payment for first-time home-buyers in Q3

% of monthly income devoted to rent in Q3

United States $53,620 $176,500 15.3% 17.4% 29.9%New York, NY $69,337 $381,600 25.6% 30.6% 40.5%Los Angeles, CA $60,650 $531,000 40.8% 50.7% 47.9%Chicago, IL $62,652 $188,200 14.0% 16.2% 31.5%Dallas, TX $61,310 $148,400 11.3% 14.5% 27.7%Philadelphia, PA $64,823 $202,700 14.6% 18.1% 28.8%Houston, TX $59,953 $150,300 11.7% 15.0% 29.4%Washington, DC $92,610 $359,300 18.1% 24.0% 27.1%Miami, FL $47,896 $205,200 19.9% 21.2% 44.5%Atlanta, GA $59,927 $151,900 11.8% 15.2% 24.1%Boston, MA $75,059 $362,700 22.5% 26.3% 34.1%San Francisco, CA $77,409 $689,900 41.5% 43.3% 45.9%Detroit, MI $52,694 $113,500 10.0% 10.6% 24.1%Riverside, CA $54,085 $277,900 23.9% 28.8% 36.4%Phoenix, AZ $53,487 $193,700 16.9% 20.9% 27.3%Seattle, WA $70,352 $333,700 22.1% 27.3% 30.8%Minneapolis, MN $69,569 $213,100 14.3% 17.7% 26.1%San Diego, CA $63,607 $466,100 34.1% 42.9% 42.5%St. Louis, MO $54,746 $129,100 11.0% 12.5% 24.1%Tampa, FL $46,050 $145,400 14.7% 14.7% 32.4%Baltimore, MD $72,010 $241,800 15.6% 19.0% 28.5%Denver, CO $64,120 $271,200 19.7% 25.4% 32.9%Pittsburgh, PA $51,668 $123,800 11.2% 11.7% 26.6%Portland, OR $60,071 $274,100 21.2% 28.3% 30.5%Sacramento, CA $59,161 $325,800 25.6% 31.1% 32.2%San Antonio, TX $51,884 $144,300 12.9% 15.1% 29.6%Orlando, FL $48,905 $168,100 16.0% 19.7% 32.1%Cincinnati, OH $55,093 $135,900 11.5% 13.9% 26.0%Cleveland, OH $49,842 $120,600 11.3% 13.9% 27.7%Kansas City, MO $58,212 $137,400 11.0% 13.2% 24.2%Las Vegas, NV $51,609 $181,600 16.4% 19.3% 27.5%San Jose, CA $99,230 $813,500 38.2% 43.7% 37.9%Columbus, OH $55,836 $144,300 12.0% 14.1% 27.0%Charlotte, NC $55,332 $155,900 13.1% 15.3% 26.3%Indianapolis, IN $55,238 $128,100 10.8% 13.5% 25.8%continued on page 23



According to the Society of Human Resource Management {SHRM} over

50 percent of the information pre-sented on a resume by a job candi-date may be false or misleading. These are alarming statistics, and as the executive of your property man-agement company, it continues to be increasingly important to under-stand the mindset of the job candi-dates that are applying for positions within your company. This article will help you and your company strengthen your reference checking process and eliminate those who will not be a perfect fit, long before a position is ever offered.

Some reference checking statis-tics: A recent SHRM survey at www.shrm.org was sent to 2,640 human resource members regarding refer-ence checking. The survey conclud-ed that job candidates frequently present misleading information about their length of stay with for-mer organizations, their past/cur-rent salary levels and their college credentials. More specifically, 53 percent of companies involved in this survey discovered falsified infor-

mation about length of employment from job candidates and 51 percent discovered falsified information about past salaries. In addition, 61 percent of job candidates falsify their college credentials, a credential that can be easily researched during the reference checking process.

Tip From The Coach: Based on the above survey information, con-ducting thorough reference checks must continue to be an important step in the selection and interview process of hiring SuperStars for your property management company.

Developing a reference checking process: The first step is to deter-mine how reference checks are going to be done in your property manage-ment company and to establish or strengthen your written policy for how reference checks fit into your interview process. With some of our property management clients, their human resource department handles this important step before a formal job offer is made. With other prop-erty management clients, all hiring executives handle their own refer-ence checks, based on the specific level of position being offered or the

compensation range being present-ed. As for references, three or more business references should be sup-plied by a job candidate as early in the interview process as possible. We highly recommend asking for references early in the interview pro-cess because this will give your hir-ing executives additional time to contact each organization submitted by a job candidate. This also means that your hiring executives will not be rushed to do reference checks in the final hours before making a job offer. This makes for a more thor-ough and complete reference check-ing process.

Tip From The Coach: In addition to reference checks, many property management companies are now asking permission to do background checks, credit checks and criminal checks as part of their hiring process. Based on the SHRM survey statistics above and your own professional experience, have you recently reviewed your reference checking process? This process will help to link talented SuperStars to compati-ble positions within your property management company and will

reduce the chances of hiring low per-formers.

Questions to ask when calling a reference: It has been our experience that all of our property management clients want to create their own cus-tom reference checking form. Here are some sample questions to get you started with yours: How would you characterize his/her success with your company? How would you characterize his/her energy level? How was this person viewed by his/her peers? Describe the types of decisions this person made on a daily basis? How did this person manage their time? Tell me about a disagreement or a challenging situa-tion and how this person handled it? Specifically, how was this person paid? Why did this person leave your company? Based on what you shared today, would you hire this person back?

Tip From The Coach: We know that many companies are no longer giving references on past employees based on legal and liability concerns. Most of our property management clients now ask a job candidate to

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Fo r e c a s t e r s have begun to warn of

potential over-building in the multifamily sector,

but concerns from pundits are pre-mature. Multifamily development in the U.S. has yet to meet pent-up demand, and annualized effective rent growth was 4.1 percent in Au-gust 2014, the highest since October 2011. At the current rate of develop-ment, we anticipate production ca-pacity and demand will reach equi-librium by mid-2015. Subsequently, the industry could enjoy up to six additional years of sustainable pro-duction, if developers and lenders carefully monitor demand and mod-ify deliveries accordingly. It has been said that multifamily is in the middle innings of an extra inning game.

Statistics on the U.S. supply of multifamily units clearly show the sector is not in danger of being over-built, although a few markets are the exceptions. Even areas such as Northern Virginia, which recently experienced oversupply conditions, are showing signs of improvement. Here are notable signs of a robust

multifamily sector:

• The national multifamily occu-pancy rate rose to 95.2 percent in August 2014 after being at 95 per-cent since May, according to research firm Axiometrics. Occupancy rates are holding steady despite the new supply from developers.

• There is fresh demand each year for 400,000 to 450,000 units, but developers are completing only 325,000 units a year.

• 1 to 1.25 percent of the existing multifamily inventory in this country is demolished each year, a metric that when not taken into consideration, skews perception of demand. With considerable attention currently on urban development, the trend will con-tinue in the near term.

“In The Top 100 U.S. Markets, Demand for Apartments was More than Double that of the Number of Units Delivered.”

Fundamentals remain strong on the demand side as the need for rental units continues to rise. In the top 100 U.S. markets, demand for

apartments was more than double that of the number of units deliv-ered, with 55,561 units completed and 129,162 units absorbed, accord-ing to a second-quarter 2014 report from MPF Research. Job growth is expected to continue for the next five years, according to economists at Axiometrics, barring an unforeseen shock to the economy. Job growth will drive demand for multifamily projects, and as more job formation drifts to the suburbs, so will rental demand. In a somewhat surprising observation, the National Multifamily Housing Council reports that almost 50 percent of new renters are Baby Boomers, rivaling Millennials as the biggest driver of demand. Baby Boomers are becom-ing “renters by choice” who trade house and yard maintenance for con-venient live/ work/play environ-ments.

For the time being, several factors are holding the supply/demand ratio in check. The number of Millennials entering the renter pool continues to increase a circumstance that will not change in the near term. Millennials will constitute 24 million new households between 2015 and

2025, thus driving up demand for rentals and starter homes, according to “The State of the Nation’s Housing 2014,” a report by the Joint Center for Housing Studies of Harvard University. Immigration is also driv-ing additional household formation in ever-increasing numbers. Renter growth in 2013 remained well above the 400,000 average annual absorp-tion rates of the last few decades, the study reports. In addition, stringent mortgage underwriting and growing student debt push homeownership further out for many young individ-uals and families.

Also curtailing supply are barri-ers to entry, which exist in coastal markets as a result of the high costs of land and construction. Artificial barriers in other U.S. markets are a consequence of zoning restrictions and public opposition to higher den-sity projects that are necessary to make some deals financially feasible.

Finally, the lack of skilled labor is putting stress on construction capac-ity, driving up labor costs and length-ening construction timetables. Many former and would-be construction workers have been lured to the oil

Multifamily Green LightU.S. Development Pace is Sustainable for Years to Come

continued on page 24



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a percentage of income has risen from 26.5 percent before the bubble to 44.5 percent currently.

"Despite rising home values, home ownership remains very acces-sible for buyers that can scrape together a down payment – even if that down payment is relatively modest – find a home to buy and secure financing," said Zillow Chief Economist Dr. Stan Humphries. "But what keeps me up at night is the fact that it still remains so difficult for so many potential buyers to make those particular stars align, largely because renting is so unaffordable these days. It's very difficult to come up with a down payment when so much of your monthly paycheck – especially on an entry-level salary – is going to your landlord instead of into your savings. Buying conditions are get-ting better every day, and in time the allure of fixed housing payments and building wealth through home equity will draw more buyers out of rentals and into home ownership."

Home ownership rates in the U.S. have steadily declined, even as the housing market has recovered, in part because millennials have delayed their entry into the housing market. But it is likely that by the end of 2015, millennials (aged 23-34) will overtake Generation X as the biggest group of U.S. home buyers, a transition aided by widespread home affordability.

The Coach – Reference Checks ..continued from page 21

sign a reference authorization form giving permission to their previous employers for a full and candid ref-erence while also waiving any legal liability. In addition, we strongly advise our clients to call each refer-ence given by a job candidate and when the reference conversation is complete --- ask this person, “Is their someone else within your company who can give me an additional refer-ence on this job candidate?” Speaking to a second person within the same company is the secret to getting accurate and detailed references.

Want to hear more about this important topic or ask some addi-tional questions about how to build a custom reference checking form or to see a sample reference authorization form? Send an E-mail to [email protected] and The Coach will E-mail you a free TeleForum invita-tion.

Author’s note: Ernest F. Oriente, a business coach/trainer since 1995

[33,000 hours], serving property man-agement industry professional since

1988--the author of SmartMatch Alliances™, the founder of

PowerHour® [ www.powerhour.com ], the founder of PowerHour SEO [ www.

powerhourseo.com ], the live weekly

PowerHour Leadership Academy [ www.powerhourleadershipacademy.

com/pm ] and Power Insurance & Risk Management Group [ www.pirmg.com ], has a passion for coaching his clients

on executive leadership, hiring and motivating property management

SuperStars, traditional and Internet SEO/SEM marketing, competitive sales

strategies, and high leverage alliances for property management teams and

their leaders. He provides private and group coaching for property manage-

ment companies around North America, executive recruiting, invest-

ment banking, national utility bill auditing, national real estate and apart-

ment building insurance, SEO/SEM web strategies, national WiFi solutions

[ www.powerhour.com/propertyman-agement/nationalwifi.html ], powerful tools for hiring property management

SuperStars and building dynamic teams, employee policy manuals [ www.

powerhour.com/propertymanagement/employeepolicymanuals.html ] and

social media strategic solutions [ http://www.powerhour.com/propertymanage-

ment/socialmedialeadership.html ]. Ernest worked for Motorola, Primedia

and is certified in the Xerox sales meth-odologies. Recent interviews and arti-

cles have appeared more than 8000+ times in business and trade publications

and in a wide variety of leading maga-zines and newspapers, including Smart

Money, Inc., Business 2.0, The New York Times, Fast Company, The LA Times, Fortune, Business Week, Self

Employed America and The Financial Times. Since 1995, Ernest has written 225+ articles for the property manage-ment industry and created 400+ prop-erty management forms, business and marketing checklists, sales letters and

presentation tools. To subscribe to his free property management newsletter go

to: www.powerhour.com. PowerHour® is based in Olympic-town…Park City,

Utah, at 435-615-8486, by E-mail [email protected] or visit their

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and gas industry by higher wages, leaving the development communi-ty without enough tradespeople. While commodity prices are increas-ing moderately, contractors are pushing up margins to recoup losses incurred during the recession, and the additional costs will price some projects outside the realm of feasibil-ity. The same labor dynamic is slow-ing the building of homes, which, consequently, also adds to the num-ber of people in need of rental units.

Opportunity still abounds in the robust multifamily sector, but future projects will face greater scrutiny from debt and equity sources, par-

ticularly as interest rates begin to rise. The “easy” opportunities are largely done and developers must be creative in originating the next round of development opportunities. As long as developers exercise con-straint, it appears we will have a number of years of positive invest-ment environment for multifamily.

By Mark Culwell, Managing Director, Multifamily Development

Transwestern Development [email protected]

214.534.1458

Multifamily Green Light ...continued from page 22

Jeep that looked like all the other jeeps on the trail but outperformed them.

Since it takes so long to correct the dangers at the Complexity/Wackiness intersection, identifying and supporting a few Innovation Judo Masters can go a long way in overcoming some of the most diffi-cult barriers to innovation.

Neal Thornberry, Ph.D., is the founder and CEO of IMSTRAT, LLC a consulting firm that specializes in help-ing private and public sector organiza-tions develop innovation strategies. He

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Innovators Beware ...continued from page 13

By Marc Courtenay

The year 2014 ended with the U.S. housing market appear-ing on the verge of a down-

turn. Sales of new homes in No-vember slipped almost 2% from the previous year according to the Com-merce Department.

Existing homes sales for November also were down 6.1%. A more disturbing trend came from a survey of U.S. home builders reveal-ing that the per-community sales pace contracted by an average of 20% in November, year over year.

This shouldn’t be a surprise to property managers who are witness-ing a surprising increase in the num-

ber of rental applications they’re pro-cessing. Residents are giving up on the so-called “American Dream”.

This is also reflected by the fact that real estate loans held by com-mercial banks in the U.S. stopped increasing back in August 2014, this according to Federal Reserve data. Seasonally adjusted, loans held declined slightly in November, the first month-to-month drop since October 2013.

The other symptom of a slowing housing market involves a decline in the Case-Shiller/S&P Home Price Index. It’s the leading measure of U.S. home prices.

Data released on Dec.30 for October 2014 showed that the pace of home prices across the country

continued to decelerate although eight cities did see prices rise faster. Both year-over-year and month-over-month figures reflected a pric-ing slowdown.

Both the 10-City and 20-City Composites saw year-over-year declines in October compared to September. The 10-City Composite gained 4.4% year-over-year, down from 4.7% in September. The 20-City Composite gained 4.5% year-over-year, compared to 4.8% in September.

The S&P/Case-Shiller U.S. National Home Price Index, which covers all nine U.S. census divisions, recorded a 4.6% annual gain in October 2014 versus 4.8% in September.

Miami and San Francisco saw prices rise 9.5% and 9.1% over the last 12 months. Eight cities, includ-ing San Francisco, Denver, and Tampa saw prices rise faster in the year to October than a month earli-er. Las Vegas led the declining annual returns with a decrease of -1.2%.

No wonder the interest rate on the benchmark 10-year Treasury bond which determines mortgage rates has plunged. In the last 6 months it has declined from 2.6% to 1.96% as of January 6, 2015. To put that drop in perspective it equals a 25% decline in the interest rate for the bond and mortgages.

This augurs well for the possibili-ty that home sales may soon be bot-toming followed by an upturn later in 2015. “After a long period when home prices rose, but at a slower pace with each passing month, we are seeing hints that prices could end 2014 on a strong note and accelerate into 2015,” says David M. Blitzer, Managing Director and Chairman of the Index Committee at S&P Dow Jones Indices.

He went on to comment, “Two months ago, all 20 cities were experi-encing weakening annual price increases. Last month, 18 experi-enced weakness. This time, 12 cities had weaker annual price growth, but eight saw the pace of price gains pick up. Seasonally adjusted, all 20 cities had higher prices than a month ago.”

Despite optimism the trend does not favor a burst of new home sales anytime soon. If mortgage rates stay low coupled with easing in the qual-ifying process perhaps more buyers will emerge.

For the time being property man-agers should seize the opportunity to attract those who can’t afford to buy a house. Vacancies should fill faster, processing applicants should be state-of-the art and your clients should be smiling all the way to the bank in 2015.

Property Managers Face Housing Slowdown as 2015 Begins

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