Not all Remodels are the Same
While many of the participants in Multifamily Executive’s second-annual Apartment Renovation Index (ARI) focus group saw their rehabs move upward in 2010, the scope of their work wasn’t necessarily the same. For instance, MAA has been increasingly doing “lighter” rehabs, focusing more on traditional kitchen and bath upgrades. The firm invests about $3,500 to $3,800 per unit in these jobs, which is about the same investment level as it had in the past year. This helps the units move more quickly at higher rents—rent levels increased an average of $78 per unit across the 1,760 rehabbed units—but doesn’t necessarily push them from one class of product to another.
UDR’s renovation program, meanwhile, is a bit different. Instead of focusing on kitchens and baths, or trying to move a product from one class to another, it’s doing complete property face-lifts, with the singular goal of increasing rents. Of course, with such an intensive program, it can only do a couple of properties at once—last year, the firm rehabbed a more modest 250 units.
