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Strategies for Selling Your Community

Asset Management Strategies

Big data can help apartment owners understand when it is time to sell and when it is time to hold.

Before AMLI Residential sells a community, it will sometimes start a rehab. But the Chicago-based owner does not always want to finish the repositioning.

Why this strategy? Is the company afraid of a long-term commitment?

Not really, says Sarah Wieckowicz, Vice President of Revenue Management at AMLI. 

“We want to demonstrate value for the buyers by upgrading 20 percent of the apartments, Wieckowicz said during the Maximize session “Leaving Occupancy Behind: Identifying the Truly Important Measures” last week in Austin. “We can show a potential buyer what kinds of returns they can get.”

In the process, AMLI is also harnessing the power of big data. The numbers are telling the company if it should accelerate or decelerate the rehab and giving it more information to inform buyers.

Of course, sometimes that data also might suggest to an apartment owner that it is not time to put the community on the market.

Tim Reardon, Director of Revenue Management at Bridge Property Management, recalls that his firm has sold Seattle assets that he personally wanted to hold because they still had growth potential. One of the advantages of business intelligence is that he can now find numbers to back up his gut instincts.

“Some advanced metrics will tell you when it is time to hold onto a community,” he says.

Wieckowicz says, “Ideally, you want to maintain your rental rate and occupancy, but it is hard to do that in fall and winter.”

Reardon agrees, saying he wanted occupancy to stay in the 94 percent to 95 percent range before a disposition. 

“It proves you can keep the community full with the rental rates you achieved,” he says.

Ron Brock, Jr., Industry Principal, Matrix Products at Yardi and a former investment broker, said every owner tries to boost occupancy before sales. Most buyers should dig deeper to understand what is happening. “The key question is what is going on in the market,” he said.  “We should have figured out whether we are in a node that it is in a growth phase and what the driving factors are. Intellectual capital, job growth, transportation and a reasonable business climate should be the primary key drivers. 

Want more information on how to increase your NOI? Join us at next year’s Maximize at the Omni La Costa Resort & Spa outside San Diego from October 1-3.