Student Housing Business

MAR-APR 2018

Student Housing Business is the voice of the student housing industry.

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Page 28 of 128

QUESTION OF THE MONTH March/April 2018 28 What is the best strategy for delivering a property — or operating an existing property — in a market that has become overbuilt? Get out of the gates early. Hit the renewals hard. Gut check its market positioning. Ensure property appearance is in tip-top shape. Cut the internet cord at the comps. Just kidding! J.J. Smith, CA Student Living At Core, we believe that delivering new product in a saturated market can be a positive thing if handled correctly. When a market is full of eager customers, we focus on two things: finding a niche and demonstrating to those potential tenants that our product represents a greater value. It becomes vitally important that man- agement is keenly aware of the market's specials and concessions, that the property is kept in A-plus condi- tion and that the right staff is in place. Ben Modleski, Core Spaces GMH has been fortunate not to deliver a new prop- erty in an overbuilt market since our return to the student housing sector. In terms of operating an asset in an over-supplied market, we have combated new supply through strategic capital plans that focus on amenity and unit interior enhancements; effective rate management; and creative marketing and leasing cam- paigns. Once these plans are implemented, we let our operations teams work their magic. Ultimately, those properties with the best management and service will outperform the competition. Gary Holloway Jr., GMH Capital Partners It's not hard to predict when a market is on the verge of becoming overbuilt with basic supply and demand trends so preparation is key. To stay the course in oper- ating or delivering in an overbuilt market, operations must be laser focused. Have your 'A' team in place, make sure all tools and analytics are set up to make nimble decisions, look for unique opportunities by knowing your student, university critical dates and marketing that can cut through the noise to connect with your prospective student. Be strong out of the gate with renewals, provide beyond expectation service, and have your highest level of talent on-site to be steadfast and strategic. Michelle Fuller- Wilson, Greystar An overbuilt market is more common than ever, which has forced us and our operating partners to focus on fundamentals. Is our property as clean as it can be? Are our maintenance teams quick, thorough and friendly? Do our sales and leasing teams create warm relation- ships? We look to customer service surveys and online reviews to help us understand if we're performing to a high standard. If you're covered on fundamentals and have created that value for the customer, then there is an opportunity to build a strong brand identity which will differentiate the product in the market. If you've missed on that, no marketing strategy can make up for poor customer experience. Alex Candia, Kayne Anderson Real Estate Avisors We believe success lies in differentiation. When the product or the location itself can't do that on their own, we know we can control other variables, most impor- tantly ensuring a high standard of service. To that end, it starts with hiring the best people in each market, and the strategy only works when we create an environment where people are empowered to facilitate a world-class resident experience that's second to none. We may not always be able to control the physical product, or its location, but we can absolutely manage the experience, and ensure that it's a community where people want to belong. Bob Clark, Peak Campus For new build — delay construction. (Please!) Unfortunately, that seldom happens. For existing properties, one shoe doesn't fit all. Consider what caused the occupancy imbalance. Too much new inventory? Declining enrollment? Or, are just one or a few properties underperforming? Are circum- stances changing? Different answers dictate alternative strategies. Common objectives are to capture renewals and focus on full occupancy, but (try to) hold contract rent. Concessions can be reduced over time, but lost contract rent could be gone forever. Start by investing in properties that are better insulated from these condi- tions — those with a protected price point at strong universities. Fred Pierce, Pierce Education Properties It all starts with having the right people on staff that see your brand as a differentiator, believe in it, and have the ability to sell it. When management compa- nies all compare themselves to each other, our industry becomes a commodity rather a differentiated experi- ence. Once the strengths and weaknesses of the subject property are identified, then the positives can be high- lighted, and negatives overcome. At the end of the day, it is still a numbers game. The most active property with the largest prospect pipeline and superior cus- tomer service will be the property that overcomes an overbuilt market without sacrificing rental rates. Andy Feinour, Student Quarters Even the most diligent developer or acquirer of quality student housing assets will eventually find itself in a hypercompetitive market. Our strategy for success in a tough market is the same formula that we use in all of our markets — an extreme focus on excellent customer service. Excellent customer service requires a highly trained and motivated team working in concert to deliver a superb customer experience 24/7/365, with no days off. The payoff is positive word of mouth and renewals, which are priceless, especially in a tough market. Loren King, Trinitas

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