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What is the community’s reputation, both within the campus community and in the overall marketplace? Does it have unique, competitive positioning? Is the staffing top-notch?
These are all factors that must be considered, said Alex Jackiw, CPM, Managing Director of Residential Client Services for McKinley, Inc., and Therese Cochran, CAPS, CPM, Director of Student Housing for McKinley Student Housing Services, during their session “Turning Around a Distressed Student Housing Asset” at the 2013 NAA Student Housing Conference & Exposition in Las Vegas.
Jackiw and Cochran said many student housing markets are experiencing saturation because REITs are attracted to big-name schools where growth has slowed. Additionally, first-time buyers who enter the student housing space often pay too much for their first investment. Executives get into student housing because of attractive yields, but struggle on the operations side, Jackiw and Cochran explained.
Furthermore, many single-family home owners are targeting these troubled assets and renting their homes to the serious-minded student who doesn’t want to live in a “party” environment.
Distressed assets often have location problems, reputation issues, product obsolescence and loan maturity issues. If a community is struggling, Jackiw and Cochran said its owners and managers must analyze the property’s condition, competition, history of pre-leasing, resident profile and demographics, pipeline projects and presence on social media.
Once these factors have been analyzed, Jackiw and Cochran said a detailed plan must be established to turn around the asset.
1. Identify the target market;
2. Establish target rent;
3. Identify renewal rent and goals;
4. Identify goals for new leases;
5. Establish budget to reach pre-lease goals;
6. Develop print and electronic marketing materials;
7. Establish outreach targets;
8. Develop detailed calendar of marketing events; and
9. Establish reporting guidelines
If these steps are followed, even the most distressed asset has the potential to bounce back.
By Lauren Boston, NAA Staff Writer
Learn about the perks and benefits of working in residential property management and some of the reasons the industry provides career growth, stability and endless opportunities.