The subject property is a class B high rise whose first 3 floors were renovated into high end luxury apartments. These 60 rehab units were upgraded with top of the line finishes and priced well above the local market rate which created one of the more challenging lease-ups we have ever faced. While the top un-renovated floors retained a minor vacancy problem, the on-site team really struggled to lease the rehabbed units and was only able to secure 15 leases in 10 months at a leasing rate of 1.5/month. Not wanting to offer concession to the average rate of $1160/unit, the owner decided to hire class to increase the leasing velocity.
CLASS was retained to increase the leasing velocity. Within the first 100 days, CLASS had secured 18 new leases for the rehabbed units. Assuming that the property would have maintained the current leasing velocity without CLASS, the additional leases generated by CLASS resulted in an immediate increase in occupancy and provides an extra 13 move-ins that the property would not have secured otherwise.
COST OF CLASS VS. INCREASE IN RENT REVENUE By hiring CLASS the property was able to gain an additional 13 leases over a 100 day period. Those 13 leases cut the lease-up time by 9 months and generated 9 additional months of rent revenue from the 13 CLASS leases. At a rental rate of $1160, the additional rent revenue generated is (13 units x $1160 x 9 months) = $135,720.00
The cost of CLASS is 1 months’ rent x 18 move-ins + $2500/month in travel related fees for a total of = $30,880.00.
ROI of CLASS: $135,720.00 (additional rent revenue) less $30,880.00 (cost of CLASS) = $104,840