The subject property was built in 1967 as a college dormitory and converted to “by the bed” student housing in the late 1980s. The property was located in an extremely saturated market and was unable to put together a strong marketing push, due to an agreement all apartment communities in the area had with the University. The property was also losing a majority of potential prospects from a reputation problem, as the result of a series of events that occurred the previous calendar year. Additionally, the onsite management company had changed twice since the property opened, and there were no experienced leasing individuals on staff. The management turnover, along with the unforeseen events on-site, had led to neglected maintenance and a growing reputation problem.
On March 8th, 2013 and after over 90 days of pre-leasing, the property was only 15% pre-leased for the next calendar year with an average rent of $1,100/bed. The property had leased an average of 25 beds per month in the previous 90 days.
1. Lower the asking rents of the property or increase the concessions
2. Hire a new leasing staff
3. Hire CLASS to accelerate the lease-up
The owners chose to hire CLASS in order to avoid lowering their rents and risking potential complications when procuring their permanent financing. The owners also wanted to mitigate the risk of a bad hire.
CLASS recognized that the property needed to improve its marketing effort in order to get more prospects through the doors. Most importantly, a strong closer was needed to capitalize on any traffic created. Even if prospects were coming in the door, the property was still priced at the same level as the competitors that were amenity rich, newer and located closer to campus. There had also been very little done in the form of follow-up with previous prospects as well as with the tracking of marketing sources that were leading to qualified traffic.
CLASS implemented the following changes to the leasing and marketing platform:
1. In order to create a sense of urgency, CLASS limited the units being offered to only two apartments. CLASS also setup mini models in the apartments and helped redecorate the model being shown to provide for more appealing visuals.
2. CLASS streamlined the leasing process and was able to train the CA’s on the proper techniques of phone calls, the product demonstration, closing strategies and follow-up. Previously, there was a severe lack of follow-up being done onsite, as prospects information was typically not being taken at all to allow for proper follow-up. With CLASS onsite, applications were soon being approved quicker and move-ins were scheduled more efficiently resulting in a huge drop-off in cancellations and unhappy future residents.
3. Coming into the property, CLASS was informed that the property was very limited with outreach marketing that was allowed, due to an agreement all properties had in the area with the University. Therefore, CLASS realized that the main marketing source was going to need to be a strong push in word of mouth and referrals from current residents, as well as the onsite CA’s.
4. CLASS eliminated specials from all marketing material and refused to give them out prior to the closing table. CLASS was then able to leverage any specials at the closing table to secure the lease.
By implementing these strategies, CLASS was able to increase the traffic and significantly increase the number of leases. Over the next 30 days, CLASS leased over 43 bed spaces, got the property pre-leased to over 35% and reduced the fall off to below 10%.
RENT REVENUE PER MONTH WITH VS. WITHOUT CLASS (per $1000.00)
*assuming property continued the current unit absorption rate. Click graph to enlarge
COST OF CLASS VS INCREASE IN ANNUAL RENT REVENUE
*The increase in leasing activity resulted in 17 additional move-ins the first month onsite.
*Additional annual rent revenue generated by these additional move-ins = $224,400.00
*Total cost of CLASS Service = $12,600.00. Click graph to enlarge