Acquisition Strategy

EIP Bedroom

Our core target apartment investment property market includes both primary and secondary markets in the Southeastern United States and Texas. We believe these markets to be deep, relatively liquid and possessing desirable long-term growth characteristics. This regional scale, we believe, enables us to take advantage of supply chain and contracting efficiencies, leverage our fixed overhead and compete well for acquisition opportunities.

We generally consider relevant real property and market factors in order to determine whether properties under consideration possess attractive investment attributes, including income growth, stability, and upside associated with improving market fundamentals and/or the potential for added value through renovation or repositioning. In selecting specific properties, we will generally consider the following criteria:

  • Characteristics of the market area, including income growth and stability;
  • Characteristics of the surrounding area and the suitability of the neighborhood services and amenities available to the resident base;
  • Accessibility to the property by both public and private transportation, and its visibility and curb appeal to prospective residents;
  • Physical aspects of the property, including its condition, quality of design and materials and its amenities;
  • Supply and demand factors, capture rates in the primary and secondary market areas, and competitive advantages of the property as compared with competing properties in the same market area; and
  • Potential impact of rent growth, turnover, rent discounts, concessions and other factors that exist or may exist in the competitive environment.

Although the assets have “good bones,” these assets are typically in need of their first generation upgrades to unit interiors and amenity areas. Upgrades to each of these areas are directly related to the ability to increase rents in the eyes of the residents. This is value creation without the risks associated with major renovations and can be done as units turn without sacrificing occupancy.

In the upgrade process we will differentiate ourselves from competing apartment communities by incorporating our philosophy of matching the look and feel of the apartment community to its resident profile. The look and feel we are seeking is that of a more contemporary, trendy, “hip” look and feel that incorporates into this property’s age group the same look and feel found in new construction of Atlanta-style, tier-one core markets.

The apartment community upgrades will include interior changes that include new lighting and plumbing fixtures where needed, crown molding, changing brass hardware to brushed nickel, painting unit interiors a designer color, blinds, and countertop, tile, and cabinetry modification where needed. The model unit is then designed with furniture and accessories that are commensurate with a more contemporary and fresh high-tech look.

The before and after is dramatic.

A key pillar of our business philosophy is to treat residents as valued clients, not simply tenants. Consequently, we strive to provide amenities like playgrounds, pools, grills, outdoor fireplaces with a patio, high-tech business centers, exercise facilities, and flat-screen televisions in common areas at each of our properties. Additionally, at every property we implement one or more resident retention programs to enhance resident satisfaction and to solidify a sense of community.

Our goal is to achieve a level of customer satisfaction that leads to relatively lower resident turnover and relatively higher economic occupancies.

Management believes our community focus is a significant competitive advantage that leads to some of the higher resident retention rates.

Our primary management and operational activities with respect to our properties are as follows:

Customer Service. Our operating culture is focused on our residents being treated as valued clients, not tenants. Our goal is to provide our residents with consistent service in clean, safe and attractive communities. We emphasize the quality of our on-site employees through recruiting, training and retention programs, which we believe contributes to improved customer service and leads to increased occupancy rates and enhanced operational performance.

Resident Selection and Retention. In apartment properties, neighbors are a meaningful part of the product, together with the location of the property and the physical quality of the apartment units. Part of our conventional operations strategy is to focus on resident acquisition and retention: attracting and retaining credit-worthy residents who are good neighbors. We have structured goals and coaching for all of our sales personnel, a tracking system for inquiries and a standardized renewal communication program. We have standardized residential financial stability requirements and have policies and monitoring practices to maintain our resident quality.

Revenue Increases. We seek to increase revenue by optimizing the balance between rental and occupancy rates. We are also focused on the automation of on-site operations, as we believe that timely and accurate collection of property performance and resident profile data will enable us to maximize revenue through better property management and leasing decisions. We have standardized policies for new and renewal pricing with timely data and analysis by floor-plan, thereby enabling us to maximize our ability to modify pricing, even in challenging sub-markets.

Controlling Expenses. Cost controls are accomplished by local focus at the property level and by taking advantage of economies of scale at the corporate level. As a result of the size of operations and our regional concentration of properties, we have the ability to spread over a large property base fixed costs for general and administrative expenditures and certain operating functions, such as purchasing, insurance and information technology.