Blog Posts

Disasters will Happen. Are you Prepared?-image

There are two kinds of disasters: the kind that are inevitable and the kind that  might  happen. With natural hazards, like lightening, high winds, and flooding, the question is not “if,” but “when” they will happen. But fires, earthquakes, civil unrest and many other catastrophes may or may not happen… to  you . Unfortunately, when it comes to disasters, there is no “never” category, so it’s always a good idea to prepare for the worst. Proactive property managers create emergency response and emergency restoration plans. But creating the plan is only half of the job. “If you have a plan, and it’s not updated and practiced regularly, that could be just as bad as having no plan at all,” explains WPM President of Commercial Management and Construction Services, Mike Klein. “Managers may develop a false sense of security, thinking that they have a book of instructions ready to go in the event of an emergency. But what if the emergency personnel phone numbers have changed? …or a recommended vendor is no longer in service? …or the person with the key to the water shut-off room isn’t accessible? Do you have a ‘Plan B’?” Clearly it is the job of the manager to ensure that the emergency preparedness plan is thoroughly updated and meticulously well-rehearsed. WPM property managers have years of experience tackling the tasks of preventing and recovering from disasters. As a result, they have amassed extensive experience with emergencies across many building types and geographic locations. Below is a list of some of their most important ‘do’s and don’ts’ for disaster response planning and remediation. Prepare for the worst.  Managers often prepare for routine smaller emergencies, such as flooding or electrical outages, but they balk at devoting time to preparing for something catastrophic. Regardless of how unlikely a major event may seem, it is imperative to prepare for the worst. Your team is your most valuable resource for citing potential problems and developing appropriate solutions. Walk your team through your buildings, inviting their recommendations and adjusting the plan based on their feedback. Plan for the Unique Challenges of Your Location . Consider the unique challenges your property could encounter, particularly regarding its water and power supply. Do you have a generator powerful enough to run your essential equipment for an extended amount of time? Have you considered risks to your water supply and developed a solution for each contingency? Verify the Supplies.  Ensuring that the supplies necessary for an emergency response are in place and in adequate condition is a task that requires ongoing attention. Materials can “walk away”, either through theft or as they become cherry-picked for other projects at the property. That is why managers ought to conduct periodic assessments of emergency response supplies. Verify the Personnel.  Managers often poll their employees to see who can stay in the event of an emergency. But be wary of putting your faith in the results of this poll; it is one thing for someone to say they will stay or show up when the sky is blue, but quite another for them to stay when a storm is raging or when they receive a phone call in the middle of the night. Things happen. People have families and homes to look after in emergencies. Managers will need to plan for training those who will be staying, and provide adequate food, supplies, first aid and equipment for the duration of the emergency. In addition, managers also ought to authorize the appropriate remaining employees to make purchase decisions or create plans of action to speed up the remediation process. Verify the Vendors.  In addition to knowing who among the internal staff can be counted on during a disaster, managers should know which external service providers are contractually bound to show up to the facility and render service in a timely fashion and at a fair price. Klein explains the importance of establishing vendors  before  an emergency: “When a major weather event such as a hurricane or ice storm hits, all of the vendors are really busy. So going to the phonebook in the midst of the crisis will not be effective. WPM has developed relationships with a broad array of service vendors who can be counted on to show up for our properties first, in the event of a disaster.” Is your team prepared for a disaster? Remember, it is not a question of “if”, but “when!”  Contact WPM at  [email protected]  with your questions or comments. We’re happy to share our years of experience.

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Lease-Up Lessons-image

Community openings can be a time of excitement and great reward, the culmination of years of planning and construction.  As new units are claimed and the property reaches stabilized occupancy, developers, investors and management alike share a sense of well-earned accomplishment. But, getting there isn’t always easy.  As you prepare for lease-up of your new communities, consider these common hurdles: Market assumptions are assumptions!  The market will talk to us from day one if we will listen. Demographic and market studies, data on employers, and other sources, are used to define the target market. In turn, construction-phase and pre-leasing marketing and outreach plans are built on this data. Real-time assessment of inquiries and conversions is how we test these theories. For example, one property, intended to attract young, single, urban professionals, garnered significant interest among young families early in the leasing period. By reassessing market assumptions and adjusting communications during the leasing process, the community was able to more clearly articulate how it addressed the needs of families ultimately taking advantage of a broader market for faster lease-up. It’s about the Residents, not the amenities!  Too often, properties focus their messaging on the amenities they offer, rather than focusing on the Resident experience. Prospective Residents want to know what it will feel like living in their new community, not what they can do. Can they visualize themselves enjoying the experience that the property promises? Our job is to ensure that the depiction of the experience is authentic – so Residents remain happy with the choice of their new apartment home. The “I can’t sign until I see it” objection.  We want to begin executing leases as early in the development process as practical. We want to catch those Prospects who are renewing their lease or planning their move. How do you sell air! Negotiate a phased demonstration plan with all stakeholders that includes hard deliverable dates. Start with detailed renderings, finish boards, and sample materials to touch and feel in the earliest stages, then move to hard-hat tours that show unit layouts in the actual building, and finally offer a professionally-furnished model, where prospective Residents can “see” themselves living. If it’s at all feasible, a sample unit accessible from the ground floor exterior or close to an entrance that is furnished as a mini-model is exponentially more effective than sample boards or hard hat tours! Units are being delivered when?  Despite the best planning possible, there will unexpected occurrences that change the construction delivery schedule – delays leading to later than expected delivery or coming online earlier than planned. Have a contingency strategy for both. Changes will happen; how flexible and prepared you are to handle them will be critical to a successful lease-up. The challenges of lease-up communities, whether ground-up new construction or repurposed, is what makes these assignments stimulating and fun.  Our best advice is to have a trusted team onsite, and an executive management team capable of quickly and effectively dealing with issues as they arise, bringing thoughtful and creative solutions. -Brent Gratton, CPM® Candidate Multifamily Real Estate Director of Multimedia Marketing & Communication

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Isn’t the Association a Business, too?-image

Is your Community Association a business? In many respects, the answer is yes. Most Homeowner Associations (HOAs) and Condominiums are founded as a corporation formed by the property developer as a State requirement of marketing and selling the homes in the subdivision. Once a pre-determined number of HOA lots or Condo units have been sold and a community of Owners has been established, the legal responsibilities of managing the Association are transferred to the Homeowners. Regardless of who is in control, the legal entity of the Association operates as a not for profit, non-revenue generating business although often with sizeable budgets. Its governance is overseen by a Board of Directors, whose members are elected by the Owners and each Board member holds a fiduciary responsibility to look out for the welfare of the entire community. Further, its goal is to operate according to sound business principles that make the best use of the revenues contributed as fees by homeowners. In many cases, an outside professional firm, such as WPM Real Estate Management, assists the Association with its responsibilities. At the same time, Community Associations differ from a for-profit business in several important ways. First, their boards are often all-volunteer and comprised of owners who are peers with the other property owners they govern. While not required to, many Board members live within the community, side-by-side with the neighbors about whose affairs they make decisions. And so, Board members need to be especially diligent to make decisions based on sound business principles, not clouded by personal relationships. Further, a Board’s goal is not to create revenue, but to maximize the value of its existing assets: to preserve, protect, and enhance the properties it oversees. So what is the best way to govern this hybrid organization? Despite the obvious ways that the association differs from a business, it still behooves board members and owners to operate the HOA/Condo according to sound business principles. And according to WPM’s President of Association Management, Barry Yatovitz, that starts with the budget which is approved by the board at the beginning of each fiscal year. Careful attention to monthly and yearly financial statements and their variances from the budget is imperative. Understanding the funds under management is the first step for strategizing current and future planning. And it is precisely that planning (e.g., anticipating the need for upgrades to amenities, replacement of structures, payments to vendors and for professional services) that maintains and adds value to the Association-managed properties.

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The Repair vs. Replace Decision-image

On the surface, deciding whether to repair or replace equipment or an appliance may seem straightforward, but with closer examination, it becomes apparent this is yet another arena where a property manager exercises art along with science.  And these decisions have significant impact on customer retention and cash flow. Ultimately the choice will vary by property and ownership circumstances, but below are some criteria WPM Property Managers use to evaluate these decisions: 50% of Replacement.  If a repair exceeds 50% of replacement cost, there needs to be a compelling reason not to replace versus repair. Remaining Useful Life.   We have to do the math. If a repair is made, how long will the item likely last?  If the item is replaced, how long will it likely last?  For example, if a 10-year old appliance costs $125 to repair, but only is expected to last an additional two (2) years, the cost-per-additional-year to repair it ($62.50/year) is more than the yearly cost associated with purchasing a new $400 appliance with an expected 10-year life ($40/year). Efficiency Bonus:  Payback & ROI.   Is there a payback benefit more than reduced repair cost, like utility savings, that justifies replacement over repair?  For example, if you install new efficient hallway lighting for $400 and you project this will result in reduced electric expense of $110 per year, the simple payback period is 3.6 years and simple ROI is 27.5%. Almost all equipment will break, eventually, and all appliances need to be repaired or replaced. Planning and budgeting for a preventative maintenance change-out can help mitigate potential problems, improve the living experience for residents, and ensure the property maintains its competitive market advantage. -John Puller, CPM® Regional Property Manager

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Baltimore Unrest: Leonard Frenkil Responds-image

Last Monday was a difficult day and night for all of us who love Baltimore City and call it home. As lifelong Baltimoreans, our hearts ached. Baltimore is and remains a great city to live, work and invest in; an eclectic, fun, amazing hometown. Getting back to normal started immediately and will be our charge for the foreseeable future. Leonard originally wrote this blog post for IREM, please click  HERE  to continue reading the post from May 5th on IREM’s website. 

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Welcome to the WPM Blog!-image

You asked for it – we listened. …and today we are excited to announce the launch of the new WPM Blog. From time to time, we will be sharing information, tips and insights from more than 50 years of experience in real estate and real estate management. From the pitfalls of leasing up new properties, to tips on creating smart, energy-savings buildings, to the critical business issues of running your community association, there’s sure to be something for everyone. We’ll also cover issues and trends affecting the multifamily, association, and commercial real estate industries. Leveraging the knowledge and expertise of our team of professionals, we hope to create a useful forum and trusted resource for you and your community. Check back frequently to see what’s new. And if there are specific topics or issues of interest, let us know. Just send an email to  [email protected] ,  and we’ll ask our team of professionals to address your question in a future post.

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