Gaining a Foothold REITs report rising occupancy in 2004. Most analysts predicted 2004 would be a year for the multifamily industry to regain some traction in rents and occupancy.
They were right.
“Demand has picked up,” says Peter Linneman , principal o f Linneman Associates, a real estate advisory and consulting firm in Philadelphia. “When interest rates dropped precipitously, a lot of people that would have owned over the next couple of years all ran to the front of the line. Now it’s back to reasonable demand [to buy homes].”
As a result, many REITs have seen improving occupancies. AMLI Residential Properties Trust reported that occupancy went up 2 percent across its portfolio.
“The worst is behind us,” says Robert J. Chapman, the Chicago-based company’s CFO. “We’re gaining traction and hoping to raise rents and still hold occupancy.”
Bruce Duncan, president and CEO of Equity Residential in Chicago, saw rent growth in both the second and third quarters of 2004. He expects steady improvement into the future if the job outlook improves. “2005 will be a continuation of 2004,” he says. “We think it will continue to get better, but we don’t see a dramatic improvement.”
–L.S.
Executive Feedback
How can IT drive your operations in 2005?
A: “Initially IT focused on which operating systems or software programs were the fastest or most stable. Now we utilize IT to address specific business goals and objectives such as capturing and processing ancillary income, capturing leases online, or facilitating resident [interaction] with the management company.” —David A. Materna, president and CEO, The Paradigm Group Inc.
A: “Technology will drive our business in ’05 by placing real-time information in the hands of people who make decisions, helping us to manage ahead of the curve. Our esite system presents us the most current data by updating collections, delinquency, [and] occupancy every 10 minutes. … In addition, our company intranet links all properties at one central point. From here we have created a real-time expense control system that allows us track the progression of expenses throughout the month. These two items together will allow us to have better control over all our assets.” —A. David Lynd, COO, The Lynd Company