Step into a Trader Joe’s store in Manhattan and you’ll be greeted with a madhouse of customers maneuvering the tight aisles, and employees frantically restocking shelves and holding up “End of Line” signs, which keeps getting further and further away from the checkout. Yet the customers keep coming, loading their carts and waiting in line. This scene is not just at the holidays; it’s year-round.

The store doesn’t have sales; instead, it offers low prices all year long. But it doesn’t sacrifice in quality, either. The produce is fresh, the baked goods look like something you’d find at a gourmet bakery—at a fraction of the price—and none of the items have been sitting on the shelves for very long, at least according to the frequency of which employees restock the shelves. Oh, and they introduce new products year-round, in addition to seasonal specialties.

Obviously the store is doing something right if the crowds keep coming—and the customers aren’t particularly cranky after standing in such a long line. How do they do it, and what can the apartment industry learn about this brand?

1. The employees provide great customer service. If a particular product is missing from the shelves, the employees are more than willing to search for a replacement in the back—and they’ll come find you in line once they’ve found it. Additionally, they never gesture toward an aisle when you ask where a particular product is; rather, they’ll walk you over to whatever it is you are looking for.
2. They communicate. Even with tight layouts, they make sure shoppers know where the line begins and ends, and once shoppers reach the front of the line, they make sure that they are pointed in the right direction to the proper checkout line. Additionally, they have clear signage throughout the store talking about delivery times and prices.
3. They provide a taste of one of their products. Every day, an employee cooks up a sample of one of their products. It’s not only something shoppers look forward to, but it’s a great way to highlight a particular product, often one that’s either new or seasonal. Again, clear signage ensures shoppers know exactly how much the item costs—and they don’t even have to go back to the aisle to find it. The product is front and center in a freezer by the tasting station.
4. They let you off the hook if you don’t like something. Again, clear signage throughout the store lets shoppers know that if they try a product and don’t like it, they can bring it back.
5. They make the experience fun—or at least more fun than the typical grocery shopping experience. The signs are colorful, and the packaging often includes cutesy catchphrases. It also helps that the employees are generally smiling and friendly—and seem to actually enjoy what they do.

Of course, apartment hunting and living may seem nothing like shopping at Trader Joe’s, but that doesn’t mean multifamily companies can’t take a page from the store’s book. Obviously, customer service is key, but when was the last time your on-site management team went out of its way to find an answer for a resident—no matter how inconsequential it seemed? Yes, this probably seems pretty basic, but make sure your team is actually doing this; it makes a huge difference in customer satisfaction!

Communication—again, probably pretty obvious. Do your residents know exactly who to call if a problem arises? Does your on-site staff effectively inform your residents of upcoming maintenance work and/or events?

As for getting a taste for what you have to offer, this might be a little trickier, but use your imagination!  Is there a way for you to provide prospects with “a taste” of what being a renter at your community is truly like?

Okay, so number four seems even trickier; clearly an apartment lease isn’t something that can be returned, but how might the industry use this tactic similarly?

As for making the apartment-shopping experience fun, this one’s easy. Do something different that prospects will remember. Many companies already may have great ideas that work for them, and while you can’t just steal these ideas, they can certainly inspire you.

If you do all these things, perhaps you’re more likely to have lines out your door, like Trader Joe’s oftentimes does. And who doesn’t want that?

By Jeffrey A. Kohn, Esq.

You have probably heard the following frequently with regard to trying to successfully complete loan workouts of commercial real estate loans: “What the lender did just does not make any sense.”

This could be in the context of an offer to buy your own note from your lender or an offer to continue making loan payments, but at a reduced monthly amount. Depending on the status of the property, a loan workout could put the lender in a significantly better position than if the lender were to foreclose on the property. Yet, many times a lender declines to accept the borrower’s workout offer.

This article will cover only two of the reasons why commercial mortgage-backed securities (CMBS) lenders’ actions may not seem to make sense. In future articles, I will further explore loan workouts.

One reason is the complex structure of the CMBS loan and the web of responsibilities and obligations of the different decision makers who are responsible for the loan. The management of a CMBS loan is, generally, regulated by Pooling and Servicing Agreement (PSA), which outlines the many responsibilities and obligations of the entities that manage the loan on behalf of the owners of the loan.

The typical PSA structure is as follows. At the top of the management structure is the trustee. The trustee is ultimately responsible for all actions taken with regard to the loan. However, the trustee’s role is generally limited to a supervisory function. The day-to-day administration of the loan is handled by the master servicer. It is, however, the role of the special servicer that is key to any loan restructuring or discounted payoff. Although the master servicer is responsible for loan administration, the special servicer generally takes over from the master servicer when the loan is more than 60 days past due or some other loan default has occurred or is imminent. Usually, an employee of the special servicer is assigned to the particular loan and is responsible for that loan. It often takes some time and effort for the borrower to determine the specific employee of the special servicer who is responsible for their loan. And, often that employee is quite busy and stretched thin, so, once that employee is found, finding enough time to have a meaningful discussion with that person can be difficult. Also, generally, any agreement reached between the special servicer employee assigned to your loan and the borrower must be also approved by the special servicer’s credit committee. So, one reason that lenders do not always reach a solution that makes sense is due to management complexity and time constraints of the special servicer’s staff.

Another common reason that a CMBS lender may refuse to enter into an otherwise sensible loan workout or modification is that CMBS lenders are often restricted from taking certain actions to modify or restructure a loan based on constraints contained in the Real Estate Mortgage Investment Conduit rules. These rules generally prohibit a loan servicer from entering into a “material modification” of a loan prior to an event of default although there has arguably been a loosening of this restriction recently. So, if there has not yet been a missed loan payment or other event of default under the loan, then the CMBS lender may refuse to enter into a workout.

Jeffrey A. Kohn, Esq. specializes in real estate and business law. Mr. Kohn currently practices with Halling + Sokol LLP and previously practiced with Manatt, Phelps & Phillips LLP. He can be reached at (310) 277-2080 or jkohn@hallingsokol.com.

This article has been prepared for general informational purposes. It is not and should not be construed to be legal advice. Transmission of the information in this article is not intended to create, and receipt does not constitute, an attorney-client relationship. The information herein is not a substitute for obtaining legal advice from a qualified attorney licensed in your state. Pursuant to the rules of certain jurisdictions this article may contain or constitute attorney advertising.

If you’re like most property managers, your work day is stuck in the 20th century. Rent checks are collected through a metal drop box. Brochures sit idly by outside of your office. Your web site consists of one page with a phone number, e-mail address and a few photos. Enough paperwork is collecting in your office to create a fire hazard.

I want to point out six things that property managers can really master in the 21st century, thanks to the latest property management software systems.

Managing Leads to New Tenants

According to Apartment Internet Marketing, 46% of apartment prospects inquire about a property after normal 9 AM to 5 PM office hours.

How are you currently tracking these? Through e-mail? Scrolling through your Caller ID to check missed calls? Do you even know how effective your current advertising methods are?

Fortunately, many property management software applications will collect and organize your leads from all sources, even after you’re out of the office. Rent Manager is one company that is integrating marketing with it’s property management software.

A modern property management application can:

• Collect call information from prospects inquiring after hours
• Respond automatically via e-mail to internet prospects
• Track e-mail open rates so you can follow up with those who haven’t seen your response
• Broadcast e-mails to the leads you’ve collected but haven’t converted
• Log the source of leads to your web site (Craigslist.org, Apartments.com, etc)
• Track leads from offline sources through the use of specific phone numbers
• Integrate with your online advertising methods (pay-per-click, banners ads, etc.)

In our opinion, this is the wave of the future in property management software. With more and more people every day going to the internet to look for properties, integration of web services with your property management software will be the difference between surviving and thriving. Connecting with Your Tenants

Don’t be that property manager on ApartmentRatings.com whose tenants claim is never around.

Running your office on one of the leading property management software applications will allow you to:

• Generate e-mail blasts to your tenants and rental owners
• Create community forums to discuss important topics and feedback
• Manage online calendars of events and important dates

In short, your property management software becomes your communication hub between you, your tenants and your rental owners. There’s no need to combine three of four different, separate services that don’t talk to each other. Moreover, you’ll be present without having to knock on every door.

Automation of Regular Tasks

If the rent deadline has passed and a tenant has not paid their rent yet, what do you do?

Typically, you either call them on the phone or drop off a notice at their door. That’s too much manual effort. Your property management system should email them an alert or late rent notice immediately. No need for you to type, print, mail or deliver.

Property management software can even ease the pain during one of the most stressful times of the year – tax season. Buildium’s property management software will automatically generate 1099 tax forms for vendors and rental owners and even file them electronically to the IRS. All of this is done from within the software itself.

The advantages of automation are clear: more time to focus on more important tasks (like finding leads), fewer mistakes and an overall higher level of efficiency.

Others tasks that have been automated by property management software are:

• Rent increases
• CAM charges
• Preventative maintenance scheduling
• Lease expiration notices
• Tenant log in to view account details

Many of your automated notices to tenants can be emailed directly from the property management software or even sent to mobile phones.

Advertising with Popular Web Sites

Put yourself in the shoes of a prospective tenant. Where are you going to look first for a new apartment or home? More than likely, you’re going to start your search at Craigslist or another website.

Property management software company Appfolio integrates the ability to post listings to Craigslist directly into its software, making posting vacancies to the hugely popular web site that much easier.

Appfolio uses the information you’ve already entered and are managing about your properties and ports that information directly to Craigslist. No double entry and no time wasted managing your Craigslist account separately.

And it’s not just about making it easy to post to Craigslist. Appfolio allows you to design a custom template (pictured right) that makes your Craigslist posts stand out among the typical, text-only ads.

Building a Web Site that Integrates with Your Software

If you can count the number of pages on your web site on one hand, chances are it’s not doing much to help keep your occupancy rate high. You need more than a digital business card. What you need is a web site that appeals to prospects, tenants and property owners alike.

A good number of property management software systems out there give you the option to build a slick, fully functional web site that integrates directly with their software.

Property Ware and Rentec Direct are a few of the many property management software suites that give you this build-a-web-site option in addition to their other property management software services. They’ll build a fully customizable web site with all of the features you need.

Advantages of customizable property management web sites include:

• No coding or site maintenance is need on your part
• Installation is quick and painless
• They’ll manage your domain name
• Web site analytics built into the software
• Built in forms increase your lead generation
• All of this is integrated directly with the property management software

Instead of having one company handle your web site design and hosting and another handle your property management software needs, why not have one company do both?

Going Green

Eco-conscious tenants are increasingly concerned with the environmental footprint of their home, even if they are a tenant rather than an owner.

Here’s a list of ways that property management software helps property managers save energy and save paper:

• Storing documents digitally, resulting in fewer lost documents and less paper
• E-mailing renter’s statements at their request instead of printing out paper statements
• Scan renter’s checks and upload them electronically
• Web-based property management eliminates the in-house server, saving energy

Going green isn’t just about saving energy and trees. It also helps you increase your efficiency:

• Digital document storage cuts the time searching for documents dramatically when you can type in a search instead of rummaging through a massive file cabinet
• E-mailing out monthly statement’s is quite a bit quicker than printing, stuffing envelopes and making the rounds on your property dropping off statements
• Imagine eliminating those weekly, sometimes daily, trips to the bank when you can scan and uploading a renter’s check from your desk
• Web-based property management software virtually eliminates IT headaches (and time spent dealing with those headaches) because your software vendor hosts the software on their own servers

If you do take these energy saving measures and advertise them, you’ll attract more customers. And depending on the extent of the “greening” of your properties, you’ll be able to charge more in rent too.

What else does property management software help you do better? What things do you want your property management to take care of that it currently doesn’t?

(Chris Thorman is social media manager at Software Advice. He can be reached at 512-364-0118 or chris@softwareadvice.com)

With space at a premium, imagine a kitchen without boundaries or barriers, an environment free from conventional thought and restrictions, a kitchen created to successfully achieving the delicate balance between form and function reflect the needs and lifestyle of the modern homeowner. 

The new “kitchen matrix” allows for maximum usage of space with the focus on utilization and optimization of the interiors and exposed work areas, allowing the homeowner, apartment dweller or loft inhabitant to maximize the usage of the space at hand. Like the Roman God Janus, who could see the past and future at the same time, the modern kitchen is centered on the duality of purpose and space.

The new approach to kitchen design is to challenge the way we look at space, so we may better understand the problem. As designers, we must move away from a one-dimensional approach to kitchen design and began to think of the kitchen as a multi-dimensional canvas. The static, cluttered, restricted and unchanging kitchen of the past must now evolve into a living stage, a place where it is possible to create an environment that alters old beliefs about space and structure and infuse new concepts that reflect the needs of today’s modern homeowner.

Today’s kitchen has grown far from its primary function of food preparation to that of “the social center of the home”. In the modern kitchen, the family, both nuclear as well as tribal, still gathers to share, rejuvenate and commune together, but the walls have come down and this once hidden and secluded place is now part of a larger social arena. It serves as a meeting place, a dinning room, a home-office, a place to do homework; it can even serve as a hide away for quite reflection, as well as a place to gather for family fun and social entertaining.

The modern kitchen, in its new domestic role, finds itself reflecting a family lifestyle based on the sharing of traditional roles and functions. The living area embraces the kitchen as a multifunctional arena, were food is prepared, people talk, homework is finished and where family and friends sit by a modern hearth to bath in the warmth of community.

Today’s kitchen is open to the rest of the home, and as such, the kitchen now must function on several levels, from food preparation to social interaction, from entertainment center to living-room. More furniture, than cupboards, the modern kitchen must blend seamlessly into the living areas of the home,

(Kevin Henry is the Executive VP of Bazzeo LLC as well as a writer, speaker and environmental activist. He can be reached at kevin@bazzeo.com or you can read his blog at www.theessentialkitchen.blogspot.com)

You may have heard about LED lighting in the news recently. There are several cities around the country converting their street lights to be LED street lights. No more metal halide or high power sodium bulbs. As you would imagine these types of streetlights need to be quite powerful to light up the blacktop 25 feet below the pole. Sure enough they are bright!

So what about LED lights on your property in the common areas that you are paying the electricity on? Well such replacement bulbs exist and they make CFLs look bad.

There are two types of LED bulbs; high power and low power. You have most likely only seen low powered bulbs which hardware stores and Costco try and sell. The problem with low power bulbs is that they do not give off enough lumens, light. High powered bulbs do exist and are fantastic. Visit www.standard-led.com to view great options for your property.

You may be thinking that the high powered LED bulbs are too expensive. Not true, $40 to $60 each.
When you factor in the length of time your lights are on, the replacement cost of incandescent and CFLs, the cost of electricity, and the low wattage LEDs consume you will appreciate the power of LEDs. Look at this real example.

Dave F. of Los Angeles, CA, purchased 177 LED bulbs for the common area of this 125 unit complex in Orange, TX.

He replaced 65 watt incandescent bulbs with 6 watt LED bulbs. This measured a savings of over 90% on his utility bill for the portion dedicated to lighting. This positive changed saved Dave F. $37.18 PER BULB per year starting in year 1. At an 8% CAP rate Dave F. raised the value of his property by $82,261! ($37.18 X 177 =6,580.86 ÷ .08 = $82,261)

How much did it cost Dave F. to replace the bulbs? Answer: $9,549. With the energy savings that the 6 watt bulbs save, Dave F. will experience an ROI on the LED bulbs in 1 year 3 months and 25 days. This assumes that the common area lights are on for 11 hours a day. As the cost of electricity rises he will find his investment to have an even higher rate of return.

As an added benefit, high power LED lights last for  50,000 hours, so Dave’s maintenance staff does not have to purchase and replace bulbs for the next 12 years 5 months and 13 days.

Spending $9,549 to save $6,580 annually for the next 12+ years and raise the value of his property at an 8% cap rate to $82,261 is not just a good financial decision it is smart!

(Scott Yahraus is the president of Apartment Energy Consultants. Apartment Energy Consultants is the governing body that certifies multifamily properties as being “National Green Apartment Certified visit them at www.GreenRetrofitter.com