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"...you can imagine when you hit a renter with a 7% increase and they're expecting something that's sub 2%, that's problematic, and it can lead to turnover, it can lead to notices, and so really it's about managing and massaging the messaging, and it's all about the team, it's about the team component." – Ryan Funt, Live on Stage at the Affordable Housing & New Apartment Development Seminar
In this live episode of Sync or Swim, Rentsync's VP of Growth, Max Steinman moderates the Lease-up, Operations and Property Management panel at SVN Rock's Live on Stage event for Affordable Housing & New Apartment Development. The panel features marketing and leasing experts, Todd Nishimura, Senior Director, Marketing, Leasing and Communications at GWLRA, Ryan Funt, Director of Marketing at Fitzrovia and Lisa Jean, Director of Leasing at SVN Rock Advisors, who share their years of expertise helping new builds go from lease up to stabilization.
In this conversation you'll hear advice from the panel about:
Links mentioned in this episode:
0:00:00.0 MS: I know everyone. Thanks for joining us. I'm really excited to be here and moderate this panel, we have three really experienced professionals to hopefully share some knowledge, and we're gonna be talking today about Lisa operations and property management, a little bit of a generalist type subject, that's pretty much just the entire requirement industry. I guess, but we're gonna dive into some individual topics from each of those, and our friends here are gonna share their knowledge with us, we've got some exciting stuff to share, just start off with who we are... I'm gonna be a moderator. My name is Max Steinman, I'm a partner at Rentsync, who is the lunch sponsor, so you're welcome for lunch, I hope it was delicious, and I head up all organic and in-organic growth opportunities at Rentsync, which is a company that specializes in marketing solutions, both software and marketing and advertising solutions for the multifamily industry, and being there for about eight years, but I've worked in the multifamily industry my entire working career before on the finance and ops side, and in recent years with the purpose-built rental boom that we're experiencing across the country and in the US, Rentsync's evolved in services to really cater to the lease-up marketing services that clients are needing these days, which is very different than working with just stabilized assets.
0:01:35.6 MS: For our panelists, I'll start with... I'll go right to left. Actually, I'll go left to right. We'll start with Lisa Jean. Lisa is actually with SVN. Lisa is an operations specialist with over 14 years experience in multi-residential, she works with owners, third-party clients, contractors, designers, bringing the best product really to the market, her passion for renovations has been witnessed across Canada with over 100 in-suite reno's multiple lobby corridor renos as well, and before joining SVN, she was the district manager or a district manager for a Real Star property management for 15 years. We've got my friend Todd, Todd Nishimura, he is a Senior Director of Marketing, Leasing and Communications at GW Realty Advisors. Some of you may recognize them or have known them as Vertical Resident Services, but I guess that's a rebrand as a somewhat late...Two years ago or so. In this role, he's responsible for leading and directing all brand digital and social marketing strategies, and while at GWLRA, Todd has led the launch marketing for six new multifamily developments in Edmonton, Calgary, Vancouver most recently as well, in two properties under the Livmore brand, which is a brand that has definitely made some waves in the industry and is pretty recognizable now, and he started this month on Chronicle, which is a 128 Unit, 21 story community in Downtown Vancouver.
0:03:25.7 MS: Prior to GWLRA, Todd held marketing positions at the Four Seasons Hotel and Resort and Campbell Soup Company. So he brings a different perspective as well to the multifamily industry, and holds an HBA from Western University, MBA from Queen's University, and currently Todd is the Board Chair of Portage Ontario, which is a not-for-profit that also that helps youth overcome drug and alcohol addictions. And last but certainly not least, we've got Ryan Funt. Ryan has over seven years experience, professional experience in residential and commercial property management. Previously, Ryan work for Rhapsody Property Management as a regional manager, where he was responsible for the whole eastern portfolio of class a purpose-built rentals. Notable projects that you may have heard of, I include v123, which is a Toronto project, Park Central Central Park level, which is a Montreal, and the Montgomery, which is a young... And again, Toronto and Ryan leads all purpose-built rental Marketing and Strategy for its Rovio, which is almost like a startup within our industry, new brand, really up and coming, and Fitzrovia is a fully vertically integrated developer and manager of class A multifamily properties across the GTA, they currently have a portfolio of five, almost 5000 units across 17 total towers and 4.6 million square feet of gross construction area, so they've come out of the woodwork and are doing big things quickly to say least, and Ryan's a very busy guy. And he holds a Bachelor commerce degree with distinction, and a Bachelor of Environmental Design In Architecture from Dalhousie, which actually, Ryan and I went to Del together. So East Coast connection. So we're gonna go in through these subtopics and cover a lot of ground today, and we're gonna start with marketing, both Todd and Ryan have a lot of marketing experience in our industry, and then we're gonna kinda flow through almost like the value cycle or the value chain of how a renter or the renter life cycle. So starting with marketing, brand advertising and technology, basically, there's been an evolution in marketing in our industry and that it had for a very long time being seen as a way to fill units. In purpose-built rental development, it can now also be seen... as not just an expense, but an investment that you can make back into your assets that can actually drive the value of the asset itself, and I think that's what we're gonna sort of explore today. So we're gonna start with Todd, to what are the key components of a sound lease up marketing and advertising strategy in 2021 when it comes to a purpose-built rental, and also, how do you know when to start the marketing of a project?
0:06:56.9 TN: Well, thanks Max, and thanks to Rentsync and to Derek in sport inviting me out to this...It's nice to be out. I will reveal this is, this is Sue I bought in February 2020, which I'm now wearing for the second time the other time was for a funeral, so it's nice to be able bound seeing people and talking to industry and my colleagues. You were saying, I like doing these forms and a lot of them have been virtual, so it's good to get out and put faces to names, knowing that the topic really about is lease up and new developments and assuming...that's what you're here to learn more about. I think the key word up here is really brand, and I think Max set it out really well that when I started in this industry almost nine years ago, marketing, I feel it was the caboose, that it was an afterthought. And maybe for some of you, not just an afterthought, but a frustration of, what are we spending money on?
0:07:46.7 TN: And I think that not across the board, but I think in those nine years that brand and marketing is now, at least in our organization, leading the conversation, because in getting back to that word brand of the importance of creating a strong brand to distinguish your offering, not just to get prospects to rent units in it, but for GWLRA residential, really coming up with the brand early, really sets the stage for a number of things, it impacts design, it impacts signage and way finding, and if you have a cohesive brand that will resonate.
0:08:22.0 TN: I think... There's two schools of thought. We were sort of saying this earlier as well, that maybe brand is meaningless and it's a bunch of pretty pictures, but I think I can answer to the question of what to do start early, and I think have what we call the brand narrative, have a story to tell about your offering, and I have a great respect for Ryan for what his firm is doing...
0:08:47.4 TN: Listen, you can create a name, a bunch of you in your board room can create a name and then you can hire an agency to design a logo and you know what that might do. But I think that for us, we're looking to create experience, we strive to be the Starbucks of the multi-residential industry in Canada now, you may love Starbucks or you may hate Starbucks, but I think what you can't dispute about Starbucks is that could they create an experience and in creating experience, they can command a premium. And we're all here about generating higher revenues and a higher dollar per square foot, so we invest in brand in order to create that experience. Perhaps Max, you can go to the slide is actually the next one here...I can talk to it, we came up with the Livmore more brand, and we can have it on that slide there, if you like. But really investing the time and effort to come up with a story behind the Livmore that this was an aspirational brand about Livmore, it's about doing more whatever it is that you do or like to do by renting in a purpose-built community, it allow you to do more of whatever you love, and then it kinda gets into that area of security of tenure, and professional property management.
0:09:58.9 TN: But really having that aspirational, and I think what we're dealing with here at our company is wanting people to aspire, writing, giving them a reason why they wanna live with us, as opposed to say, Ryan's communities or something like that. But being able to tell a story that resonates with people, that's meaningful, and you could choose to do otherwise, it's not necessarily wrong, but I think in our experiences and taking great influence from what we see in the US, there's a story to be told, and we're surrounded by brands all the time. So how should... Or, how is purpose-built rentals any different? I don't think it should be. And really taking where I spend 8 years at Four Seasons Hotels, brand was everything, and brand allowed you to charge 400 bucks a night at Four Seasons New York, 'cause at the end of the day, it's a place to lay your head. And the same as our product, it's the same, but what are you telling and really having sort of the brand is fashion statement...
0:10:47.8 TN: Of, I live at the Livmore, I live at the Waverley, what that means about you and what you say and just to be proud of about where you live, so I guess in a round about answer to the question, start early, consider some of these things. You don't necessarily have to invest a great deal of money, but understand the story that you wanna tell who that demographic is and be consistent and do it early, because I've seen too many times, it's like we'll come up with a name and then we'll go out there and doesn't really mean anything. And I think the more that you can direct both your staff and then definitely consumers, the greater your chances of being successful.
0:11:20.8 MS: Yeah, I think that's great insight. And I think the other thing to keep in mind is it doesn't have to be the McLaren brand, it can also be the Subaru other Toyota people have a lot of brand loyalty to those other brands, so based on the asset class, obviously, you need to find the right, fit, but it's pertinent regardless of the asset class. Really? So we'll go to you, Ryan here. So brand being important, how do you guys have Fitzrovia go about differentiating your brand and setting yourself aside from the competition, say aside from Todd and the Livmore.
0:11:47.8 RF: So I think that there's so many ways that you can set yourself apart. And differentiating, there's artificial intelligence, there's chatbots, there's TikTok marketing now, there's influencer marketing now, there's virtual tours, but specifically rendered virtual staging, and it's amazing how far these rendering firms have come with respect to rendering in furniture into virtual tours. So you no longer have to actually invest in physical furniture in your model suites, but I think Todd hit the nail in the rock consistency is king. So, no matter how you choose to differentiate, you wanna make sure that there's consistency... And I'll give you an example with the Drake Hotel. If you go to their hotel website, and then you go to the Instagram page, you're gonna get the Drake Hotel, it's gonna feel like the Drake, similarly with multifamily. If you have a property that's in lease up and you have a Facebook page, an Instagram page, a property website, it should feel like your property and not like three distinct properties. That's definitely fatal. So I think that consistency across the board, it's really, really important.
0:13:13.7 MS: And we're gonna go through actually just a couple of examples of brand, I recognize we're missing maybe a visual or two for you to... But do you wanna just give us an example of something that you guys have done that's been really impactful and successful and unique with the live more or any of your properties as.
0:13:36.7 TN: The images here are in support of our first live more that we launched in 2018. So the Livmore is at the corner of Bay and Gerrard units, 43 stories. So this was at the time and continues to be the flagship multi-residential project for GWLRA. And the question being something impactful that we did that I was proud of... Again, I mentioned before about the Livmore brand, we really teased it, we did a brand reveal and we had a local city council there, we got on City TV news, we had our president was there as well, but we really played on this living more type of idea and work, play and live. And what we did, and with our creative agency community, we created interactive hoarding, so what this hoarding here is you can see some drums, you can see a saloon. We also did kind of a scrabble board type of thing as well, that allowed people to interact with it, and to the best of our knowledge, I think this was done in Spain, but I think we were the first ones to do in North America, as far as I know. And it really paid off, and I think this is what I was referring to before I tell a story. Make it consistent. So this paid off about living more, doing more, do you like music, you like crossword puzzles, whatever it is that you wanna do, and it allowed people to interact and it was a great capture point. So this is actually on the West side of Bay, just south of Gerrard that we did it in, and I think it was an innovative way to do it, and again, referencing back to brand, we still could have done this and it could have been in support of a brand that had nothing to do with Livmore, and would it have been affective? Possibly. But there needs to be to run for some consistency. Does it all make sense? Do the touch points all pan out and deliver the same message, and I think the more that it does, there is strength in that number and that equity, and this was not incredibly expensive to do, and it really had an impact and prospects came back and talked about it... And it got us on the news as well.
0:15:36.5 MS: That's really cool. And Ryan, do you have an example of something unique or impactful that you guys have done recently?
0:15:44.5 RF: So this is interesting, I would say... So the figure that you're seeing there on the left, his name is Birdo Jerry Rug, and he's a microinfluencer, 19000 follows on Instagram, and he's also a famous muralist, he's done commissions in Russia and Shanghai, in Los Angeles and Montreal, and he did this two-story mural in the lobby lounge at the Waverley, and he did a fantastic job. And we approached Jerry Rug, we asked him, Would you be interested in doing some YouTube mini series to help promote the property? And he, willingfully agreed, which was fantastic, and the amount of impressions we got from this was amazing, and it was an authentic tie back to the property, just given the art component and how important art is to The Waverley, and then it resonated with our target consumer as well, and then more opportunities started to blossom, he launched a swimsuit line, which you see here, we got to shoot some incredible lifestyle photography and really promote our pool amenity, and we also got to...
0:16:55.1 RF: Did you ever get to see face... Yeah, yeah, for sure, yeah, yeah. He reveals it sometimes. He's quite the character, you guys should meet him, but anyway, we were able to offer residents 50% of Birdo swimwear free shipping as well, and it was just an amazing addition to the marketing campaign at the Waverley.
0:17:15.1 MS: and these are really out of the box ideas. And you have to also be doing the fundamentals well too, in order to get to this level, but... Really, really cool. I appreciate you guys sharing that. Just in the interest of time, we're gonna moving... That was our kind of marketing segment, we're gonna get into leasing, and Lisa has been patiently waiting because she's got a lot of good knowledge to share with us, and leasing operations, having an amazing marketing campaign and doing the right fundamentals from a marketing perspective, and investing real dollars into marketing, can all be for not, if you don't continue to invest down the value chain into leasing. So we'll start with Lisa. Just how important is it, you said to have a professionalized leasing staff.
0:18:15.6 LJ: So as we all know, as Max just said, You can spend lots of money on your advertising and your marketing, but if your staff aren't actually closing any deals, you're sitting with a long lease up, or sometimes the staff will take the path of least resistance in their leasing really fast, and they're not communicating back, "Hey, this unit is going like hot cakes, we've rented 10 out of 20. There's an opportunity there to increase the rent on that particular suite type," especially in lease-up, or it could be that you have a suit for whatever reason, people just don't like... Could have a pillar through the middle of it or something like that, and if that's the case and you need that feedback from the staff as well, so a great leasing agent and well-trained leasing agent will keep all this information in mind and be constantly communicating back up, so that you have the opportunity to make adjustments throughout your lease up, you may wanna push the rents on some units and you may want to reduce the rent on some units... And I know, oh my god, reduce the units, but if not reducing the unit, stalls, the velocity of your lease up, you're no further ahead in the end, but if you are adjusting rents up and down consistently through your lease up at the end, which is what this slide basically is indicating you have the opportunity to grow your base rent, so that at the end of your lease up, not only have you maintained a great lease velocity, you've also increased the value of your asset by increasing your base rent. And that's what a really good leasing agent will do for you. Because a leasing agent isn't paid to sell a unit, they are paid to close a deal, and that's very important because if they're just doing the typical walkthrough, there's lots of units to walk through, you need someone on the ground that is going to make that person feel special and make them want to rent at your building.
0:20:46.8 MS: Awesome, yeah, and this visual, it shows a good versus great scenario, and it's the same argument as it relates back to marketing, you could do this exercise, sort of a proforma exercise across almost every department within your organization, you can see a 100 unit building, the good versus great scenario is maybe 4 million worth of exit value generated, so that's the difference in my opinion, between an expense, a leasing expansive marketing expense in an investment and a...
0:21:26.8 TN: What I like about this as well for the groups here, is that a great leasing consultant for a stable legacy asset is not the same skill set as a lease up, a new development leasing consultant, you can... But I would you recognize the differences that, especially again, as it relates to brand, that if you are creating a brand that is very sophisticated and hip or cool or whatever adjective you wanna use, you wanna make sure that your front line people, you're leasing consultants are reflective of that brand.
0:21:55.3 LJ: I would agree with that, because you don't want in a lease up, no matter what the size of your property is, you don't want the fellow who is also doing the maintenance doing your lease up, and that happens unfortunately. But, if you wanna sit with your lease up forever, that's up to you, but you certainly will sit longer with your lease up if you don't have the right person in play at the time of Lisa.
0:22:24.3 MS: And Lisa, I'll ask you one more question on this, not just finding the right person, but training them... Well, what goes into that? What is the training process? Can you talk a little bit about the importance of training?
0:22:37.3 LJ: Sure, so I just have them to do a market server telephone shop yesterday, and the individual that answered the phone basically... Well, he just said Hello, he didn't even say the property's name. So I was like, Hi, is this ABC apartments? And then the conversation went on, but I let the conversation... And an in a lease up, that is definitely not what you want. That's not what you want in a stabilized building, if you have any vacancy at all, no matter what the reason you want somebody answering the phone that's going to engage the person on the other side that is actively involved in asking the right questions, that is trying their best to get them to the property, and I know with covid, we've all done a lot of remote activities in order to get rentals, but at some point, people will start to want to come to your building and you don't want your leasing agents to lose that skill set of talking to and engaging the person on the other side of the telephone, and even if they are engaging that person via email, for example, they need to have the proper responses coming back, and to Ryan's point, consistency and communication is vital. So your staff need to be trained on telephone techniques, they need to have scripts for email responses, they need to be responding within 24 hours, not two days later, your prospect is gone by then, they need to be providing customized tours, so when they are engaged in communicating to that person, whether it's face-to-face on the phone, via email, they need to be creating and curating a customized tour or response package, so navigating them through their website, navigating them through your PDF, ebrochures or whatever, providing a customized tour onsite or virtually. And I would strongly suggest in your customized tours, you probably have a library of generic ones, but if you can customize it, and some people have been quite creative, you're just basically walking with their phone and video taping themselves or doing a phone... A video phone script with them, if they're interested, when they've garnered the information from the mother, interested in the gym, that's where you're gonna go first, if that's what lit up their eyes when you were talking to them, or they said, Oh wow, I'm really excited about the gym, because I won't have to pay fees, then that's what you need to take them to first, don't take them to the four walls of the unit, everybody has four walls of a unit, you need to engage a dialogue that shows the community and shows the value of your asset as a whole, not just the unit, and that's what a really good trained leasing agent will do. Take them to all your amenities first before I would strongly suggest taking them to every amenity you have, even if that's outside amenities, before you take them into the unit, because then you've created a value, I get all of this...Plus the unit for X, Y, Z, right? So it's not just, Oh, I get these four walls for X, Y, Z, dollars, and you see that a lot, it's just the random tour that says, Here's the bathroom, here's the closet, find out what's important to that resident and show them what you can give them in your... Suite offerings. So SVN has a great training program for that, that's our little segway... Our next session is running in November, so it's seven Zoom sessions, so it's all virtual, but we go over these things, we have over 15 types of closes that we can train staff on to ask for the closes, 'cause that's the other thing, people. They provide all the information, but they don't actually ask for them to live there, they don't actually ask to start the paperwork, and that's a skill you have to teach some people, so... We do that, it's interactive, we have breakout sessions, we have quizzes, and it's homework, for example, so it's very interactive for the people, and we also answer many questions, not only from a leasing perspective, but if they have, I don't know, some kind of conflicts that come up in the building from a property management perspective, we can assist with that as well, or point them in the right directions, if that's the case.
0:27:46.4 MS: Awesome, thanks for sharing. I've actually been through that leasing session myself because I just wanted to learn that persona or the leasing persona. And it is really helpful. I think the key takeaway is you have to train your staff, you can't just find talented people. Right.
0:28:02.7 LJ: I would also say for stabilized building, retrain your staff, because we've had such low vacancy, especially in the GTA, well, outside pandemic or even in the other larger city areas, even Halifax we were talking about earlier, has a very low vacancy right now. And staff who've been with you for five, 10, 15 years get complacent, they get used to doing the same things over and over again, and ultimately, technology changes, times change, the person that's renting is different, the age group is different so retrain your staff as well.
0:28:45.8 MS: Definitely. So moving along to how a new purpose beret will transition eventually, if you're doing all these things, right to a stabilized set or near stabilization, I just wanna touch on how your marketing and leasing efforts may change at that point and what to expect. So I'll start with you, Todd, what changes in the marketing strategy at GWLRA is asset nears stabilization or enters stabilization.
0:29:21.8 TN: Yeah, I think first and foremost, and it may sound on, I don't know, but have that strategy clearly understand amongst yourself and your team on the project, what is our strategy, ie? Are you doing this for cash flow or is it about ultimately valuation, because those become very, very different things. Our new project in Vancouver, we're trying to reach the highest dollar per square foot that we can... So we're giving ourselves a long run way, we're giving a year to do 128 units because we want to really juice up that dollar per square foot to the point that if we lease this up in three months, we have failed. We've left money on the table because we've just priced ourselves too low, so you don't really consider and be firm in your conviction of what circumstances change that allow for a spin things, but walk into it with a plan and a strategy of what it is you're trying to achieve and why you're trying to achieve it.
0:30:14.2 TN: And then ads through the course of it, I guess the question really be how you move from lease up to stability list, it's gonna be more of an investment that what we do is, you know, there is a launch events and spending the money... Like what I was showing before, where we had media, there was an expenditure that's involved with it, you don't necessarily have to do that, but really recognizing to get your name out there and to start it off being out-of-home advertising your... Is your part advertising, if you choose to do that, it will be heavier up front, because it does pick some kind of build a velocity before we go from launch to temple, and then as you are leasing up... I think for me at least, it's just really a measure of being efficient and the spend and cost containment, you don't have to spend as much when your inventory is dwindling and you're gonna be left with probably the highest price units in your dogs. But I think it's just a matter of, I know what you're gonna spend, but it's not a straight line of 12 months and divide those costs, it's gonna be heavy up at the beginning and slope downwards as you get to stability to do that and...
0:31:14.8 TN: Yeah, I think that this is typically... Your mileage may vary, but about a year to get things up, but I think being mindful, and I said a lot, I say it again, I can't stress enough of what is your plan prior to this thing starting, because if you are going to know if you're building the plane in flight, as I like to say that is just fraught with error and you... Something's gonna go and it may not be good, so just really decide and have a plan and stick to that plan unless... Events and circumstances change.
0:31:45.8 MS: I appreciate that insight. And one thing to keep in mind too, it may feel like you can take your kind of foot off the gas pedal a little bit, and I'll jump to Ryan on this, but generally speaking, turnover is quite high in year two, if you were to fall within the average of leasing up in 12 months. Why is that? And how can that be mitigated?
0:32:18.8 RF: Can you guys hear me? Yeah. Okay, it's actually a really good question. I would just say that the lifting of rent controls on new product, that's a very novel concept, it's even more so a novel concept in the eyes of the consumer and in the eyes of the renter, so they can sign a lease at a brand new property in downtown Toronto, thinking that your property is subject to rent controls when it's not...And so you can imagine when you hit a renter with a 7% increase and they're expecting something that's sub 2%, that's problematic, and it can lead to turnover, it can lead to notices, and so really it's about managing and massaging the messaging, and it's all about the team, it's about the team component. And we keep going back to that. That's really, really important. And so what I also find interesting is you see a lot of operators taking their key heavy hitters on the leasing side at stabilization to the next lease up, it's not necessarily a bad strategy, but what I would encourage is that some of your heavy hitters are on the ground at stabilized, because they need to get you those above market increases year over a year, and
0:33:36.6 TN: I guess what I'd add to that in terms of if your development is in a major center, like if it stands on Toronto, expect a 30%, 40% turnover. That matter, don't tell me how well your operations are everything, it's not your fault, it's people's lives change and they're gonna move out A. B, if you are offering concessions, and as many of us, all of us have during the pandemic, and if you offered one month or two months, I saw three months. We never did that, but at the end of that one year that residents net effective rent is gonna spike, and they need to kind of figure out... And that's where a lot of the turnover happens, where they just kind of face facts and say, I can't afford this anymore, so build that into your thinking, and I guess I'll give another tip of what we do, if you are giving one month or two months free don't blend that across the course of that one year, place it up front, so that in the first couple of months they're rent-free, but then by month two or month three, they're not paying net effective, they're paying market for what that is. So it's easier for them. Now they have 10 or 11 months to get used to what that rent is, so at the end of the term, there is really no net effective anymore, there is no spike because presumably they've had 10 or 11 months to get used to paying that rent, but I think that's the number one thing for us, especially with new developments of, why are you moving out? You want...Breaks my heart. Oh, I love it here. It's great, everything else. Why, you mean then I can't afford it? But turnover is a fact of life and something to really consider and build into your PNLs when you're... Especially when you're doing new leases.
0:35:06.6 LJ: That's an interesting perspective, 'cause a lot of owner operators, that's exactly what they do, they take that concession and divide it, and then it's a big hit when they move out, so loading it up front, it does make sense. I don't know how the accounting works out, but yeah, it's a good idea.
0:35:30.9 MS: And I can imagine that you're well-trained SVN leasing agents, likely aren't going to be pointing out the non-rent control scenario and the potential of seven or 10% increases at the time of getting those deals closed, so... Turnover, it can be a good thing, but as long as you see it coming and you expect it and you plan, you strategize your marketing and leasing efforts around it, and it doesn't just kinda hit you inside rail, you're out of nowhere. So we're gonna keep moving along into operations, and its operations is a massive topic. I'm gonna try to relate this back to kind of the effort it takes to fill the building in the first place, and how operations can impact that because it ultimately operations is part of the product, the four walls of the product, but the staff, the maintenance people that's part of the product as well. So we'll start with Lisa on this, and just love to hear how is the operating a brand new building differ from operating a stabilized building? And what considerations do you need to keep in mind?
0:37:03.7 LJ: Well, in operating a brand new lease-up, you have to remember, you have all these people coming to you and they're new to you, and you're new to them, so no matter what their history is for accommodation, maybe they're a seasoned renter, they're still new to you and you're still new to them. So communication key, you have to have good processes up front and you have to communicate well during moving while they're first there, you need staff, as soon as you have occupancy, you can't have the leasing agent be the one who's renting the units. I mean, especially if you have anything over 50 units, if you have one person that is doing all the move-ins, helping with the deficiencies in the units, running around with contractors and trying to rent your units, your lease up is going to go slow, no matter where you are what product you have, or how much money you spent on advertising and marketing, so how staff have cleaning stuff, it's really bad to have a really nice product and all this effort in your advertising and marketing, but you're in construction for the most part. And a lease a, especially at the beginning, there's still some sort of construction going on, whether it's in your parcades, your exterior, you might have achieved occupancy in stages, so you know you might have the first 10 floors, but the next 10 floors are still under construction. Make sure you have cleaning staff, whether that's your own staff or whether you outsource that staff, it's vital, don't let your leasing people do that work for you, one, it won't be done properly and two again, you're taking them away from their primary role. The other thing I would suggest is having a proper move in resident handbook, whatever you'd like to call it, but make sure it's something that is for the resident and for a user purpose, so things like what to do, especially in new builds, everybody thinks a new bill there's never gonna be any maintenance issues, but you can have no filters in the HVAC systems, you can have the hookups not to Your washers and your dish washers, you can have flooring issues giro... I mean, the list goes on and on. So if you don't have elevator problems, very common in new builds, try sorter issues if you're using them, very common in new builds, if you don't have a communication piece, so to your incoming tenants, and it's even nice to have on display for when you're renting and leasing to say, Aha, this is what we give out to the residents so that they understand what's going on, give them as comfort, it's not marketing tool though, to say how great the developer is, if you want that piece habit on a second document, whatever sustainability things they have used initiatives, they have taken what their mission vision statement is, yeah, it's a great marketing tool, but your resident is going to maybe glance through that and turf at some point, you want them to keep the manual for ongoing purposes. So communication, like I said, is key, that is not only face-to-face by in documents you can provide to them, and that's not different really in lease-up than an stabilized, it's just you need to ramp up for lease-up, you need to have these things in place for occupancy, don't have 20 people already moved in and none of this done, you're doing it in the back end, you need to do that upfront, so it's almost part of your marketing plan and then maintenance. So in a new build, again, lots of issues pop up, make sure you have somebody available, whether that's a contractor that's still on site because you still have construction going on, whether it is a maintenance person that you use that goes from building to building, or if someone dedicated to your building, make sure somebody's there so that the response is within a reasonable time, one, we should be responding within 24 hours to the inquiry or to the email, whatever is given to you, but somebody should be showing up within 48 hours to do some kind of work, or assess the problem, and if you don't do that, especially in lease-up, your Google reviews are gonna be bad, and it's evident all the time, there's so many examples out there, so it's something that you are in control of to make sure that your lease up goes well, and your brand is well represented in this space.
0:42:32.2 TN: I think a more practical consideration for many of you, I guess, or developers, the day you get occupancy should not be your move-in day. We allow a month. We learned that the hard way. But first of all too, especially in city Toronto occupancy permit is... I won't get into it 'cause I get frustrated, them set, but how and when they do that, but whenever that date is, do not... I would just say, Do not have your move-in day that same week, allow a month, a lot of month to get your house in order, the back of house systems to make sure everything's there and it goes...And as we've been saying consistently, that first impression is really important, and we're just touching on that Google reviews, but that could have a negative impact on your lease up if people had people...had a shitty experience moving into your building and allow yourself that time of at least a month to get everything, and if you find out you don't need a month... Great, go crazy. But two...And I've been, I've lived through this where our move in was the day after that, we got occupancy and we were not ready and through the skin of our teeth, we got it done, but I think it's planning and understanding just to give yourself enough time to navigate through that, because it never happens even with our development team, the other day, I cast no dispersions on the development team, but six months out, you're not...I've been to industry A, it never hits on the date, six months, it never will... It never, ever, ever will. Plan for that. Otherwise, you're gonna be running around with your hair on fire and it's not a good feeling.
0:43:56.5 TN: And we do see this quite a lot where it's like, Oh, we're planning for occupancy, November 1, we're gonna start moving November 1. Yeah, it's just a nightmare for your staff that's trying to accommodate for the residents moving in
0:44:16.9 RF: Add 60 days to that, and if you're ready, you go back to them and you say, We can now accommodate a bit early, and maybe they're willing to do so, but definitely put some pad on the date that construction gives you...
0:44:28.9 MS:That's good wisdom. I think it's important to know, 'cause Lisa, you made a comment about Google reviews, like it's your operations that will drive your reputation, the building itself, the amenities, how nice the counter top is in the sink, that's actually not gonna drive your reputation. People know what they're signing up for. They presumably tour the building and it's meeting their expectation, so all of your reviews are gonna have to do with your operations and then your reviews basically make either your leasing staffs life terrible or much easier. One of the two, generally nowhere in the middle. And also your marketing team, and so it all kind of goes back to the beginning, which is probably where we'll leave it because I got the zero flash, not me. Do we have time for some questions? Okay, okay. We'll take some questions if anybody has any. So if you're a third-party marketing firm working with a developer, how do you convince them that they should be adding 30 days to that opening period versus occupancy...
0:45:51.1 TN: I don't know if there's an immediate case study, but I would scare them, and the fact of what... And I'm being serious of what would happen if you are not ready in time for us, with each new development, we have blocked off hotel rooms in close proximity to... We have arranged or built into the budgets a per diem to cover food, we're also looking at and preparing the farm. Despite the fact that we have addendum that say, you're moving into a live construction site, these things might be delayed and legally with the RTA, it's the resident's responsibility, they can't rely on us, but that doesn't mean anything, that if their move in date doesn't happen, all they do... And the media loves this, I'm out in the cold. I'm sleeping on a couch because those bastards at war and it wasn't ready yet, so I would then say... And answer your question, present them with the alternative and to say, Are you really sure that you're gonna hit the post with this date because nine years here, eight years in real estate of Four Seasons, it never... Cause are just too many things. It's too picked it never, ever hits the date, and I would just sort of say, what do you have to lose when you look at the downside risk of missing that day and the reputational risk? And how it could serve to stall the project entirely. What's 30 days gonna mean in your overall burn rate on your costs? So that's what I would say.
0:47:11.7 LJ: I would agree with that if people show up on the first for moving and you're not ready, who's gonna pay their moving, they've already... Where is the guy gonna put their stuff? That means there's the cost of the tenant and tenant's gonna want back from you, so
0:47:30.1 RF: I'll just add that tenants aren't necessarily all of that forgiving when you're selling them on a lifestyle that's five star four seasons with an infinity pool and a rooftop gym, and you tell them, it's gonna be ready for May first, and it isn't, but you're still expecting at market rent for 20 of a foot. They're just not forgiving because they feel that they're spending on that gym, on that party room, on that pet wash. And so reputation is everything, and they're not necessarily wrong and they can take things further. We've definitely seen tenants getting together and start tenant associations, which is another nightmare, so Todd's early point build in that extra time, padded up by two months at least, and I guarantee you... That's conservative. Two months as padding is conservative.
0:48:23.8 RF: And if they're not prepared to do the padding, then they should be prepared to add extra costs to offset any displacements.
0:48:35.3 MS: 100%. Maybe another question. Are we gotta wrap it up? Okay, good is time for another question or time to get off stage. Okay, we're getting the hook, so I think that was an excellent panel, I really appreciate that's here for a panelists. Hopefully... We all take something away from it.
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