Volume 15, Issue 1 PRG Real Estate Spring 2014 Gluten Free No More, PRG Enters America’s Breadbasket As PRG continues to grow, so does our geographic reach. Traditionally focused in the south and southeast, PRG has chosen to enter America’s heartland, recognizing it’s limited multifamily housing supply coupled with long-term population and job growth. The Kansas City area’s growing economy is fueled by flourishing energy, manufacturing, technology and healthcare sectors. In the first quarter of 2014, PRG executed the next phase of our expansion strategy by acquiring the 320 unit Woodview Apartments in Kansas City, KS. Woodview is located minutes from Interstate 35, providing easy access to downtown Kansas City and numerous major employers. Another benefit is its proximity to Oklahoma Joe’s BBQ, an award-winning barbecue joint uniquely situated within a gas station. Our acquisition staff highly recommends the Hog Heaven Sandwich (pulled pork and sliced sausage on a bun). Built in 1988, Woodview provides a value-add opportunity as it undergoes an extensive $1,750,000 capital improvement program. Interior renovations will include new faux-granite countertops, brushed nickel plumbing and lighting fixtures, in addition to the installation of stainless steel appliances, wood-look vinyl flooring and two inch faux-wood blinds. Exterior enhancements will include the construction of a maintenance shop, the addition of a dog park, fitness center expansion, upgraded property lighting and new LED backlit signage. www.prgrealestate.com “Great Properties, Real News.” Kansas City is nationally recognized as one of the most economically diverse cities in the U.S. as no one sector comprises more than 15% of the overall economy. Leading employers include the global headquarters of Cerner, Sprint and H&R Block, as well as The University of Kansas Medical Center. In addition, Kansas City has a significant concentration of federal government offices that include the National Nuclear Security Administration, the IRS and the Federal Reserve Bank of Kansas City. Kansas City has also become a high tech hub driven by a highly educated workforce as well as Google’s state-of-the-art fiber network. A competitive city selection process led Google to choose Kansas City as the first location to deploy a fiber optic network capable of delivering connection speeds 100 times faster than current broadband and ultra-high definition digital cable. In fact, Woodview Apartments is now the first Google Fiber-active community in the Kansas City area. Be on the lookout for more Kansas City acquistions in the very near future! The Cornerstone
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Volume 15, Issue 1 PRG Real Estate Spring 2014
Gluten Free No More, PRG Enters America’s BreadbasketAs PRG continues to grow, so does our geographic reach. Traditionally focused in the south and southeast, PRG has chosen to enter America’s heartland, recognizing it’s limited multifamily housing supply coupled with long-term population and job growth. The Kansas City area’s growing economy is fueled by flourishing energy, manufacturing, technology and healthcare sectors. In the first quarter of 2014, PRG executed the next phase of our expansion strategy by acquiring the 320 unit Woodview Apartments in Kansas City, KS.
Woodview is located minutes from Interstate 35, providing easy access to downtown Kansas City and numerous major employers. Another benefit is its proximity to Oklahoma Joe’s BBQ, an award-winning barbecue joint uniquely situated within a gas station. Our acquisition staff highly recommends the Hog Heaven Sandwich (pulled pork and sliced sausage on a bun).
Built in 1988, Woodview provides a value-add opportunity as it undergoes an extensive $1,750,000 capital improvement program. Interior renovations will include new faux-granite countertops, brushed nickel plumbing and lighting fixtures, in addition to the installation of stainless steel appliances, wood-look vinyl flooring and two inch faux-wood blinds. Exterior enhancements will include the construction of a maintenance shop, the addition of a dog park, fitness center expansion, upgraded property lighting and new LED backlit signage.
www.prgrealestate.com
“Great Properties, Real News.”
Kansas City is nationally recognized as one of the most economically diverse cities in the U.S. as no one sector comprises more than 15% of the overall economy. Leading employers include the global headquarters of Cerner, Sprint and H&R Block, as well as The University of Kansas Medical Center. In addition, Kansas City has a significant concentration of federal government offices that include the National Nuclear Security Administration, the IRS and the Federal Reserve Bank of Kansas City. Kansas City has also become a high tech hub driven by a highly educated workforce as well as Google’s state-of-the-art fiber network. A competitive city selection process led Google to choose Kansas City as the first location to deploy a fiber optic network capable of delivering connection speeds 100 times faster than current broadband and ultra-high definition digital cable. In fact, Woodview Apartments is now the first Google Fiber-active community in the Kansas City area.
Be on the lookout for more Kansas City acquistions in the very near future!
The Cornerstone
The 2014 PRG Leadership Conference, formerly held in Chapel Hill, N.C., got a fun new feel in sunny Orlando, FL. A welcome break from the brutal winter at most of our properties, Orlando was literally a breath of fresh (and hot) air! Once arriving in Florida, managers were welcomed to the stunning Rosen Shingle Creek Resort, whose grandiosity was an exciting change from our beloved boutique, The Carolina Inn.
Our fearless wrangler and corporate Office Manager, Heather Martinelli, greeted arriving employees with the newest PRG swag (which gets better every year) and detailed agendas. The conference kicked off with a brief intro from our CEO, Sam Foster, which led right into the workshop sessions. Similar to conferences past, we broke into small groups for training and to discuss recurring challenges and new initiatives. New to the workshop agenda this year was an advanced financials class for seasoned managers and an interactive maintenance session full of hands-on tools for those managers who wanted to develop the next level of maintenance expertise.
Although the sunny change of scenery was enough to keep our crew happy, PRG threw another unexpected curveball by taking the team on a scavenger hunt through Universal Studios Islands of Adventure. A little spirited rivalry was a great way to make connections with other employees that rarely get the chance to meet, and everyone seemed to have a fantastic time- particularly those who won! Other conference highlights resonated throughout the field, most notably the hilarious performance by Kelsey Cantrell, Regional Director and Jonathon McClintock, Senior Property Manager as emcees of the awards banquet. Sara Silverman and Ricky Gervais should watch out!
The annual conference is always a great time to connect with cohorts throughout the company and to be reminded of what makes working for PRG so exceptional. This year’s conference was certainly the best to date, and there is no doubt that the 2015 conference will be even better. See you next year!
PRG shattered many records in 2013! One new record worth mentioning happened in the Collections Department. The numbers speak for themselves; collections increased by 110% from 2012 to 2013 with bad debt decreasing by 30%. Improved collections enabled PRG to add $500,000 to the bottom line increasing portfolio value by $6,500,000. The results are quite impressive for a department that was just started a little more than 12 months ago.
What does it take to double our collections results in one year? PRG’s Collections department’s success is due a streamlined process, persistent staff, state of the art software, and partnerships with leading collection agencies. Working from the corporate office, the collection department centralized the move-out process for past residents owing a balance. The communications include phone calls, emails and letters. PRG uses commercial grade software to track every account and utilitizes industry-leading skip tracing technology to locate residents who left without providing a forwarding address or updated contact information. Lastly, PRG partners with several regional collection agencies to assist with those hard to handle cases.
For 2014, PRG anticipates an increase of 15% over last year’s numbers, intending to break its own record yet again!
PRG Leadership Conference 2014
Makin’ It Rain...Cashing in with Collections
July
1. Huntington at Sundance 0.15% 2. Lake Johnson Mews 0.34% 3. Sawgrass 0.54%
August
1. Cascades 0.00% 2. Governor’s Ridge 0.08% 3. Lake Johnson Mews 0.09%
September
1. Lake Johnson Mews 0.02% 2. Governor’s Ridge 0.06% 3. Huntington at Sundance 0.31%
October
1. Lake Johnson Mews 0.02% 2. Governor’s Ridge 0.05% 3. Villages of Banyan Grove 0.18%
November
1. Governor’s Ridge 0.04% 2. Hampton Chase 0.07% 3. Saddlebrook at Tates Creek 0.29%
December
1. Huntington at Sundance 0.13% 2. Chinoe Creek 0.14% 3. Hyde Park 0.27%
January
1. Tate’s Creek Village 0.38% 2. Coquina Bay 0.39% 3. Sawgrass and San Pablo 0.55%
February
1. Tate’s Creek Village 0.18% 2. Woodview 0.32% 3. Magnolia 0.46%
March
1. Lake Johnson Mews 0.08% 2. Chinoe Creek 0.16% 3. Cary Pines 0.33%
Titanium Tool BeltTop Gun Collections
The Titanium Toolbelt award goes to properties that have no work orders older than 5 days and end the
month with no open work orders.
3rd Quarter 2013
Cary PinesCoquina Bay
Hampton ChaseHyde Park
4th Quarter 2013
Altamonte VillasBainbridge in the Park
Palms at Altamonte VillasCarolina Woods
SawgrassAltamonte Villas
Cary PinesCountry Club
1st Quarter 2014
Altamonte VillasBainbridge in the Park
Carolina WoodsCary Pines
Country ClubChanticleer
Glendare ParkHuntington at Sundance
Hyde ParkLake Johnson Mews
Linkhorn BayMagnolia
Palmetto PlaceSan PabloSawgrass
South SquareSummerville
Tate’s Creek VillageThe Palms at Altamonte Springs
Tiffany SquareWillow RidgeWoodcreek
The Razzle Dazzle Award is calculated based on the number of approved applications per total unit count.
July
1. Matt Morrison Honeytree 82. Christine Guimaraes Country Club 73. Robbin Bailey Lakecrest 15
August
1. James Thompson Hyde Park 192. Meghan Borkowski Lakecrest 163. Ashley Guy Corners 11
September 1. Raynae Rojas Governor’s Ridge 92. Anna Wyatt Bavaria 183. Ashley Van Diemen Cary Pines 10
October
1. Vera Sherrod Hilton Village 152. Jonathan Douglas Hampton Chase 143. Michelle Rose (TIE) Corners 103. Ashley Carroll (TIE) Lancaster Green 20
November
1. Sandra Miller Country Club 82. Michelle Smith Magnolia 73. Michelle Rose Corners 12
December
1. Vera Sherrod Hilton Village 92. Amanda Kelly Woodcreek 113. Matt Morrison Park Ridge 14
January
1. Michelle Rose Corners 222. Lauren Hammaker Tiffany Square 153. Vera Sherrod Hilton Village 13
February
1. Vera Sherrod Hilton Village 152. Robbin Bailey Lakecrest 203. Lauren Hammaker Tiffany Square 14
The winner of the Show Me the Money award for the third quarter of 2013 is Magnolia Townhomes! The 98-unit property in Spartanburg, SC is managed by Michelle Smith, while maintenance was headed by David Strain. The team was able to exceed budgeted net operating income by 25.6%!
Bavaria Apartments in Nashville, TN beat their budgeted NOI by 24.7% thanks to the hard working team of manager Karla Baumgartner and maintenance supervisor Ignacio Contreras. Karla and Ignacio’s team just edged out Giselle Santiago and Adam James at Cary Pines in Cary, NC who beat their budgeted NOI by 24.1%
4th Quarter 2013
Congratulations to The Corners in Spartanburg, SC for winning the Show Me the Money award for the fourth quarter of 2013! The 176-unit property is managed by Ashley Guy and the maintenance is overseen by George Blackmon. George and Ashley guided the property to a 20.3% positive variance to their budget. Great work guys!
There must be something in the water in Spartanburg because right down the street from The Corners, 98-unit Magnolia Townhomes better their budgeted NOI by 18.6%! Congratulations to manager Michelle Smith and maintenance team of David Strain and Raymond Batey!
For the second quarter in a row Cary Pines in Cary, NC finished with the third highest variance to budgeted NOI. Giselle Santiago and maintenance supervisor Adam James lead their property to a 16.2% positive variance. Great work!
1st Quarter 2014
In the first quarter of this year, Carolina Woods of Winston-Salem, NC wins the Show Me the Money award. Boasting a 15.7% variance to budgeted NOI, manager Jason Fulp and maintenance supervisor Chris Blevins have a lot to show for their hard work!
For the third consecutive quarter, a Spartanburg, SC property has made it into the top three. Congratulations once again to The Corners for their 14.8% variance to budgeted NOI!
Nashville’s Hampton Chase grabs the third spot with a 14.1% variance this quarter. Congratulations to the team over in Tennessee!
What’s the most effective way to make a Raving Fan out of one of your residents? Take a major roof leak and resolve the issue quickly and completely. Our resident, Theresa, said “I am writing to say you all are amazing! I came home from work yesterday to a completely fixed ceiling… there was no water on the ceiling or anywhere else!!! Thanks so much for your patience with me too. I really am very agreeable and friendly, it just seems like several negative things came together at the same time for me in the past few weeks, and the leaking roof just made me most irritable.” Way to go Bainbridge in the Park!
Durham, NC is a haven of happy residents. Patricia, a resident at Park Ridge writes “I moved into Park Ridge in July, 2013…We are very happy here in the community. We have had a few issues that were quickly addressed and fixed. Your staff is always helpful and pleasant and I really feel they go out of theirway to assist me. They handle things in a very professional manner and keep you informed along the way. I know with all these apartments it must be overwhelming sometimes and difficult to deal with so many people. I wanted you to know personally how I feel about them. Kudos to them!!” Indeed, Kudos to Park Ridge!
Faster than a leaky faucet! More powerful than a clogged toilet! Able to solve multiple maintenance crises without breaking a sweat (except in the mid-summer Florida heat!) No, it’s not Superman, it’s Omar Sosa, Maintenance Supervisor at The Palms and Altamonte Villas. Omar joined PRG in August 2013 and wasted no time in making a name for himself amongst the residents of two of our Florida communities. Omar recognized the strengths of each of the maintenance employees and motivated his staff to become the phenomenal team they are today. They live by the motto “S.O.S.” Service is Our Specialty. Whether it be fixing a leaky tub at midnight or helping with an electrical issue, Omar goes above and beyond to address each resident’s concern. Thanks for being our Man of Steel!
When one evaluates a company to purchase, take over, or restructure it is often because senior management has become inept. Brothers-in-law on the board of directors, vice presidents with odd titles, e.g. “Vice President of Innovation”, and processes that haven’t been updated since the CEO graduated from business school thirty years ago. The result of such phenomena are slow but steady declines in morale, operating performance, and overall profitability. In fact, one of my favorite past times is shorting stocks where members of the board are related to officers of the company, have been in their positions since the Stone Age, and/or have a degree in Communications from the Chairman’s alma mater. 9 times of out of 10, you will make money on such trades. I can recommend a few underperforming multifamily REITs if you’re in the mood.
How do companies like PRG keep from falling into mediocrity? The key is not to let ideas or processes become sacred cows. For however smart we think we are, there is always a method to make a process more efficient. Do not let your ego get the best of you if someone presents a better way. Often times that “better idea” comes from a recently hired college grad or someone several steps removed from the C-suite. It shouldn’t matter to effective senior management where the idea comes from.
One must also be willing to adapt to the times and implement new technology should it prove fruitful. There will undoubtedly be pushback at all levels, as personnel, especially those who have been in their positions for some time (including leadership), are naturally resistant to change. One must explain the value of implementing a new process, get buy-in from stakeholders, and in the end, people will come to embrace it, especially if they have seen the results of effective change in the past.
At PRG, our effective changes have led to 5%+ year over year NOI growth (for the 2nd year in a row), rents rising almost twice as fast as inflation, with employee and resident turnover at all-time lows. These results emanate from ideas of old and new hires alike and from all levels of management. Such a mindset is now ingrained in our culture, solidifying the potential for these gains to continue keeping in mind that at PRG a better way is the best way.
Where are two of the five fastest growing cities in the US over the decade located? North Carolina! With Raleigh #1 and Charlotte #5, PRG’s largest concentration of properties happens to be directly in the epicenter of this boom. PRG is pleased to announce the acquisition of Clarion Crossing Apartments in Raleigh, NC on April 8, 2014. Now with 10 properties and 2,592 units in North Carolina, PRG is creating a substantial footprint in the Tar Heel state.
Clarion is a 260-unit garden-style community located less than one half mile from NC State, the largest university in North Carolina and home to 35,000 students and 8,000 full time employees. The property also sits directly on the bus route to campus, positioning it perfectly to cater to both students and staff wishing to live near the university. Note, PRG currently owns the money-printing Lake Johnson Mews located ¼ mile from Clarion Crossing.
Built in 1972, Clarion Crossing will undergo a $1,300,000 interior and exterior capital project. Interior renovations will include re-facing cabinets, new faux-granite countertops, brushed nickel plumbing and lighting fixtures, stainless steel appliances, full size washer/dryers and wood-look vinyl flooring. Exterior projects include replacing all the roofs, asphalt resurfacing and renovating the fitness center.
The Triangle’s history of diverse employment sectors including technology, medical R&D, academia and government continue to ex-hibit long-term sustainable growth, while Raleigh-Durham remains one of the strongest housing markets in the country. As more luxury product continues to be delivered, the rent gap with B-class product continues to expand presenting value-add opportunities for well-located in-fill communities such as Clarion Crossing. PRG continues to pursue these opportunities, and is thrilled to welcome another new addition to the portfolio.
