A full survey report and individual market data will be available at www.naahq.org/11ies by early September.
REGIONS USED IN SURVEY
Region I CT, DC, DE, MA, MD, ME, NH, NJ, NY, PA, PR, RI, VA, VT, WV
Region II AL, FL, GA, KY, MS, NC, SC, TN
Region III IL, IN, MI, MN, OH, WI
Region IV AR, LA, OK, TX
Region V CO, IA, KS, MO, MT, ND, NE, NM, SD, UT, WY
Region VI AK, AZ, CA, HI, ID, NV, OR, WA
Executive Summary Table of Contents
Market Rent Properties Summary 52
Metro Area Market Rent Summary 57
Subsidized Properties Summary 58
Glossary of Terms 59
A full survey report and individual market data will be available at
www.naahq.org/11ies by early September.
The New Normal Requires A Scorecard
Over the past 12 months, the pendulum for the apartment industry has shifted from challenges to opportunities, from NOI declines to NOI increases, from value declines to value gains and from market uncertainty to greater market clarity. The economic environment, while not robust, appears to have reached bottom and the fear of a further decline has been reduced. While there are significant challenges ahead, many of which may not be resolved until 2013, renting has become popular again. The job market remains far below expectations and needs; however, a geographic quiltwork of new employment opportunities is beginning to emerge.
Multifamily properties have become one of the preferred asset classes for investors and lenders. Further increases in rents are very likely to occur, capital markets are improving and the number of apartment starts is expected to increase dramatically to meet current and pent up demand levels. However, the rollercoaster ride from prosperity to recession and recovery has brought new operating dynamics and unique operational business challenges for the apartment industry. In today’s New Normal, apartment owners and operators are increasingly relying on an operating scorecard to monitor and guide performance. The day-to-day reaction style of management has been replaced by disciplined operations and performance-based policy and procedure.
Over the next 12 to 36 months, the apartment industry is likely to experience dramatic growth, improved operating performance, enhanced value appreciation and increasing competition for a growing renter market. Rents will likely rise, concessions will decline and resident expectations for new and valued services and amenities will continue to grow. In the New Normal, leaders within the apartment industry will need to juggle multiple roles simultaneously, keeping track of expenses, making value creating operational improvements, building and strengthening resident satisfaction and shifting investor/owner expectations. In the New Normal, managing the bottomline is not an option, it is a necessity. Today, improved fundamentals will be derived from knowing and closely monitoring operating benchmarks.
These findings are just a few of the many conclusions drawn from the recently completed National Apartment Association’s 2011 Survey of Operating Income & Expenses. This NAA-sponsored survey of over 1.1 million apartments nationwide, conducted by Los Angeles-based, CEL & Associates Inc. concluded that the improving conditions for the rental housing market were also being reflected in improvements to operating fundamentals.
The 2011 survey results reveal that apartment operators are continuing to successfully balance a commitment to providing high-quality living environments with the need to be financially rigorous in managing and controlling often unexpected increases in operating costs. Within the apartment industry, the knowledge and dedication of experienced onsite personnel is paying big dividends for residents and owners alike.
NAA has completed its Survey of Operating Income & Expenses in Rental Apartment Properties for 2011, based on annual data for 2010.
Major findings in this survey of the professionally managed rental apartment industry reflect the still uncertain current economy. Overall net operating income in the “market rent” segment of the rental apartment market rose slightly by 0.8 percentage points from 53.3 percent to 54.1 percent and had a lower economic loss rate of 12.16 percent vs.13.78 percent in 2009 primarily due to a decline in vacancies and concessions. Total operating expenses increased by 1.7 percentage points. The economic state of subsidized properties in the survey also experienced variable results over 2009.
A total of 4,416 properties containing 1,112,332 units are represented in this year’s report. Data was reported for 3,992 market rent properties containing 1,052,006 units and 424 subsidized properties containing 60,326 units. (Forms with partial data or apparent problems that could not be resolved were not included.)
The report presents data from stratifications of garden and mid-rise/high-rise properties, and is further segmented by individually metered and master-metered utilities. Survey data is presented in three forms: dollars per unit, dollars per square foot of rentable area and as a percentage of gross potential rent (GPR).
Responses from garden properties with individually metered utilities represent 76 percent of the market rent properties and 51 percent of the subsidized properties. Therefore, the analysis is focused primarily on the garden properties with individually metered utilities.
The market rent segment generally has more units per property and greater floor area per unit than the subsidized segment. The average size (# of units) of individually metered market rent garden properties is 273 units (142 units in subsidized). However, in this year’s survey, rentable floor area averaged 912 square feet for market rent apartments and 923 square feet for the subsidized units in 2010.
The complete report (available online Oct. 1 at www.naahq.org/11ies) contains detailed data summarized for six geographic regions, and eighty metropolitan areas met the separate reporting criteria for market rent properties. Sufficient numbers of subsidized properties were submitted for ten metropolitan areas.
This report also includes results for all “other” properties at the state level located in metro areas that did not meet criteria for separate reporting. Non-metro area reporting also is included at the state level. Tables for market rent properties are provided for 17 states and for subsidized properties in 12 states.
Market Rent Properties
Economic Losses. A standard measure of the health of the rental housing market is economic losses, defined as the difference between Gross Potential Rent (GPR) and rent revenue collected, expressed as a percentage of GPR. Included in the losses are revenues lost to physical vacancies, net uncollected rents and the value of rent concessions.
The economic loss rate in the survey for market rent individually metered garden properties declined from 13.78 percent in 2009 to 12.16 percent in the data for 2010, compared to 12.42 percent in 2008. The highest economic losses overall were 13.99 percent, reported in the survey in 2004.
Net Operating Income (NOI) and Revenues. NOI is a key measurement for evaluating the health of a property and the rental housing market. It is defined by the difference between total revenue collected and total operating expenses. NOI represents the gross cash available for debt service, capital expenditures and profits. NOI (as a percent of GPR) in the NAA survey improved slightly in 2010, reflecting the New Normal of improving fundamentals.
NOI measured as a percent of GPR for 2010 was 54.1 percent, increasing 0.8 percentage points from 53.3 in 2009 (53.9 in 2008). The NAA survey’s historical peak was 58.9 percent in 1999. Regionally, NOIs in 2010 ranged from a high of 60.0 percent in the Northeast states (Region I) to a low of 48.6 percent in the Southwest states (Region IV), which has generally experienced the lowest NOI percentage among the regions.
Average NOIs for the last three survey data years of individually metered garden properties are presented in the table below.
Gross Potential Rent (GPR). GPR in the survey data tables is defined on a “look-back” fiscal year basis. It is the sum of total rents of all occupied units at 2010 lease rates and all vacant units at 2010 market rents.
Average annual GPR declined by 2.6 percent in 2010 for garden properties with individually metered utilities. Average GPR was $10,171 per unit ($848 monthly) in this year’s survey versus $10,439 per unit ($870 monthly) in 2009 and $10,367 per unit ($864 monthly) in 2008. On a per square foot basis, GPR was $11.16 ($0.93 per month) versus $11.61 ($0.97 per month) in 2009 and $11.41 ($0.95 per month) in 2008.
Median annual GPR for individually metered garden properties in the survey was $10,201 ($850 per month) versus $9,889 ($824 per month) in 2009 and $9,700 ($808 per month) in 2008.
Rent Revenue Collected. Annual rent revenue collected averaged $8,934 per individually metered garden property unit, down 0.7 percent from $9,000 in last year’s survey ($9,080 in 2008). Measured on a per square foot basis, and returning to a larger average unit size reported in 2010, rent revenue averaged $9.80 versus $10.01 in 2009 and $9.99 in 2008.
Revenue Losses. Revenue losses averaged 12.16 percent of GPR in 2010 versus 13.78 percent of GPR in 2009 and 12.42 percent in 2008. Revenue losses in 2010 declined in the three categories: vacancies, collections and concessions.
Vacancy losses for individually metered market rent garden properties averaged 6.9 percent of GPR in the current survey ($701 per unit, $0.77 per square foot) versus 8.0 percent of GPR in 2009 ($836 per unit, $0.93 per square foot) and 7.6 percent of GPR in 2008 ($785 per unit, $0.86 per square foot). Collection losses averaged 0.7 percent of GPR ($73 per unit, $0.08 per square foot) in comparison to 0.8 percent of GPR ($80 per unit, $0.09 per square foot) in 2009 and 0.9 percent of GPR ($94 per unit, $0.10 per square foot) in 2008. Losses from rent concessions decreased, averaging 4.5 percent of GPR ($462 per unit, $0.51 per square foot) in 2010 versus 5.0 percent of GPR ($523 per unit, $0.58 per square foot) in 2009 and 3.9 percent of GPR ($407 per unit, $0.45 per square foot) in 2008.
Other Revenue Collected. The trend continues with multifamily housing owners and service providers creating and offering additional revenue sources, reflected in an increase of 0.9 percentage points or 8.1 percent as a percent of GPR this year.
Other revenue collected from operating sources includes receipts from onsite laundries, cable, TV/Internet service, telephone systems, parking fees and other charges for services and amenities. These other operating revenues averaged $824 per unit ($0.90 per square foot) in 2010 versus $753 per unit ($0.84 per square foot) in 2009 and $691 per unit ($0.76 per square foot) in 2008 for individually metered garden properties reported in the survey.
Total Operating Expenses. Total operating expenses, as a percent of GPR, increased by 1.7 percentage points in 2010. The total operating expenses represented 41.9 percent of GPR in 2010 versus 40.2 percent of GPR in 2009 and 40.4 percent of GPR in 2008. Total operating expenses for individually metered garden properties in the survey averaged $4,257 per unit ($4.67 per square foot) versus $4,194 per unit ($4.66 per square foot) in 2009 and $4,185 per unit ($4.61 per square foot) in 2008.
Operating expenses in the survey are collected for nine major categories: salary and personnel costs; insurance; taxes (real estate and other directly related property only); utilities (net of any reimbursements from residents); management fees; general and administrative; marketing; contract services; and maintenance. (Non-recurring capital expenses were excluded and are reported separately.)
There continues to be variation in the trends among individual categories of operating costs, some of which may be derived from differences in accounting policy regarding expense classification that the survey cannot further delineate. Average property-related insurance costs remained approximately the same at $218 per unit ($0.24 per square foot) in 2010 versus $215 per unit ($0.24 per square foot) in 2009 and $234 per unit ($0.26 per square foot) in 2008.
Administrative costs (G&A) declined slightly at $212 per unit in 2010 versus $219 per unit in 2009 and $238 per unit in 2008. Management fees increased at $311 per unit (3.1 percent of GPR) in 2010 versus $290 per unit (2.8 percent of GPR) in 2009 and $289 per unit (2.8 percent of GPR) in 2008. Marketing costs declined at $156 per unit or 1.5 percent of GPR versus $174 per unit or 1.7 percent of GPR in 2009, and $175 per unit or 1.7 percent of GPR in 2008. Maintenance costs increased to $467 per unit in 2010 versus $436 per unit in 2009 and $428 per unit in 2008. Contract services costs again remained approximately the same at an average of $283 per unit in 2010 ($285 in 2009 and $284 in 2008). Salaries increased to $1,118 per unit in 2010 versus $1,101 per unit in 2009 and $1,078 per unit in 2008.
Turnover rates. The overall turnover rate decreased 3.0 percentage points to 54 percent in 2010 (which is a new low after previously reaching 55 percent in 2008). The pent-up demand for apartments continues to grow. Doubling up, living with family and/or friends, or delaying moving out have increased the potential renter population. The poor job market has also contributed to a delay in the age of first time marriages and the age of women having their first child. Unemployment of college graduates and those without college degrees remain high by historical standards. However, once one has a job and achieves a real or perceived stable financial condition, “staying put” becomes a priority. The reduced turnover rates reflect the New Normal, where a combination of an economic bottoming out and improving financial security mandates less volatility in the need to relocate.
Owning a home is becoming an anchor to those who desire greater flexibility to “go where the jobs are.”
After most regional turnover rates increased last year, turnover for all regions declined in 2010: Northeast (Region I), 48 percent to 47 percent; Southeast (Region II), 59 percent to 55 percent; North Midwest (Region III), 51 percent to 49 percent; Southwest (Region IV), 59 percent to 57 percent; Mountain/South Midwest States (Region V), 59 percent to 57 percent; and in the Pacific (Region VI), 60 percent to 52 percent.
Age of Property. Operating expenses as a percentage of GPR and dollars on a per-square-foot basis ranged from 36.7 percent of GPR in properties less than 5 years old and rose to 43.7 percent of GPR for properties 20 or more years old. As operating expenses generally decrease over the span of years, capital expenditures tend to increase as the building ages. For example, operating
expenses were $4,496 per unit for those 5 to 9 years old and
decreased to $4,150 per unit for properties 20 or more years old. Capital expenditures ranged from $168 to $670, increasing by age of property; however in general declined again in 2010 due to continued reductions in spending overall.
The highest average NOI as a percentage of GPR occurred in properties 10 to 19 years old at 57.0 percent. Measured in terms of dollars per unit, the low was $4,987 per unit in properties that are 20 or more years old and the high was $6,538 for properties 5 to 9 years old.
Economic losses continue to be the highest among the newest properties, particularly under current conditions. Properties less than 5 years old reported the highest ratio of economic losses at 21.18 percent of GPR, while the lowest was in those that are 10 to 19 years old at 10.84 percent.
Age of property groupings again show distinct differences in the individual cost components of operating costs. The largest difference is in real estate and related property taxes and fees, varying from a high (average) of $1,322 per unit ($1.32 per square foot) in those properties less than 5 years old, to a low of $832 ($0.97 per square foot) for those aged 20 or more years.
As expected, capital expenditures were significantly lower for the newest properties. They averaged $168 per unit ($0.17 per square foot) for properties less than 5 years old, compared to the highest average reported for properties 20 or more years old at $670 per unit ($0.78 per square foot).
Size of Property. Economies of scale in apartment property size are evident if operating costs decline as the size of properties increases. Economies of scale did appear when total operating costs were measured on a percentage of gross potential rent basis, ranging from 45.4 percent of GPR in properties of less than 100 units, to 40.8 percent in those containing 250 to 499 units. This year, the survey results showed similar economies of scale on a per unit basis. Operating costs, across property sizes, ranged from $4,614 (less than 100 units) to $4,182 per unit (500 or more units).
Economic losses varied based on property size. The range of losses was more compact this year; the highest was with properties with 250 to 499 units at 12.51 percent of GPR and the lowest for properties with fewer than 100 units at 11.26 percent.
Metro Area Operating Income & Expenses
Detailed tables in the full report are presented for 80 metropolitan areas reported in the survey. This is the only section of the report with metropolitan area data for garden, mid-rise and high-rise building properties, and is further segmented into those with utilities that are individually or master metered. Care should be taken when reviewing the data for individual property types in metropolitan areas where the number of properties reported is small. Following are highlights of the metropolitan area data, focusing on garden properties with individually metered utilities unless otherwise noted.
• NOIs on a dollar per unit basis ranged from $11,407 ($14.95 per square foot) in the San Francisco-Oakland-Fremont, CA metro area to a low of $3,116 ($3.84 per square foot) in the Evansville, IN-KY metro area. The Chattanooga, TN metro area had the highest NOI measured as a percent of GPR at 67.4 percent and Des Moines-West Des Moines, IA had the lowest at 39.4 percent.
• GPR averages were the highest in the San Francisco-Oakland-Fremont, CA metro area at $17,824 per unit ($23.37 per square foot). A low of $6,328 per unit ($7.80 per square foot) was tabulated for properties reported from Evansville, IN-KY.
• Economic losses were lowest in the Eugene-Springfield, OR and Chattanooga, TN metro areas at 4.05 percent and 4.42 percent of GPR, respectively. Metro areas with the highest economic losses were New Orleans-Metairie-Kenner, LA at 19.95 percent and Lubbock, TX at 19.79 percent.
• Total operating costs’ highs and lows vary among metro areas based on which measure is selected. Properties reporting from the Miami-Miami Beach-Kendall, FL metro area had the highest operating costs based on a per unit basis at $6,193 ($5.91 per square foot), followed by the Los Angeles-Long Beach-Glendale, CA metro area at $5,909 per unit ($7.10 per square foot) and San Francisco-Oakland-Fremont, CA metro area at $5,841 per unit ($7.66 per square foot). A low of $2,923 per unit ($4.63 per square foot) was reported in the Eugene-Springfield, OR metro area, with $3,115 per unit ($3.84 per square foot) in the Evansville, IN-KY metro area and $3,125 per unit ($3.68 per square foot) in the Albuquerque, NM metro area metro area.
• Real estate taxes remained high in many metro areas in 2010. The Ft. Lauderdale-Pompano Beach-Deerfield Beach, FL metro area had the highest real estate taxes per unit at $1,985; and the West Palm Beach-Boca Raton-Boynton Beach, FL metro area was second at $1,766 per unit. The lowest average was for properties located in Colorado Springs, CO, and Tulsa, OK metro areas at $346 and $371, respectively.
• Insurance costs on a per unit basis were the highest among the following areas including several hurricane-prone metro areas. They were $759 per unit ($0.78 per square foot) in New Orleans-Metairie-Kenner, LA, and $582 ($0.55 per square foot) in the Miami-Miami Beach-Kendall, FL metro area. They were lowest in the Eugene-Springfield, OR and Evansville, IN-KY metro areas at $70 and $113 per unit ($0.11 and $0.14 per square foot), respectively.
• Salaries and personnel costs were reported lowest in the Sacramento-Arden-Arcade-Roseville, CA metro area at $687 per unit ($0.94 per square foot) and the Des Moines-West Des Moines, IA metro area at $785 ($0.95 per square foot). The San Francisco-Oakland-Fremont, CA metro area had the highest average at $1,487 per unit ($1.95 per square foot) followed by $1,437 in the Los Angeles-Long Beach-Glendale, CA metro area ($1.73 per square foot).
• Cincinnati-Middletown, OH-KY-IN and Fort Lauderdale-Pompano Beach-Deerfield Beach, FL had the largest units among the metro areas reported separately in this report with an average of 1,153 and 1,094 square feet of floor area per unit, respectively. Properties reporting located in the Eugene-Springfield, OR and Sacramento-Arden-Arcade-Roseville, CA metros had the lowest averaging at 631 and 729 square feet per unit, respectively.
Subsidized Properties Income & Expenses
Operating Income & Expenses Summary. Data was received for 424 subsidized properties containing 60,326 units. Garden properties with individually metered utilities represent the largest subgroup of properties reporting, and analysis herein will be limited to this sector. Data tables are presented for 10 metropolitan areas in the full report that met the criteria for reporting. Subsidized garden apartment properties with individually metered utilities in the survey generally tend to have fewer units and less floor area than market rent units. Responding properties contained an average of 142 units versus 273 units for market rent properties of the same type. These subsidized properties had an average of 923 square feet of floor area versus 912 square feet reported for the market rent properties in the 2010 survey.
Revenues. GPR averaged $9,512 per unit ($10.31 per square foot) annually in this year’s survey versus $9,103 per unit ($10.20 per square foot) in 2009, and $9,432 per unit ($10.78 per square foot) in 2008. Rental revenues averaged $8,738 ($9.47 per square foot) versus $8,275 ($9.27 per square foot) in 2009, and $8,606 ($9.83 per square foot) in 2008. Other operating revenues averaged $338 per unit ($0.37 per square foot) in 2010 versus $593 per unit ($0.66 per square foot) in 2009, and $314 per unit ($0.36 per square foot) in 2008.
Operating Expenses. Operating expenses in subsidized properties were higher than those for market rent properties. Subsidized properties reported in the survey had total operating costs averaging $4,856 per unit ($5.26 per square foot) in 2010 versus $4,319 per unit ($4.84 per square foot) in 2009, and $4,441 per unit ($5.07 per square foot) in 2008.
Net Operating Income. Subsidized properties reported in the survey had lower levels of NOI than the market rent properties in all three measures. NOI for subsidized properties in the survey averaged 44.4 percent of GPR versus 54.1 percent for the market rent properties. Other comparisons of subsidized NOI to market rent were $4,220 versus $5,501 on a dollars-per-unit basis, and $4.57 versus $6.03 on a per-square-foot basis, respectively.
Economic Losses. Economic losses tend to be lower in subsidized properties with their lower rents and relatively tight supply. An 8.14 percent average rate was calculated for the subsidized individually metered garden properties versus 12.16 percent for market rent units. The economic loss ratio in subsidized properties decreased from last year’s 9.10 percent and 8.76 percent in 2008.
Turnover Rates. Occupants of subsidized apartments have lower incomes and fewer housing choices in most local markets and are less likely to move. The turnover rate in individually metered subsidized units was 35 percent versus 54 percent for market rent units.
Metrics (Garden, Ind. Metered Properties)
To provide a better understanding of apartment operations, CEL has provided additional analysis in the form of ratios (metrics), which provide benchmarks of the relationship between key operating variables from survey participants. In the table on page 56, several operating metrics are presented, stratified by number of units per community. These include measures of the relationship between payroll (staffing) and revenue (top line) and income (NOI), shown as Revenue (or Income) dollars per dollar of payroll, or Payroll as a percent of Revenue or NOI, and the number of units supported by each full-time (and total) employee. These metrics should be used as a point of reference and guidelines for readers of this survey report, and not necessarily as a target or requirement to assure efficiency or operational policy.
Summary
There is no doubt among owners and operators of apartment properties that calendar years 2011 and 2012 will be far better than the prior 36 months. The lessons learned during the recent period of economic and financial challenge have reaffirmed the basic tenet of applying prudent organizational, operational and business fundamentals. In the New Normal scorecards, dashboards, performance metrics and benchmarks will dominate renewed diligence on balancing cost controls with improved resident services.
There is a growing opportunity for more knowledge-centric and resident-centric business models. However, in a time of recovery, leaders of apartment companies and communities need to demonstrate that improved performance begins and ends with leadership, assemblage of an aligned and motivated team of
talent, a continuous learning environment, fiscal discipline and a commitment to continued quality and service excellence.
In the New Normal, the bottom-line results will primarily be internally driven. Protecting, adding and creating value mandates a consistent adherence to standards and performance metrics.
Because the economic recovery will likely be protracted, not geographically uniform and subject to unexpected events, apartment owners and operators must secure the performance of existing assets by re-engineering their operating systems, policies and processes for today’s results while preparing for tomorrow’s
opportunities.
While the future is very bright for the apartment industry, remembering the operating basics and what constitutes outstanding service and performance is essential. Identifying, determining and applying those benchmarks and performance metrics that are important to one’s apartment enterprise will be very important. Welcome to the New Normal…where nothing will be truly normal.
The NAA survey results in 2011 demonstrate the skills, tenacity and ability to make difficult decisions within the apartment industry. Those entrepreneurial, visionary and transforming leadership skills highlight why this industry is a cornerstone to and for America’s prosperity.
The apartment industry is stronger, more vibrant and prepared for tomorrow’s challenges. As always, at the heart of financial results is the interface of property operations and resident needs/satisfaction, the ability to create and sustain a welcoming and continuously effective environment for approximately 35 million apartment residents—a challenge enhanced by the difficulties of this economic downturn and the leadership and talents of those within the apartment industry.
Glossary of Terms
Administrative. Total monies spent on general and administrative items such as answering service, donations, mileage reimbursement, bank charges, legal/eviction charges, postage, telephone/fax/Internet charges, office supplies, resident functions, uniforms, credit reports, permits, membership dues, subscriptions, data processing, etc.
Capital Expenditures. Total monies spent on non-recurring capital expenditures such as asphalt/parking, concrete/masonry, water heaters, range/cook top/ovens, dishwashers, glass, blinds/draperies, sidewalks/curbing, vinyl, pool, new carpet, washers/dryers, club amenities, fitness equipment, etc. A zero on the line meant there were no capital expenditures.
Contract Services. Total monies spent on all contract services such as landscaping, security, snow removal, trash removal, exterminator and other services provided on a contract basis.
GPR Residential. Total rents of all occupied units at 2010 lease rates and all vacant units at 2010 market rents (or fiscal year end).
Heating/Cooling Fuel. Type of fuel used in apartment units.
Insurance. Includes property hazard and liability and real property insurance and does not include payroll insurance.
Maintenance. Total monies spent on general maintenance, maintenance supplies and uniforms, minor painting/carpeting repairs, plumbing supplies and repairs, security gate repairs, keys/locks, minor roof/window repairs, HVAC repairs, cleaning supplies, etc. Non-recurring capital expense not included.
Management Fees. Total fees paid to the management agent/company by the owner.
Marketing. Total monies spent on media advertising, including locator fees, apartment guides, signage, newsletter, Internet, marketing gifts/incentives (not rent concessions), model expense, promotions, etc.
Net Commercial Square Footage. Total rentable square feet of commercial floor space.
Net Rentable Residential Square Feet. Total rentable square feet of floor space in residential units only. Area reported includes only finished space inside four perimeter walls of each unit. Common areas are excluded.
Other Revenue. Total collections from laundry, vending, cable, deposit forfeitures, furniture, parking, amenity charges, etc. Does not include interest income. Does not include utility reimbursements (i.e., RUBS) in GPR or rental revenue. All utility reimbursements are subtracted from gross utility expense.
Payroll Costs. Gross salaries and wages paid to employees assigned to the property. Including payroll taxes, group health/life/disability insurance, 401(k), bonuses, leasing commissions, value of employee apartment allowance, workers’ compensation, retirement contributions, overtime and other cash benefits.
Rent-Controlled Property. A property is subject to rent controls through local or state government regulations. This does not apply if rents are controlled through a government program that provides direct subsidies.
Rental Revenue Commercial. Total rent collections for commercial space after vacancy, administrative, bad debt and discount or concession losses.
Rental Revenue Residential. Total rent collections for residential units after vacancy, administrative, bad debt and discount or concession losses.
Revenue Losses to Collections. Amount of residential rents not received due to collection losses.
Revenue Losses to Concessions. Amounts of gross potential residential rents not received due to concessions.
Revenue Losses to Vacancies. Amount of rental income for residential units not collected because of vacancies and other use of units, such as models and offices.
Subsidized Property. A property has controlled rents through a government-subsidized program. If subsidized, the program was listed (e.g., Section 236).
Taxes. Total real estate and personal property taxes only. Does not include payroll or rendering fees related to property taxes or income taxes.
Tax-Exempt Bond or Housing-Credit Property. A property that has received tax-exempt bond financing and/or is a low income tax credit property.
Total Operating Expenses. Sum of all operating costs. The sum of all expense categories must balance with this line, using total net utility expenses only.
Turnover. Number of apartments in which residents moved out of the property during the 12-month reporting period.
Utilities. Total cost of all utilities and each listed type, net of any income reimbursements for or from residents (i.e., RUBS or similar systems). Does not include trash removal.
Utility Configuration. Whether electric, gas, oil and water/sewer utilities to individual units in subject property are: Master Metered, Owner Pays; Master Metered, Resident Pays (RUBS); Individual or Submetered, Resident Pays.
Christopher Lee, President & Chief Executive Officer of CEL & Associates Inc., is a Special Advisor to NAA. Special thanks to Janet Gora, Director, CEL & Associates Inc., as project manager; and Valerie Hairston of NAA for handling survey logistics and paper responses.
Order Your Complete 2011 Income & Expense Survey
The complete 2011 NAA Survey of Income & Expenses in Rental Apartment Communities will be available in early September.
It includes specific market data for 80 markets nationwide. Cost for members is $599. The non-member price is $1,000.
Contact NAA’s Valerie Hairston at 703/797-0624 for information.
Thank You To Our Participating Companies
NAA sends a special note of appreciation to the 262 firms who donated their time to accumulate the data necessary to make this survey valuable. The following companies and their officers provided 20 properties or more for the 2011 Survey of Operating Income & Expenses in Rental Apartment Properties.
Advanced Management Company
AEW Capital Management L.P.
AIMCO
Alco Management Inc.
AMLI Management Company
Bell Partners Inc.
BH Management
Blue Ridge Property Management
Buckingham Management LLC
Camden Property Trust
Capreit
Colonial Properties Trust
Concord Management Ltd.
Corcoran Management Company
CWS Apartment Homes LLC
Dial Equities Inc.
Drucker & Falk
Dunlap & Magee Property Management
First Choice Management Group
Fogelman Management Group
Forest City Residential Management Inc.
Gables Residential
Ginkgo Residential LLC
Greystar Real Estate Partners LLC
Harbor Group International
JCM Partners
Lane Management LLC
Legacy Partners Residential Inc.
LumaCorp Inc.
Marquette Management
MC Residential Of Texas LLC
MG Properties
Mid-America Apartment Communities
Milestone Management
Nevins Adams Lewbel Schell
Pennrose Management Company
Pinnacle Family of Companies
Post Apartment Homes L.P.
PRG Real Estate Management Inc.
Riverstone Residential Group
Ross Management Services
Shelter Properties LLC
Simpson Housing LLLP
The Dolben Company
Timberland Partners
TriVest Residential LLC
UDR
Venterra Realty
Village Green Companies
WestCorp Management Group
Western National Property Management
William C. Smith & Company