ORA Scores: What They Are and How to Improve Them

Consumers often rely on online reviews before purchasing products or trying new restaurants.Online reviews are perhaps even more important to multifamily owners and managers. That’s because the online reputation of an apartment community impacts not only whether prospective tenants visit and tour it but also leasing rates, rents, tenant retention and valuation of the property.

That’s why owners and managers need to pay close attention to Online Reputation Assessment (ORA) scores, an industry standard that measures a property’s online reputation. Created by Houston-based J Turner Research—an online reputation management firm that monitors the online ratings and reviews of over 126,000 properties nationwide—ORA scores establish a score for each apartment community that’s an aggregate of that property’s ratings across various review sites. The scores are based on a scale of 0 to 100 and are updated every month.

This may seem obvious, but industry executives report that they often have to remind their team to simply ask a resident or prospect to post a review after a positive interaction.

“Whether it’s a new lease-up community or one that we’re rebranding, we’ve found that the first online reviews set the tone for that community,” said Stephen Prochnow, executive vice president of property management. By simply asking for a review, residents feel encouraged to take the time to go online and offer their positive feedback. Full article can be found here.

The Benefits of In-House Construction Teams

Part of the charm of the multifamily industry is that a wide variety of tactics can be used to achieve results, and virtually every operator has a unique strategy. Those divergent methods certainly apply to how operators handle their construction processes, as well.

Some completely outsource their construction and renovation projects to various third-party outlets, others use preferred vendors, and some utilize the vertical integration approach by deploying their own in-house construction teams. While all have their advantages, the latter would seem to be the most beneficial for an owner/operator. The decision to opt for in-house construction, however, doesn’t instantly serve as a magic wand to increase productivity at new developments or rehab projects.

“You should only create an in-house construction department if you know you can do it better than your current third-party contractor,” says Frank Roessler, founder and CEO of Ashcroft Capital. “It is a huge undertaking. If you’re doing it for any other reason, then I’d strongly recommend against it, because you can screw it up easier than you can do it right.”

Mill Creek Residential utilizes its own in-house construction team and serves as its own general contractor. The company only uses general contractors in rare instances in select markets.

Chip Bay, chief construction officer, outlines the multifaceted advantages to this approach.

“First and foremost, our interests are completely aligned between the construction, development, and property management teams,” he says. “We’re all rowing in the same direction. Construction is involved from the very beginning. They work with development on design, the intent of the community, and budgeting from the get-go. It allows development to have the best numbers possible during the entitlement process and while they’re securing financing.

“When we’re ready to start the development, we’re better prepared to execute because everyone has been involved since day one. “

Another sizable advantage is risk mitigation. Construction teams involved from the outset are aware of any concerns surrounding the development. They know the intent of ownership and have been a part of the decision-making process since the planning stages and are prepared to execute accordingly.

“Fundamentally what we do in this business is create value and manage risk,” Bay says. “The most risk is often on the construction side. Our job is to manage that risk and minimize it to any extent that we can. By having our own in-house construction division, we have created a team approach on each development, which gives us the maximum amount of control.”

The vertical integration model fosters consistency in approach, makes it easier to adhere to national building standards and enhances quality control. The holistic approach prevents any “we versus them” or “you do your job and I’ll do mine” disconnect between the teams, Bay says. The in-house construction team is more focused on building a world-class community than viewing it as a prime financial opportunity.

Mill Creek has separate teams for ground-up developments and value-add efforts but exhibits the same approach in both types of construction endeavors. The company has been diligent, Bay says, to hire construction personnel that are not only greater builders, but also outstanding business people.

“They are partners in the business itself, so they have a vested interest in the development being successful,” Bay says. “That motivation permeates through the entire organization. It provides professionalism to the construction side that you might not get if you’re outsourcing that effort. The same culture that exists in the construction division exists in the development division and throughout the entire company. They’re one and the same.”

Full article can be found here.

Mill Creek Residential Begins Construction on Florida Apartments

Mill Creek Residential has begun construction on the luxury, mixed-use community Modera Coral Springs, located in the heart of Coral Springs, Fla. Situated at 3250 N. University Drive, Modera Coral Springs will offer 351 units and more than 14,600 square feet of retail space.

The project is part of the greater Cornerstone at Downtown Coral Springs development, intended to inject revitalized living, dining, retail and entertainment choices into the city’s busiest area. The apartment community will welcome first move-ins by summer of 2023.

“The location on University Drive is directly amidst one of the most sought-after locations in the city,” John Grimaldi, vice president of development, South Florida Region, told Multi-Housing News. “The community is positioned near the influx of a large number of existing retail, restaurants and boutique shops that will be easily accessible for our residents . . . The area, which services the surrounding Coral Springs and Parkland communities, is rapidly revitalizing and has a promising future.’”

The property’s wrap-style design aims to make the apartment community distinctive in a market where walk-up, low-rise rental properties predominate. “While the product is unproven locally, it also serves as a great opportunity,” Grimaldi said.

Full article can be found here.

Homebuilders Chase SFR Market

Investors and residents are gobbling up single-family rentals, so developers–both traditional homebuilders and multifamily specialists–are clamoring to feed their growing appetites. According to the National Association of Home Builders, there were approximately 14,000 single-family built-for-rent starts in the third quarter of 2020, a 27 percent increase over the prior quarter.

“’We looked at a few other opportunities, including senior living and student housing, but single-family rentals seem to have the most opportunity,’ said Callum Parrott, President of Single-Family Rentals.

We are expanding into a space that has typically been managed by mom-and-pop operators. ‘Mill Creek is vertically integrated, with construction, development and operation capabilities, and we think the product type, while not easy, will be easier than what we have built in the past.’ Plus, the initial markets Mill Creek is targeting—the Carolinas, Georgia, Florida, Texas and Arizona—are all markets in which the company is currently operating.”

Full article can be found here.

Cybersecurity on the Front Lines of Multifamily Housing

“Securing apartment community networks involves more than just phishing tests.

As onsite processes become increasingly digital, multifamily housing organizations have focused more and more on cybersecurity in recent years. Companies are taking cybersecurity more seriously at the board level as investors have pushed for more stringent data-privacy measures, and many of the practices are funneling to the site level, especially with the emergence of the Internet of Things (IoT).

But significant gaps remain in the industry’s grasp of cybersecurity and data privacy effectiveness and how to improve it. That is regularly evident in the incomprehensive contracts written throughout the industry by different providers. In addition, 80 percent of observed cyberattacks used vulnerabilities reported and registered in 2017 and earlier, according to data from Entrata. More than 20 percent of the attacks exploited vulnerabilities that are at least seven years old.

While the industry has taken steps to promote cybersecurity awareness in several areas, particularly regarding phishing attacks and ransomware, a large part of the shift has been reactive. For instance, when new legislation is introduced—such as the California Consumer Privacy Act (CCPA)—companies are only then more likely to focus on how their data privacy and cybersecurity practices are being upheld.

As 2020 brought a host of new threats from opportunistic infiltrators, many organizations don’t yet have a comprehensive understanding of contract law and the company’s obligation to further secure data. Legal teams are helping to bring awareness to existing and forthcoming threats, but it remains in the early stages in the apartment world.

Following is a look at the current state of cybersecurity in multifamily housing and what the industry can do to better protect itself from cyberattacks that could lead to costly data breaches.”

Full article by Jeffrey Kok can be found here.

Making Business Intelligence Intelligent

Collecting lots of data is one thing. Understanding it is entirely another.

More than ever, the rental housing industry understands the value of data-driven decisions. The industry has done a commendable job of collecting the data—particularly in the past few years—but still must make headway in quantifying it and converting it to actionable business intelligence (BI).

Challenges exist regarding sheer volume, uneven integration and simply not understanding how to unearth whatever business intelligence exists within the data. Fortunately, operators are beginning to recognize these obstacles, improve data management strategies and leverage the data in previously unforeseen ways.

But it is not an immediate process.

“Real estate, like many other industries, is experiencing challenges with data management in general,” says Justin Pardy, Senior Data Analyst. “One of the challenges is collecting and storing the data in a way that is usable and accessible. Cleaning the data is another big issue, although it is also not unique to real estate.”

Apartment operators weighed in on some of the specific challenges and how the industry can do a better job with data management. Effectively leveraging that data often consists of determining what’s important and what’s not, asking the correct questions and properly analyzing the metrics to fuel better decision-making.

The increasing number of partners with the ability to integrate is alleviating some data integrity challenges. Whether a property management system or industry supplier, a seamless, accurate flow of information reduces many of those concerns.

Full article can be found here.

MFE – 2020 a Year of Innovation for Multifamily Operators

“Taken as a whole, the multifamily industry isn’t exactly known for moving with lightning-fast speed to implement new technology and processes. But in 2020, operators across the country had to do just that.

With on-site leasing severely curtailed and social distancing protocols in place because of the pandemic, apartment managers had to turn on a dime and find new ways to serve prospects and residents. Self-guided and video tours are some of the more high-profile and well-known adaptations, but they are far from the only examples of multifamily innovation and ingenuity the industry saw this past year.

Creative operators engaged artificial intelligence (AI) leasing agents, cutting-edge resident referral platforms, and more intensive lead management, to name just a few of the innovations. They also emphasized thorough and frequent communication to associates and residents.

When Mill Creek Residential couldn’t offer in-person tours because of the pandemic, the apartment company saw the number of leads who initially reached out online or by phone jump dramatically—by up to 50%, says Stephen Prochnow, senior vice president of property management for Mill Creek.

As a result, the company intensified its emphasis on “providing prompt and thoughtful responses to customers,” Prochnow says.

To ensure those responses take place, Mill Creek created a robust database using a variety of sources to track the response time to each lead. The database also tracked which kinds of tours a prospective resident took (the company expanded its use of in-person, self-guided, and live video tours).

“We expanded our lead reporting to track which of those tour types were most effective and led to closing,” Prochnow says. “It was a focus on analytics and KPIs around the lead management and reporting process.””

Full article can be found here.

Multifamily Industry Can Help Create Path Forward on Inclusion

The multifamily industry’s operations teams are some of the most diverse workforces in the U.S. However, as with many industries, it’s readily apparent at the higher C-Suite and executive leadership positions that the industry’s hierarchy predominantly consists of one demographic.

According to the “2020 CREW Network Benchmark Study: Gender and Diversity in Commercial Real Estate,” published at the beginning of September, the number of women in the C-suite has stayed consistent at 9% since 2010. In addition, approximately 60% of respondents to the study, which focused on diversity and inclusion, reported that their workplace is “not very” or “not at all” diverse.

“We are calling on executives who can affect change to take this study seriously and take action in their company and in the industry,” says Wendy MannCREW Network CEO Wendy Mann. “CREW Network remains committed to creating a more diverse, equal and inclusive industry—but we can’t do it alone. Industry leaders must address these issues as a business imperative—and take action now to make this important investment in our companies, our employees, and the future of our industry to remain a competitive and attractive employer.”

Wells Fargo analysis of 165 equity REITs found that companies with more women on their boards achieved higher average price and total returns than those with no female representation, up to 2.33 percentage points. A study by Boston Consulting Group discovered that companies with management teams with above-average diversity produced 19% higher revenues. And according to McKinsey Research, gender diversity is correlated with both profitability and value creation. The same research ties profitability to higher levels of ethnic and cultural diversity, as well.

So how can multifamily create a pathway for advancement and inclusion? It’s a seemingly daunting task, but multifamily has evolved on its own over time.

“Things have changed dramatically since I entered the multifamily space almost 30 years ago,” says Kellie Hughes, senior vice president of operations for Mill Creek Residential. “At the community level, the majority of office associates were female, and the majority of service associates were male. Now, the community teams are as diverse as our customers in gender and ethnicity.”

The next step for multifamily is to hire, retain, develop, and promote the next generation of leaders. This requires organizations to understand their current workforce, identify areas in which they are performing well, in addition to identifying areas in which they might want to improve. Many companies, such as Mill Creek Residential, are actively working to make diversity and inclusion a top priority. Once organizations have determined their goals, they can develop a strategy for change.

One way to do this is to understand and train around bias awareness.

“I don’t believe that the lack of women or minorities in executive positions is purposeful, it’s just human nature,” Hughes says. “In many cases we tend to hire people who are like us. As an industry, we need to make a cognizant decision to create a diverse culture at all levels of the organization, and unconscious bias awareness can help in this area.”

To Hughes’ point, the McKinsey report found that ethnically diverse companies are 35% more likely to outperform their competition. Additionally, a Harvard Business Review study correlating diversity in leadership with market outcomes found that companies with representative diversity are 70% more likely to capture a new market.

According to Jerry Williams, vice president of human resources for Mill Creek Residential, multifamily can learn from the model of post-millennium businesses.

“Take a look at startups in the last 20 years,” he says. “They tend to focus on equality and inclusion. They recognize hiring gaps and develop plans to address them. They aim to improve the work environment and work experience for all employees.”

Williams believes organizations should create a strategy to improve categories that are underrepresented.

“Advertise your company at historically black colleges and universities and bring in more women and people of color from our major universities for an opportunity to interview and receive an employment offer,” Williams says. “Make a conscientious effort to recruit minority and female candidates for employment and internships. It’s about exposure and opportunity. Require that all recruiters used for presenting candidates for hire to your company include a representative number of qualified women and minority candidates for job openings.”

Williams also encourages multifamily organizations to post all job openings within the company and encourage qualified minority hiring and include an incentive for doing so. Organizations should be transparent about the company’s Equal Employment Opportunity status across the company’s leadership team, he says, and members of the executive team should be informed of how well the company meets minority and women hiring practices and challenge the status quo when necessary.

According to Jonathan Jeans, vice president of operations for B.HOM Student Living, the industry’s mentorship and development programs could better address the specific obstacles people of color have historically faced when navigating corporate America. A major obstacle for team members who are people of color, he says, is the lack of mentorship and development programs that are facilitated and championed by people of color.

“There aren’t people of color at the executive level to mentor and facilitate a development program geared toward assisting the advancement of people of color,” Jeans says. “It is important to have diverse people of color represented at the executive level, and that those individuals are brought into the program to offer guidance to team members seeking additional professional advancement within an organization.”

As companies are becoming more diversified in the entry to midlevel management positions, it is even more motivating for people of color to see a potential path toward the executive level by using executive representation as a motivating factor, Jeans says.

In order to take significant steps to improve leadership opportunities for women and minorities, the industry must provide mentoring and training to broaden their skill sets. Offering opportunities to interact with senior management and coaching associates on how to present themselves in a leadership situation is also important. When doing so, industry leaders should remain aware of the unique challenges facing women and minorities, according to Hughes. For instance, women are often more reluctant to ask for promotions.

Full article here.

MFE – True Integration Versus Data Transfer

Multifamily operators must be diligent during the vetting process when considering a true integration component.

How will the provider respond when there is trouble with the system?

What support resources will I have access to?

 How flexible is the system setup?

Does it allow for configurations based on roles within the company?

How responsive will the provider be after I’ve signed a contract?

How quickly can the provider adapt their technology to meet the changing needs of the industry?

The pandemic has underscored the need to modify on the fly and have the ability to institute quick updates and modifications. The time component also comes into play. How often do data transfers occur? Am I going to be able to access the information I need in real-time?

“You can never be too careful when vetting a new technology partner,” says Valerie Gibson, IT Director of Property Management. “We take every possible precaution and explore every potential angle, because nothing is more frustrating—and potentially damaging—than partnering with the wrong platform. The ability to truly integrate allows both entities to perform to their full capabilities.”

True integration creates solutions and increases possibilities for on-site teams. It allows property managers and organizations to operate their leasing, resident, marketing, facilities, management, and accounting operations in one place—without the need for separate logins.

Full article with these thoughts and more, here.

NAA – New Year’s Resolution: Focus on Cybersecurity

Securing apartment community networks is paramount in a world where data is currency and cyberattacks can lead to costly breaches.

“In multifamily housing and elsewhere, there’s been a rise in cybersecurity threats during the pandemic. In a recent Deloitte study featuring some 880 executives, nearly 70 percent of those surveyed indicated they had seen more cyber incidents this year. Entrata data shows that hacking skyrocketed early in the pandemic, with phishing attacks jumping from fewer than 5,000 in February to more than 200,000 in late April. Cyberattacks as a whole were up 34 percent from March to April, according to Check Point Research’s mid-year report.”

Read the full article by Jeffrey Kok, here.