The subject property was built in 2010 as a “by the bed” student property in an extremely saturated market. The property was located further from the campus than all of the competitors, which in turn led to a lack of qualified student traffic. A majority of the prospects that toured the property were looking for a price point well below the asking rents for the community. Additionally, the onsite management company had changed twice since the property opened, and there were no experienced leasing individuals on staff. The management turnover had led to neglected maintenance and a growing reputation problem.
On July 29th 2012, the property was 73% preleased with an average rent of $850/bed. The property had leased 8 beds in the previous 60 days.
1. Lower the asking rents of the property or increase the concessions
2. Hire a new leasing staff
3. Hire CLASS to accelerate the lease-up
The owners chose to hire CLASS in order to avoid lowering their rents and risking potential complications when procuring their permanent financing. The owners also wanted to mitigate the risk of a bad hire.
CLASS recognized that the property needed to improve its marketing effort in order to target qualified renters. Additionally, a strong closer was needed to capitalize on any traffic created. Even if prospects were coming in the door, the property was still priced at the same level as the competitors that were amenity rich and located closer to campus. There had also been very little done in the form of follow-up with previous prospects as well as with the tracking of marketing sources that were leading to qualified traffic.
CLASS implemented the following changes to the leasing and marketing platform:
1. In order to create a sense of urgency, CLASS limited the units being offered to only two apartments CLASS also setup mini models in the apartments being shown to provide for a more appealing visual.
2. CLASS streamlined the leasing process and was able to train these CA’s on the proper techniques of phone calls, the product demonstration, closing strategies and follow-up. Applications were soon being approved quicker and move-ins were scheduled more efficiently resulting in a huge drop-off in cancellations and unhappy future residents.
3. Reduced extraneous funds being spent on marketing. The property had been spending anywhere between $10-15K on marketing each month with no form of tracking to determine ROI. CLASS was able to track the marketing over the course of the 60 days and determine multiple areas where funds were being incorrectly allocated. This saved the property thousands of dollars each month and allowed them to focus their marketing budget on the sources generating leases.
4. Eliminated specials from all marketing material and refused to give them out prior to the closing table. CLASS was then able to leverage any specials at the closing table to secure the lease.
5. Increased outreach marketing. CLASS implemented a diligent approach to targeting the campus as well as all surrounding businesses in order for the property’s information to be visible to as many potential prospects as possible. These marketing connections were then used to assist with resident retention by providing residents and new leases with free pizza, gym passes, t-shirts and gift cards.
By implementing these strategies, CLASS was able to increase the traffic and significantly increase the number of leases. Over the next 60 days, CLASS leased over 59 apartments, got the occupancy to 90% from 73% and reduced the fall off to below 25%.
TRAFFIC TOTALS FOR DATES 2012-07-30 TO 2012-09-28
|Phone Calls||Walk-Ins from Phone Calls||Conversion Ratio|
|Walk-Ins||Qualified Walk-Ins||Leases||Closing Ratio|
RENT REVENUE PER MONTH WITH VS. WITHOUT CLASS per $1,000.00 (click to enlarge)
*assuming property continued the current unit absorption rate
COST OF CLASS VS INCREASE IN ANNUAL RENT REVENUE (click to enlarge)
*The increase in leasing activity resulted in 47 additional move-ins. Annual rent revenue generated by these additional move-ins = $479,000.00
*Total cost of CLASS Service = $45,020.00