Maintaining Market Share With Rehab and Renovation

Last month in our newsletter we talked about how Denver is in the midst of a boom. U.S. News ranked Denver #2 in the 100 best places to live in the US. A report that analyzed employment trends in the nation's 100 largest cities, also ranked Denver second in the nation for job seekers. The local multifamily housing market hasn't hesitated to take advantage of Denver's reputation.

Over 80 new projects were completed in the last 5 years. 25,000 units are currently under construction and will be completed this year with 3,246 new apartments already delivered in the first quarter. In a typical market, that might push vacancies up and drive rents down, however Denver isn't a typical market and properties like Dakota Ridge, a Berkshire Community located in Littleton, CO. know this.   Despite increases in inventory, rents are up. In March, metro Denver rental rates were 3.2 percent higher than last year. This exceeds the national average of 2.4 percent. Unincorporated Arapahoe County, Littleton and South Lakewood were among several other areas that saw increases at 5% and more. Given the market, existing projects need to look at ways to compete and hold their market share. And that's exactly what Dakota Ridge, a Berkshire Community located in Littleton CO, has done.

Stonebridge Builders has been fortunate to work with Berkshire Communities on several multifamily renovation and rehab projects. Their current project, the ongoing renovation of 480 units at Dakota Ridge, is a true partnership, with top to bottom oversight from Stonebridge and consistent timely feedback from Dakota Ridge.   Property manager, Kelsey Carter explained that in order to justify rent increases, maintain their share of the market and compete with other complexes, they needed to update the look and feel of their units as well as improve function and efficiency.   Based on market research, Dakota Ridge was anticipating adding an average rent premium of $65 - $225 based on the number of bedrooms in the unit. With the project a third of the way complete, a premium has been added to the rent for renovated apartments, however it exceeds their projections by as much as 37% in some cases.  

Dakota Ridge deliberately chose specific upgrades based on industry and market trends as well as feedback from residents and prospects. Certain upgrades were selected more for aesthetic purpose. For example, outdated bar level counter tops were replaced with single level surfaces to align with more desirable current kitchen design features. Other upgrades were chosen for improved function, durability and reduced maintenance long term, in addition to appearance. Vinyl blinds were replaced with 2-inch wood blinds. According to Carter, resident misuse has a greater impact on vinyl blinds and from the outside looking in aged vinyl blinds give a dated, unpolished look and feel. Replacing them with wood reduces maintenance costs, extends the life of the product and provides a more cohesive appearance between the interior and exterior.   In first floor units, plank hardwood flooring was installed to replace carpet and vinyl. According to a survey done by Multifamily Executive's Concept Community, the current renter wants hardwood flooring over carpet and they are willing to pay extra for it. Aware of this trend, Dakota Ridge believed they could achieve an additional rent premium of $15-40 for first floor units with plank hardwood over second and third floor units where it is not yet an option.  Given market conditions, on average they were actually able to achieve premiums 40-75% higher than projected.  

Choosing the right builder is one of the most critical components when undergoing a major renovation project. Berkshire Communities chose Stonebridge Builders for the Dakota Ridge rehabilitation project based on a long standing relationship and proven track record of success on previous projects.   About Stonebridge, Carter says that the main thing that sets them apart from other builders is how they handle situations with unexpected outcomes. Even with a perfect plan, things can still go awry. She explains, "Stonebridge works to make things right rather than placing blame where things went wrong. They are solution focused versus situation focused. Stonebridge's attitude is, it doesn't matter how it happened or who's fault it is, it's about how are we going to make it right."  

Stonebridge's President and CEO, Chris Tolar, says, "Our client relationships are equally as important as the quality of our work. Communication is paramount to the success of any project and we make that our number one priority from our first contact with the client, throughout construction and long after the completion of the project. That's how we do business."  

As an industry expert and leader, Stonebridge is the natural choice for any multifamily community or apartment renovation and rehabilitation. Contact us for industry insights, planning and execution of your next project. 

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Listening: The Secret to Great Selling and Client Retention

Regardless of the industry, the same principles apply to ensure successful sales and a winning client experience.

We’ve all had a nightmare sales experience in one form or another. How about the one when the sales rep starts talking, and doesn’t stop? They give every detail about the product and service without taking a breath. It’s even worse when what they’re explaining in every last detail has no relevance to your wants or needs.  We know when we’re simply being “pitched” and it doesn’t feel good.

On the flip side, every one of us that has ever held a sales position has inadvertently done the very same thing that feels so bad to be on the receiving end of. And unfortunately, it’s the very thing that most likely prevented us from getting the sale. We know the product so well that we overload our prospect by explaining every detail, but we don’t take the time or make the effort to get connected to their needs. We talk too much, don’t ask enough questions and we don’t listen.

If we’re savvy enough, we might actually catch ourselves talking too much and then shift to ask a question or two. But so often, even if we do manage to catch ourselves, we just continue our pitch where we left off. 

We talk too much because we know our products and services inside and out and we don’t want to leave anything out that could end up being important to the prospect. We don’t have to share every detail. Instead, we should tune in to what’s important to our client and speak directly to that.

So, how do we know what to share and what to leave out? Ask questions that get your client talking. Shift into genuine inquiry and discovery mode to uncover what their true needs are and which pain points you can address and solve.

Start with the question that will align you with their most critical issues. For example,  “If I were able to meet your most pressing needs, what would they be?”

Once you have identified your prospects needs, you can tailor the conversation to speak directly to solving them. However, when you think you’re clear and ready to move on with your presentation, before you start talking again, pause and ask clarifying questions. It’s your responsibility to make sure that you have not only listened, but have also truly heard, understood and integrated what they said. Ask, “I understand your most pressing issues are X and X. Did I get that right?” 

If they answer yes, then you know which direction to go in and the specific information you need to share with them. If their answer is “no” or “not exactly,” then seize the opportunity to get clear by asking more questions.

A successful sale starts with listening, listening with a great desire to learn. It takes awareness, attention, intention and tremendous effort, but the pay off is well worth it in the end. If you truly listen to your clients, they will be clients for life!

Make your next Rehab, Remodel or Renovation a Huge Success!

Imagine this scenario; you’ve determined the scope of a large renovation project, chosen a contractor and are about to get started. Your number one goal is a smooth, stress-free process. But is that possible on large-scale apartment rehabilitation or new ground up construction projects? It’s not only possible, but guaranteed if the right steps are taken before you begin or break ground.

The essential key to making your renovation a huge success is the quality of communication with the contractor from start to finish. The way that information is shared with your contractor and with your residents is critical to a successful process and outcome.

According to Chris Tolar, President and CEO at Stonebridge Builders, there are a few critical communication requirements for a smooth rehab project, most importantly that the project is viewed by all stakeholders as a collaborative endeavor, not an US versus Them mentality. Additionally, before any construction begins, the client first needs to communicate the full scope of work to the contractor. There is a shared responsibility to confirm that the clients’ expectations are clearly understood by the contractor, and that agreements are set in place to create a system for accountability.

Tolar also emphasizes trust as a crucial component to a solid client/contractor relationship. The contractor should be hired and trusted to manage all pieces of the project – materials, construction, scheduling, permitting, etc.

For the most efficient exchange of information and decision-making regarding the project, the client should have one designated point of contact to deal with any and all rehab questions.

Diana Pittro, executive vice president of Chicago’s RMK Management Corp, leverages technology and communication tools early in the rehab process, and then employs them at every point along the way. She starts every project with an extensive spreadsheet she calls her “Bible.” This includes everything from scope of work, detailed lists of all necessary materials, projected install dates to marketing and resident communications plans, on-site storage and rotation scenarios, costs, and analysis tabs. This spreadsheet is created and updated long before residents get notice of the upcoming renovations. Residents are informed of what’s going to happen and when at 90, 60, and 30 days and then one week before any construction begins.

“If you do it right, your residents are the last to know, but they still find out well before you start any work,” Pittro says.

On inferior renovation projects and rehabs, communication is sub-standard and work often commences before very clear agreements are set in place regarding the specific course of action at every stage of the project.  When the client and contractor aren’t on the exact same page from the start, the project tends to extend beyond projected deadlines and budget, resources are poorly managed and residents are inconvenienced and frustrated, which ultimately affects lease renewal rates.

When considering improving your property with a rehab, renovation or remodel, partner with a contractor like Stonebridge Builders. Their commitment to the highest quality craftsmanship, exceptional service and consistent and thorough communication at every step of the way will ensure your project is a huge success

Super Dave

While most of our blog posts are related to more *serious* company news, we couldn't help but share a hero story.  

Well Stonebridge Builders has something even better. Super Dave Hanson, one of our extraordinary Project Foremen:

Dave has recently been the subject of very high accolades from our clients.  At the end of each project, we ask our clients to complete a project evaluation to help us to improve our services.  Here is what folks are saying about Dave Hanson:

"We appreciated Dave Hanson.  He was a real help to us, explaining and setting up everything and checking back to see that things were done correctly." -Carol & Bill

"Dave Hanson did a nice job of floating a problem spot in the slab, also a good job of relocating a central vac PVC line.  A pleasure to work with.  Very responsive." - Phillip & Deborah

In short, we are thankful for such an amazing resource on the Stonebridge team and hope that you will have an opportunity to work with Dave Hanson or any of our other fabulous team members!