Q1 2006 Insurance Increases
- 45% for a portfolio with heavy California earthquake exposure
- 150% for a portfolio with heavy Florida hurricane exposure
- 90% for a large portfolio with some California earthquake and Florida hurricane exposure
Source: Aon
Leasing Lessons
Convince on-site staff to raise rents.
As the apartment market recovers, some firms have been able to push rents up by as much as $50 per month in some locations. But that’s often easier said than done, even among success stories, since many young leasing agents haven’t worked in a positive operating climate and aren’t used to such pricing power. “The renters have been in the driver’s seat for so long, and [leasing] managers have just been trained to take everything that comes in the door and do what they have to do,” says Laurie Lyons, CEO of Dallas-based BH Management.
But that mindset is quickly changing. Companies are retraining on-site staff on ways to push both rents and renewal rates. The best way to train staff: Make the issue top of mind. “Managers are on site every week, and everyone is talking about raising rents, raising rents, raising rents,” says David Neithercut, president and CEO of Chicago-based Equity Residential.
In addition to getting training, leasing agents need to be confident that the unit they are selling is worth paying more for, adds Lyons. BH Management’s biggest focus this year is the upgrade of all units to include such small details as nickel-finish cabinet doorknobs and fresh light-switch plates. “We feel we are giving the managers something to work with,” says Lyons. “If we can train them and convince them they truly have this beautiful new apartment to sell, they will be able to sell it.”
Companies also are boosting leasing agents’ confidence by using revenue management systems that automatically compute rental prices. The system gives leasing agents power because they know the price is right, says Ric Campo, CEO and chairman of the board of Houston-based Camden Property Trust. “They are able to sell the value of the property instead of, ‘Let me tell you what our discount is today.'”
–Rachel Z. Azoff
New Venture
CEL & Associates in Los Angeles has gotten together with the Bradford Group in Los Angeles to form CEL Compensation Advisors. The two firms will produce the CEL National Real Estate Compensation & Benefits Survey. The new venture, intended to be a resource for both public and private firms, will include surveys from the two firms, which are well-versed in gauging compensation.
–Les Shaver
Zoom In
Sperry Van Ness, a brokerage firm based in Irvine, Calif., released a new mapping and imagery system that uses Microsoft’s Virtual Earth mapping platform. The software provides the ability to view a property and surrounding area from different distances, directions, and points of reference.
–Les Shaver
Go, Crimson!
Harvard University graduate students won the Urban Land Institute’s annual Gerald D. Hines urban design competition. The task: Redevelop a 100-acre former industrial site to connect two portions of St. Louis University’s campus, adding at least 1,000 units of affordable, workforce, and market-rate housing. The winning project: the creation of a north-south “academic spine” along the campus’ Grand Boulevard bridge. An urban northern edge and biotech-oriented southern edge would unite the campus around a mixed-use node of academics, biotechnology, transit, recreation, commercial, and residential activities.
–Rachel Z. Azoff