Daniel Hertzberg
Hummingbird Pointe
Parma, Ohio
Owner/operator: Forest City Enterprises, Cleveland Selected renovations: New amenity center with indoor pool, exercise room, and other spaces; new bathrooms, including the replacement of tubs with shower stalls; new cabinets and flooring Project cost: $6 million Investment per unit: $22,000 Rent increase per unit: $158 Rents after rehab: $658 to $1,214 Pre-rehab occupancy: 78% Post-rehab occupancy: 90% Target ROI: 10%
The Situation: Built in 1969 in suburban Cleveland, the 236-unit Hummingbird Pointe was a solid performer for Forest City Enterprises, which built, owns, and manages the 10-story property. But the building’s future was unclear. “It wasn’t a run-down and horrible property. It wasn’t a horrible business,” explains David Conway, vice president of asset management at Forest City. “There was just no growth. We had an aging building in a non-growth market, so we asked ourselves, ‘What can we do to reposition the asset?’”
The Decision: Drawing on his background working in upscale senior living, Conway thought Hummingbird Pointe offered the chance to serve a new market: value-oriented seniors living in suburban Cleveland. “Resort-style properties are great for seniors who can afford $4,000 to $10,000 a month, but what about the average person?” asks Conway, who spent $6 million and about 15 months to renovate Hummingbird Pointe with more senior-friendly features, amenities, and services. Inside the units, zero-entry shower stalls replaced bathtubs. A new, 14,500-square-foot amenity center hosts a fitness center with weights and cardio machines, a beauty salon, and an indoor swimming pool. “We did it partly to differentiate Hummingbird Pointe from the market, but it’s also a huge plus for people who like to swim,” Conway says. He also arranged a partnership with a local home health care company, which sends a nurse daily to the property during the week to do blood pressure checks, encourage wellness activities, and answer questions from residents of all ages, from octogenarians to young mothers. (While 40 percent of the building is occupied by residents who are 55 or older, Hummingbird Pointe is not age restricted.)
The Result: Both rents and occupancy rates have risen at the formerly stagnant community, whose offerings now attract both health-oriented retirees and amenity-hungry 30-somethings. And the competition has taken notice: Conway has fielded a number of inquiries about the property and its makeover from developers around the country.