For the last year, CRE professionals have closely watched the overall economy and the commercial real estate market to monitor the effects of the pandemic. We’ve discussed the value of knowing your tenant, how the industrial market has largely remained strong and how to handle rent concessions and deferrals. One concept that has flown under the radar is the percentage rent model. Percentage rent is simply the process of applying a percentage rate, above a monthly base rent, based on the monthly income of a tenant. According to Peter Morris, principal at Greenstead Consulting Group, “this royalty is paid to the landlord to entice the landlord to consistently improve their property for more traffic flow, better co-tenancy, etc.” Morris appeared on a recent ICSC webinar to address the percentage rent model and its effectiveness in today’s market. “Percentage rent has no offsetting costs,” Morris added. He believes this is a tool that can be used effectively by both landlords and tenants. “If you can’t give all of one thing, you can offer the rest in percentage rent and negotiate it all the way down to zero,” he said. One of the keys, however, is to introduce the model at the beginning of negotiations. Because landlords are highly focused on certainty, “percentage rent is a tool that should be in every lease,” as Ivy Z. Greaner, COO at Bedrock Detroit, explained. Now, due to the Covid-19 pandemic, “landlords should implement percentage rent as the place to alleviate for all retail tenants,” she added. The general consensus is that this model does not get used often enough. Typically, in retail leases, 7% on every dollar is industry standard when gross sales reach an agreed-upon amount known as the breakpoint. However, tenants may choose to offer a higher percentage, in exchange for lower base rent or lease renewal right, if they believe their income may not rise quickly. When it comes to financing a property, percentage rent could play a role as well. “Because percentage rent is fluid and a retailer isn’t obligated to pay it, lenders don’t necessarily underwrite on it, but it does give them confidence,” Greaner said. Lenders can tie it into longevity at a site versus the odds a retailer would leave elsewhere, but the panelists agreed overall it wouldn’t move the needle on the cap rate or on the determining factors whether to make a deal. As a landlord relying heavily on percentage rent, Morris suggested looking at the market rent versus the base rent you are achieving, which will help you get a deal or justify the financing needed for another property. It may not be a driving factor in negotiations with a lender, but it could be a smart add-on to conversations. Gavin Farnam, president of retail services at Madison Marquette, said that his company has actually used COVID-19 restrictions as a driver for new deals that previously would not have been as desirable as they are now, such as open-air restaurants or gathering spaces.  He said their company is doing lower base rent with increased percentage rent to incentivize business owners to create cool, trendy establishments where there is community demand. While offering percentage rent is not feasible or advisable in all instances, Morris says he uses this tool often. “In my history of doing leasing for landlords and tenants, I mention it right off the top in a quid pro quo basis in order to get a deal done,” he said. Airport retail is almost exclusively a percentage rent business. While the actual hangar space and other tenancy in the airport is traditional rent, retail establishments are driven by percentage rent and are typically very profitable due to upcharged goods (for example, $20 for a breakfast that would be $10 elsewhere). There are several factors to take into consideration, such as a user’s occupancy cost and gross margins, when negotiating percentage rent. “We...

Do you want to excel in marketing and optimize your multifamily property performance? Of course, you do. With a little (free) help from the experts, reaching both goals is simpler than you may think. Multi-Housing News Marketing Resources Multi-Housing News (MHN) is a digital magazine that provides leaders in the multifamily housing industry with the most current news, information and analysis. Its content helps decision makers run their businesses more efficiently and profitably. The ongoing ascent of online marketing highlights a need for insightful, practical and timely marketing content. This spring, we proudly introduce Multifamily Marketing Resources, a user-friendly repository of content to help get the right eyes on your property. Explore articles, videos, reports and more to help you get the most out of your marketing spend. What online marketing tips and tricks can you learn on MHN? MHN publishes daily, which means that you get the freshest insights to help you stay ahead of the marketing game. Get an array of timely tips and hacks to make marketing easier. Below is just a sneak peek at what you can find. Is your website working for you? Your website is no longer just a first impression. It may be your only chance to stand out from the competition. Prospects use websites and their online tours to narrow down potential properties. “There has been a fundamental shift from the website as a marketing channel to the website as part of the tour,” said Esther Bonardi, vice president of corporate & multifamily marketing at RentCafe and Yardi. “Today, leasing activity starts earlier and it starts on the website. I don’t think this is a passing fad just related to the pandemic,” Bonardi added. “I think these behaviors will stick, especially as we see new Gen Z renters coming into the renter marketplace. Their shopping behaviors were shaped right now at this moment in time. But even for the rest of us, I think the pandemic has gone on long enough that it has reshaped customer behavior.” Read Attracting and Converting Potential Renters with Your Website to learn how you can transform your website into a more powerful marketing tool. Create email subject lines that won’t be ignored Every email that you send is battling against dozens of competitors in your prospects’ inbox. The time and creativity that you put into your email won’t fulfill their potential if the email goes unread and deleted. To improve your open and click through rates, there are five main things to consider. These three are a great place to start: Prompt people’s curiosity: Make them want to click to see what’s inside the email. Is it an offer? A new resident service or amenity?Make sure the email is formatted well: Create subject lines that are 60 characters or fewer with the important words near the front of the subject line.Avoid clickbait-y phrases: Be compelling and transparent. Don’t say they’ve won something if they haven’t or create a false sense of urgency. Read Email Subject Lines That Work in Apartment Marketing for additional ways to get your emails opened, read and engaging readers. More marketing goodness to explore on MHN The field of online marketing constant evolves. Best practices, new techniques and trends can be a lot for small teams to manage. Fortunately, the team at MHN makes it easy for you to stay abreast of the latest in multifamily marketing. Get marketing goodness sent directly to your inbox. Simply subscribe to the monthly digital...

Back in 1946, we were on to something. The American Standards Association, now the American National Standards Institute, issued guidelines for healthy buildings. Among the standards stood a novel concept: occupied rooms should have access to fresh air. It seems like common sense now, but it’s not common practice today. That standard was all but forgotten by 1981 and the repercussions haunt us through the pandemic. Fortunately, a new class of experts highlights the benefits of healthy buildings as a way to promote public health and improve asset value. Introducing Joseph Allen, breathing new life (and science) into old ideas Joseph G. Allen is an assistant professor at the Harvard T.H. Chan School of Public Health. He is also the faculty advisor to the Harvard Healthier Building Materials Academy. During NMHC OPTECH 2020, Allen lead the session “Clean is the New Green.” He guided participants through the numerous ways in which buildings can prevent the spread of germs, promote health and yield higher returns for investors in the process. His session brought participants back to December 2019. Allen and his peers wrote an article on the importance of healthy buildings research to advance health. SARS and other epidemics inspired the paper, but they had no idea how close they were to the brink of a pandemic. “We had narrow misses in the past, influenza epidemics that were nearly pandemics. We knew that we were overdue, and we knew that buildings would play a role,” says Allen. Less than a month later, COVID-19 hit the U.S. By the end of the season, the pandemic had the globe in its grips. Allen and his team worked tirelessly to educate the public on the role that enclosed spaces play in the transmission and prevention of disease.  “We have to understand first how we are exposed, and then we can simply line up the corresponding control strategies, like higher ventilation, better filtration and use of masks,” says Allen. Controlling exposure points begins with the air The potential for close contact transmission, contaminated surfaces and airborne transmission must all be addressed in healthy buildings. Airborne transmission is the trickiest to manage. Smaller airborne particles can linger in the air for 30 minutes. They can travel beyond six feet with studies showing “viable virus as far as 16 feet,” reports Allen. Creating a healthy interior space requires more than social distancing. “In each outbreak, people were indoors with no masks and low to no ventilation. This is so important because airborne transmission is what drives super spreader events,” explains Allen. “A study published just last year found that ensuring even minimum levels of outdoor air ventilation reduced influenza transmission as much as having 50 % to 60 % of the people in a building vaccinated,” says Allen. Buildings can help to reduce the spread of disease through intentional ventilation and filtration techniques. Builders and managers acknowledged this fundamental truth in the late 1940s. By the early 1980s, however, efforts to reduce energy consumption lead to poorer indoor air quality. “We’ve lost our way over time,” explains Allen. “We’ve placed the emphasis only on energy. As a result, we are here in the sick building era where buildings can’t respond to the crisis at hand. They can’t bring in outdoor air.” Allen advises building managers to bring in as much outdoor air as they can to dilute airborne viral particles. It’s often as simple as opening the dampers. Recirculated air should be filtered by a MERV13 or higher filter. Such filters capture at least 80% of viral particles. If managers cannot reach those standards, Allen recommends the use of portable air cleaners with HEPA filters, which capture 99.97 percent of particles. Building building resiliency Americans spend 90% of our time indoors. Curiously, funding in the health industry often goes towards research regarding exercise, nutrition and the impact of external pollutants such as cigarettes and smog. Allen explores the...

Want to build renter loyalty, earn referrals and celebrate your awesome residents at the same time? We’ve got three great ways to support stronger net operating income (NOI) by celebrating your residents. Happy residents will save you time and money Summer heralds warm weather, group gatherings and celebrations. These events are a natural way to promote engagement amongst residents and staff. Such engagement builds a sense of community, an important part of nurturing resident loyalty and referrals. Resident retention is essential to stronger NOI. Per the National Apartment Association, it costs anywhere from $1,000 to $5,000 to turn a unit. If a community could reduce turnover by just one per month, they could save $20,000 in annual expenses and about 96 hours of maintenance labor. Referrals also play a strong role in improved NOI. Happy residents will refer their neighbors, which cuts your marketing spend. Per Harvard Business Review, it costs a business about 5-25x more to acquire a new customer than it does to sell to an existing one. One way to cut costs at your property is to invest in events that enrich resident engagement and satisfaction. Black History Month (February), Women’s History Month (March), Asian Pacific American Heritage Month (May) and several designated heritage days offer opportunities to celebrate your residents. Foster a sense of belonging and resident satisfaction with the fun ideas below! Amplify voices When we feel seen and heard, we feel welcomed. Consider opportunities that empower residents to use their voices and share their stories. Use your resident app to share short stories. When your locality permits, host performances of resident-written skits and poetry. Celebrate unique cultures through the arts Create events around food, music and other arts to unite the community in the celebration. Food brings people together. Considering an event catered by locally owned and ethnically diverse restaurants. During social distancing, you could also encourage residents to share recipes. It’s a fun and approachable way to explore cultures with all of our senses! Music, whether lyrical or instrumental, tells the stories of our unique journeys in relatable ways. Consider creating and sharing playlists of artists from the featured cultural group. (Apple Music does this if you need inspiration.) You can also integrate the music during group classes such as yoga or spin. Allow students to explore the theme of the class when booking through your property concierge. Visual arts are perhaps the easiest way to celebrate cultural groups while implementing social distancing. Participants can share photos of their art, crafts and heirlooms and tag your property on social media. Artists may also display prints of their work in the community center or in a temporary, outdoor gallery. The possibilities are endless! Mindful messaging Celebrating an unfamiliar heritage can be daunting. What you say, how and when you say it could make or break an engagement initiative. In addition to amplifying diverse voices, you may consider learning the basics of social media messaging for organizations. The National Institute for Social Media has resources on social listening, crisis management and messaging. There are basic toolkits to help you craft effective messaging on solidarity and inclusion. By celebrating and engaging residents, you support the sense of community that leads to retention and referrals. Join a webinar to learn how you can promote resident engagement with simple, online...

Yardi is pleased to join LeadingAge in recognizing Older Americans Month (OAM) — a time to celebrate the contributions of seniors across the nation. And given the challenges older adults have faced in the last year, OAM is an exceptional opportunity to highlight their resilience, strength and personal experiences. For LeadingAge — an association that represents more than 5,000 nonprofit aging services providers — it’s also a time to advocate for support of aging services care infrastructure. The importance of OAM During the month of May, the Administration for Community Living (ACL) leads the nation’s observance to recognize the contributions of older Americans. While LeadingAge supports OAM every year, this year’s observance is particularly important. In light of the difficulties seniors have endured throughout the pandemic, ACL’s theme for 2021 is “Communities of Strength.” In turn, LeadingAge has emphasized the importance of advocating for older Americans during this time — as the country debates the value of supporting national care infrastructure. “Now, as our nation emerges from the COVID-19 pandemic, we’re at a critical time — the most important moment in a generation for our country to renew and revitalize how we support older Americans and their families as millions of us live longer,” wrote LeadingAge. The association also expressed their ongoing effort to combat misperceptions in senior living. Along with advocacy during OAM, LeadingAge continuously aims to showcase the rich and diverse life experiences happening within aging services.   Yardi in senior living For over two decades, the Yardi Senior Living Suite has supported senior living operators, caregivers, residents and families. It eliminates the gap between property management and clinical services by uniting property management, finance, marketing, business intelligence and resident care on a single platform. Yardi joins LeadingAge in recognizing the value of seniors during Older Americans Month, as well as year-round. Read more about LeadingAge’s efforts during...

The skills learned at Yardi can better prepare team members for challenging roles outside of the office. Jacqueline McGuan has used her leadership skills to help transform the lives of women and children impacted by human trafficking. She is part of an ongoing effort to eradicate human trafficking in Santa Barbara county through awareness, education and advocacy.  Working with Yardi On weekdays, McGuan is a marketing specialist on the RentCafe Reach team. “We work with RENTCafé clients to provide them with SEO (search engine optimization), PPC (pay per click advertising), social media or reputation management services,” she explains. It’s a role that hones her leadership skills and her ability to quickly adapt to change. “Keeping up with all of the changes at Google is one of our biggest challenges,” says McGuan. “Google updates their algorithm almost daily, so staying on top of best practices is basically a job in itself.” But the hard work pays off when McGuan and her team forge strong relationships with clients and help them execute successful digital marketing campaigns. “It’s the best feeling to see clients succeed,” she says. “Yardi is such a friendly and collaborative workplace with team members who are dedicated to client success.” That dedicated spirit is part of why McGuan enjoys being a leader at Yardi. “I was looking for an opportunity to work on a team with hardworking, motivated individuals. I found that on the Reach team. We all have our separate clients but as a team we work together in such a cohesive way. We’re all constantly learning from each other and really growing as digital marketing professionals.” Jacqueline McGuan Junior League of Santa Barbara: Awareness, education and advocacy Outside of her work, McGuan values dedication and collaboration as well. Nearly six years ago, she discovered Junior League of Santa Barbara (JLSB). The women’s organization improves the lives of at-risk women by educating and empowering them to reach their full potential. McGuan appreciated how the organization unites diverse volunteers who want to dedicate themselves to serving vulnerable populations. “In the same way I found a dedicated, collaborative team at Yardi, I’ve found that community within the JLSB that hits those same notes. I’m truly grateful for the JLSB for connecting me with a community of like-minded women, all who value voluntarism and work to improve their Santa Barbara community,” says McGuan. “Through Junior League, I’ve learned important lessons about balancing my time, but also stepping out of my comfort zone to take on more responsibilities at work and in the JLSB,” reflects McGuan. “From a technical standpoint, I’ve been able to step into leadership roles with the JLSB that have helped me develop communication and organizational skills that enable me to work successfully with Yardi clients.” As a leader, McGuan has flourished. She served as chair on the recruitment and communications committees and recently as a member of the Board of Directors. During that time, McGuan spearheaded the opening of S.A.F.E. House Santa Barbara, the county’s first therapeutic rehabilitative shelter for children who are survivors of commercial sexual exploitation. She also assisted preventative programs such as TraffickSTOP, a community awareness campaign designed to help people recognize the signs of trafficking and how to properly support victims. Additionally, there are the annual Community Assistance Funds for local non-profits that improve the lives of at-risk children, youth and families in Santa Barbara. “As a League, we fundraise every year to make projects like these possible. Our major fundraising campaigns are our annual Rummage Sale and Spring Gala. Our new Raffle is coming up in May and it is a huge success with wine lovers,” says McGuan. The funds raised assist survivors of trafficking once they integrate back into their communities. McGuan recalls creating Fresh Start Bags for the Human Trafficking Task Force at the Santa Barbara District Attorneys’ office. The bags were filled with donated clothes, toiletries, snacks and other...

Surprise! Google is changing its match types again. This is the fifth time that Google has changed match types. And as we all know, algorithms are constantly evolving as well. We’re here to help you out with a quick overview of what’s changed, how it might help, and who benefits most. So long and goodbye beloved match type! The Google Ads that we all know and love have four match types. From least to most restrictive they are broad, modified broad, phrase and exact. In 2010, Google introduced modified broad. It accounted for misspellings, different tenses, and keywords presented in different order. It bridged the gap between the array of relevant queries that searchers submitted and who marketers intended to reach. In 2014, broad match improved so that the structure of the keyword mattered less. Searchers would submit queries with or without necessary hyphens and spaces. “3 bedroom garden style apartments in Philly” and “3 bedroom garden-style apartments in Philadelphia” would behave the same. Marketers were in love. Broad match became one of the most popular and successful match types alongside phrase. It offered flexibility, versatility and ease of use. Now we’re saying goodbye. What’s changed as of Feb 2021? Modified broad match type is being eliminated in July 2021. You won’t be able to add any keywords to this match type. Phrase match is incorporating behaviors of modified broad. In doing so, Google aims to simplify keyword usages and make it easier to find more relevant customers. Moving forward, both match types will have the same matching behaviors to the same traffic. This change isn’t entirely surprising. A lot of specialists have noticed that the lines between the two match types have been blurring for about a year now. What we wonder, though, is how Google will take into account when keyword order is necessary. Someone searching for “units converted from factory to lofts in Minneapolis” will not be equally as interested in “units converted from lofts to a factory.” That would make for confusing and uncomfortable living conditions. Google reports that this will be taken into account, but not much detail is given. Why is Google changing its match types and what are the advantages? Per Google, The Rule of Close Variance and other factors make it so that there is no need to have two distinct types. The algorithm has gotten smarter and “learned” to decipher what advertisers and searchers intend when using modified broad and phrase match types. You may feel that’s a lot of trust to put into artificial intelligence. It is. But less hands-on engagement with match types can free up marketers to other creative tasks that are not so easily automated. There is also greater potential for traffic. More traffic could be good. The PPC community has mixed feelings about these changes. That’s okay. Is the PPC advertising community pleased to see the merging of the match types? Feedback varies. In an interview on the topic, PPC expert Mark Irvine states that each change to keyword match types brings “a lot of unpredictability to advertisers” and “may not lead to more [desirable] traffic.” Advertisers will have to re-work their strategies without the guarantee that they’re gaining efficacy in marketing. The boost in volume without greater specificity means that there is a small risk of getting more irrelevant traffic. This could also mean increased spend without increased conversions. Irvine notes that only accounts that get more traffic from phrase match keywords should expect an increase in their ad impressions, clicks, costs and conversions. Conversely, ads from modified broad match keywords and other match types will see a decrease in engagement or no change. Marketing expert Brett McHale adds that the recent change “blurs the lines between match types” and strongarms advertising into relying on Google’s recommendations. “The change to phrase match and phasing out of modified broad match appears to me to be...

In the last year, we’ve witnessed accelerated implementation of web-based property management software, automated services and paperless transactions. We now know technology is here to stay and more businesses will continue to leverage technology to help improve efficiency and continuity throughout the organization. In the Canadian real estate industry, this uptake in tech is particularly true in procurement and payment processing. If you are looking for a solution to take your organization to the next level of efficiency, an end-to-end procurement to payment software should be on your vendor list. Unlock potential value Christine Williams, vice president of national operations and administration for QuadReal Property Group, is one of many Yardi clients that are leveraging paperless solutions. “Our internal initiative is to always stay current with technology and processes. We want to empower our staff to get the job done in the fastest, most efficient and the most accurate way.” Getting invoices on the desk and scanning them is a new safety concern, as well as an inconvenient task that takes many hours from staff schedules. Rather than handling high-quality tasks, your staff is stuck sifting through stacks of paper. This is when you need a solution like a third party digital invoice services to take the burden from your team to off-site specialists who can scan and key your invoices. By outsourcing this work you free up time for your team while leadership maintains control of all invoice approvals. Cheque writing is another drain on your staff’s time and in-office hours. Paper cheques require printing, signing, postage fees and can cause potential delays. Implementing an electronic payment platform permits efficient vendor payments and data. Offering a truly paperless invoice process is key for ensuring successful business continuity.  Williams says, “Historically, manual management processes have proven to be inefficient. We are big on automating workflows at QuadReal. Wherever we can put a user access control in place from a system perspective, we would rather have someone push an approve button than a piece of paper.” Simplify vendor management Maintaining open lines of communication with your vendors is important but staff can find themselves fielding dozens of calls and emails each day. A  self-service online portal for vendors enables vendors to submit invoices, check payment statuses, manage POs and work orders when they are off or onsite. When vendors can manage their own accounts, there is less downstream burden for your staff. Williams continues, “If there is a vendor that is going to integrate ordering to purchase orders to invoice submissions and payments, they understand the market’s needs. Having that functionality takes multiple steps out of our process, making it easier for all stakeholders.” Gain control of MRO spend With the recent increase in tech adoption, some businesses are seeing a disparate supplier base across their organization leading to errors, inconsistencies and cost variables. Without a streamlined approach to your procurement spend, your team is constantly adjusting to moving targets. To take the guess work out of procurement management consider what online catalogues can offer and how your organization can benefit from tracking and centralizing all procurement decisions in a single database. Two other major wins of streamlining your processes is that your operations team feels empowered to make better decisions and it helps create consistent policies throughout your communities. Williams explains, “Minimizing manual steps makes our processes easier for our properties, staff and vendors, and we embrace tech innovation. From a site user perspective, all our team needs to do is log onto Marketplace, place their order, the system will generate a purchase order, that follows our predefined workflow to get all of the necessary approvals. From a management standpoint, we have access to the analytics, from which we gain greater visibility into our working capital and budget.” Go beyond business continuity As organizations prepare for our post-pandemic reality, integrated technology remains a key determinate in the ability to...