The Creative "Viz"

How can developers scale their marketing efforts and drive real results, even in a challenging market? In this episode of The Creative Viz, Scott Baumberger talks with Deren Akinci, VP of Marketing and Strategy at ACE Project Marketing Group, about what it takes to succeed in real estate marketing today.

Deren dives into his experience growing ACE’s portfolio of multifamily and resort projects across British Columbia, offering insights on how to build scalable systems, adapt to market slowdowns, and craft strategies that deliver measurable outcomes.

If you’re looking to elevate your real estate marketing game with smarter, results-driven strategies, this conversation is a must-listen.

Scott Baumberger: Hello, and welcome to the Creative Viz podcast where we talk about topics in architecture development and visual design today. I'm pleased to have Alicyn Emerick - she is the director of Marketing and Communications with Greenberg Gibbons in Baltimore, Maryland. Welcome Alicyn, it’s great to see you. 

I understand Greenberg Gibbons is very focused on retail. I'd love to hear about your role and how retail is doing right now?

Alicyn Emerick: Well, Greenberg Gibbons is a premier real estate developer, owner and manager specializing in retail, mixed use, residential and commercial properties, specifically throughout the East Coast. I've been with the company now just over 12 years which is wild and really exciting to see us in this state of growth that we're in.

And a lot of it does have to do with the fact that retail is doing exceptionally well right now and I think that you're seeing that it's one of the best asset classes in our industry, and we're feeling the same way here at Greenberg Gibbons. Last year in 2023, we had the best leasing momentum that we've had in maybe over 15 years. And I think we're continuing to ride that wave now in 2024. 

Scott Baumberger: That's great. What a difference just a few years make because it was hit so hard, in the pandemic. So you're seeing strong growth?

Alicyn Emerick: We are, we are. And I think that, with some of the trends in terms of less new construction taking place in our industry. We're seeing this pinch where businesses need a home and a lot of the existing vacancy that's out there right now is really appealing. So I think we're seeing a lot of success with leasing for that reason alone. 

Scott Baumberger: So it sounds like it's a mix of existing properties that you're acquiring and potentially repositioning. Are there new developments as well?

Alicyn Emerick: Yeah. A fun fact is, coming out of the thick of the pandemic, our president actually saw an opportunity to really diversify our portfolio and expand as a company. So we started an investment fund, which allowed us to expand up and down the East Coast and step outside of just the mid Atlantic region, which is really exciting for us as a company and as a business.

But that being said, I think that it gave us the opportunity to really sit back and think about what our strategy is going forward. And so, despite some of the negativity that might be surrounding new development, we're still very bullish on new development, and we actually have about 4.7 million square feet of new development in our pipeline.

Scott Baumberger: That's great. I want to touch on the new markets here in a sec, but I am curious, how has the tenant mix changed over the last few years? I've heard anecdotally that experience retail is, performing especially well and restaurants, Are you seeing that?

Alicyn Emerick: Spot on Scott. The experiential factor, whether it's a tenant itself or within our center, is super important. We're seeing a lot more of that experiential. So whether it be a new restaurant, or a concept that bridges the entertainment with the dining experience. I think you're seeing companies like Dick's Sporting Goods coming out with House of Sport, which is a really cool concept right now. Bridging that gap between soft goods and experience. We're also seeing that convenience and service are huge for us as well. So, convenience, I think, whether you're talking about grocery store or that kind of retail that spills into service with medical, beauty services… pretty much those products that you can't get online.

Scott Baumberger: Exactly. I was gonna say the same thing.

Alicyn Emerick: You can't get it on Amazon. Yeah.

Scott Baumberger: Do tell us about some of the new markets that Greenberg Gibbons is working on.

Alicyn Emerick: So, as I mentioned, we started our first investment fund, back in 2021, which was a lot of fun just being able to access new markets outside of that Mid Atlantic territory. So we ended up in the Carolinas, as far south as Florida, and as far north as Rhode Island. We recently acquired a project just outside of Nashville called Cool Springs Point. So that is probably the furthest west our acquisition has gotten. 

Scott Baumberger: interesting. So what does Greenberg Givens look for with site selection, both existing or potential redevelopment?

Alicyn Emerick: So I think for us it really, it does depend. I mean, I think when it comes to our development projects, one of the things that Greenberg Gibbons is known for is this idea of revitalizing a site. So for us, community is huge. It's one of our core pillars. And so anytime that we can go into a market and take a hole in the ground or maybe it's a dilapidated site that no longer services the community. We want to take that and our vision is to turn that into what will become a mixed use gathering place for the community.

As far as acquisitions goes, we still really strongly believe in the grocery-anchored center. 

Scott Baumberger: So, I can only imagine there's a deep pool of distressed retail at this moment. So are you finding it not so difficult to find  acquisition opportunities?

Alicyn Emerick: I think there's ebbs and flows. I think that, there was this opportunity coming out of the pandemic to start the fund and really acquire projects that nobody else was going after. And then I think the rest of the world caught on and we saw this influx and a lot more friendly competition is out there buying these assets. I think there's still a little bit of that, but it only pushes us harder to make sure that we're going after the right deal in the right market. 

Scott Baumberger: Every site's a little different but, are there criteria,you look for access to transportation, housing, any kind of metrics like that, when you're looking at sites?

Alicyn Emerick: Yeah. For us, all of that's incredibly important. I think that, for us specifically, we do have a focus on retail led mixed use projects. So, our business is about partnerships. We have a robust mixed use development pipeline where we intend to build additional uses that help and compliment that mixed use environment.

So, just kind of going back, thinking about how we're expanding some of our capabilities, any time that there's an opportunity where we can develop mixed-use, whether it's partnering with another organization to do a residential piece at the site, or hotel or commercial, that's really appealing to us. As far as some of the criteria and then there is definitely a grouping of criteria that we use when acquiring a project. 

Scott Baumberger: So, I'm thinking of, say an old but well located, having seen a better day, retail center. You might come in, rehab it, reposition it and are you, possibly adding a residential or hotel, other uses?

Alicyn Emerick: Yeah, definitely. I mean, one of the things that I think is super important is that we've constantly got to reevaluate our portfolio and figure out ways that we can evolve. And so whether that's repositioning the center and remerchandising. The businesses that are there, and resetting what that merchandising strategy is, to an overhaul on the common area and even densifying the project.

So we have a project actually out of Baltimore County, Maryland, where we were able to add residential back. I think it was like 2014 and since, in the last couple of years have now added a senior living component and another residential component to that as well. And so those apartments that should be opening soon will really compliment the center. 

Scott Baumberger: That's an interesting observation. So the addition of those uses, obviously that's a revenue stream, but it actually makes the retail perform better.

Alicyn Emerick: Correct. From there it really plays into the overall retail strategy as well. It's who we are bringing that compliments those uses. So it comes full circle.

Scott Baumberger: I can imagine. So, tell us a bit about the challenges that you are running into. When we talk about densifying older sites that can be really challenging.

Alicyn Emerick: So when it comes to any kind of new development, I think that you're running up against rising interest rates. And so that's definitely been an issue for the industry as a whole. That being said, you're also seeing less new construction because of the rising construction costs as it relates to goods and labor. And so, we're seeing that just like anybody else. I think you're also seeing that permits and entitlements are sometimes delayed when it comes to that new development. But it definitely doesn't deter our company. As I mentioned before, we still have plenty in the pipeline and feel that there's no reason to slow down.

We do believe that construction costs will come down over the course of the year. Mostly for goods. I wouldn't say labor, that's probably gonna stay high, but, I would say those are probably the biggest challenges that we're facing. And I think all it does is force you to become more creative with your strategy. 

Scott Baumberger: Well, that is encouraging. That's great. Do you run into community opposition with some of these projects, issues like increased traffic increase, multifamily residents, and concerns from the existing community. 

Alicyn Emerick: Yeah, I think what helps Greenberg Gibbons is just how involved they are with the community, from the very beginning of a project. So if it's a development project, we're meeting with the community as we're going through these hearings with the county or city or municipality. And moving forward, if we're adding to the site , we're attending community meetings, or we're working with our elected officials. And so that's super important to us that we have the feedback from the community as we're working on a project.

And so, yes, sometimes you do have passionate individuals who have a reason as to why maybe they would oppose something. And it's up to us to really stop and listen to what their fears or concerns are and be able to work through whatever that is. And most times, I would say that, it's just a matter of communicating and exploring. Explaining to them exactly what's going to take place, that we've done the traffic study, and that we have more than enough parking spaces on site, and sometimes just hearing that, is helpful to understand for us, it is about the experience once you reach the site. So we want to make sure that, when we go into a plan, or, a design, that it is appealing, To the guest as well, and, with the tenant and their accessibility. So I would say we absolutely do get that kind of feedback. But luckily we've always been able to work through it, just by having those strong relationships. 

Scott Baumberger: Let's talk about marketing for a sec. When a new development or reposition is about to go live, what are some of your strategies? Does your outreach for potential tenants and any community outreach, reflect that they might be some of the same people who will shop there?

Alicyn Emerick: Yeah, absolutely. I mean, we're working on a few of those cases now -  those properties that are under development. And just recently we opened a self storage facility which is the first in our portfolio at a center of ours called Reisterstown Shopping Center. And I definitely think that visuals really aided us to be able to convey that this wasn't your traditional self storage facility. It's an aesthetically pleasing building that really slides into the retail setting. So far, we've had really positive feedback from the community, but without those renderings, I'm not sure that they could have really visualized what we were trying to share with them, which is that, not only is it an underserved market for self storage.

And so you're going to appreciate just how it helps on a day-to-day basis with coming to the center, but it was so visually appealing and it wasn't going to be this back of house with boats and cars and things like that. So, I think that definitely helps. When we're looking at, prospective tenants, we are putting together, marketing brochures and specialty marketing pieces that really show them, not only the success of Greenberg Gibbons and and how we're a great partner as a landlord, but also to show the positioning of the center in the market and what their positioning within the center will look like. And so, everything from, sharing the demographics and the co-tenancy of the project, but also, using visuals to show them how their sign will look and how that visibility from, the main access or highway, and how well that reads. So I think that visuals are probably one of our best friends in that capacity.

Scott Baumberger I couldn't agree anymore! That's great. So it really does come down to communication then. That's what I'm hearing.

Alicyn Emerick: And that's a big part of what I do at Greenberg Gibbons. I really enjoy it, but I think, with communication comes listening - it goes hand in hand. 

Scott Baumberger: Well said. Thank you. Well, I'd love to hear about some of your recent success stories. We were talking a minute ago about the Sea Turtle project in Hilton Head, South Carolina. Please, tell us a bit more about that.

Alicyn Emerick: So, a fun fact is, when we acquired Sea Turtle Marketplace on Hilton Head Island back in 2022, everyone at the company raised their hand that they would go down there and personally visit it  themselves. So if you've ever been to Hilton Head, it's a beautiful island. And,the site itself is beautiful as a 99,000 square foot shopping center. We acquired it, but it was only 46 percent leased, and it was capital starved. And so, we saw a lot of opportunity in filling some of these bigger, box vacancies. We were able to add Golf Galaxy, HomeSense, and there was an undeveloped parcel that we've now signed Aldi to.

So now we've gone from a power center that was 46 percent leased, to a 98 percent leased grocery-anchored center. And I think as I shared with you earlier in a couple of weeks, that'll be a 100 percent. Huge success, all in all for us. 

Scott Baumberger: Even better! 100 percent, you can't do better than that. I know Hilton Head can be really challenging: zoning and land use is very strict on the island. Signage is a particularly sensitive topic. Every project is different, but, this one, especially, I imagine it stands out. Were there any unique challenges associated with it?

Alicyn Emerick: I think we're still going through it. We just signed all these leases, and we're just underway with some of those plans. It's definitely a territory that our company is all too familiar with in terms of going through the process with the municipality. And so, I think that this is just the same for us.

Scott Baumberger: You're ready for it. Yeah, that's awesome. Well, as we start to wrap things up, I'd love to hear any other positive vibes that you might have for us. I know it's been a really challenging time for the development industry as a whole, but it sounds like you have weathered it especially well. What do you have coming up, in the rest of your pipeline for ‘24 and ‘25?

Alicyn Emerick: I think, like I mentioned, we have about 4. 7 million square feet of development in our pipeline. And, I think that overall, we're just really excited to be kind of ahead of the curve. I think that there are a lot of companies out there that have refrained and sat back from new development. I think we see it as an opportunity to continue on our path as usual. It's been, a few years since we've had a new development project. So being able to see these mixed use masterpieces from different markets come to life, I think is really cool.

We're really enjoying AI a lot. There's a number of ways that we're using it to our advantage. A lot of other companies are as well, but one of my favorite softwares is Placer.AI. If you're familiar with it, we've used it now several times to our benefit. There's a report on Placer.AI called “A Day in a Life” video. And so we're using that to help renew tenants. We actually had a situation where we had an existing tenant, they were against us bringing a fitness user to the center, because they thought that the hours would overlap and it would impact their parking. and we were able to use “A Day in the Life” video to show them that that wouldn't be the case, and so we got the waiver from them. I think that there's a lot of good out there coming up in the pipeline and looking forward to seeing how the industry turns. 

Scott Baumberger: That's great. So it's not just coming for our jobs!

Alicyn Emerick: I mean, as any marketer would say, I'm loving all of the means out there on AI right now, but I think AI does a lot of good. It’s fun to see, I mean, if you look at what's going on in our industry, JLL just worked with a company called Imaginuity to create a virtual influencer, and I've had a lot of fun following that. The more that these take place, I think the more accessible and affordable it will be for the rest of the industry. 

I think it was just the other day - there are things we love about ChatGPT or some of these other AI platforms, but we went to do an image. And the woman had three heads and three hands. So you have to be careful. You have to monitor.  It's a tool, but it's not a replacement. 

Scott Baumberger: No, not by any means. Oh my gosh. Well, I'm afraid that's all the time we have today. I could talk about AI and property tech for an hour, but thank you so much Alicyn it's great to see you and I really appreciate your insights. Congratulations. It’s really great to hear that you guys are doing so well.

Alicyn Emerick: Thanks so much for having us. I'm excited to speak with you again - a year from now and see where we're at. But I appreciate you having me.

Scott Baumberger: Awesome, let's do it. Thank you

Scott Baumberger: Hello and welcome to the Creative 'Viz' podcast, where we discuss topics in architecture, real estate development, and visual design. Today, I'm thrilled to have Alaina Jackson Jackson with us. She is the Director of Sales and Marketing for PeakMade Real Estate in Fort Worth, Texas. Welcome, Alaina Jackson. Great to see you.

Alaina Jackson: Great to see you. Great to be here. I'm super excited.

Scott Baumberger: Oh, thank you. Well, tell me a little bit about what you're doing these days and how 2024 is going so far.

Alaina Jackson: So, I'm the Director of Sales and Marketing at PeakMade. I oversee all of our strategy for all of our verticals. Right now, that includes multifamily third-party management, student housing third-party management, which is our flagship property management, and then also our development company. 

I work hand in hand with development to get the properties launched with leasing. We step through that initial year, and then from there, jump right into renewal fees and things like that. I oversee all of that strategy in conjunction with overseeing the sales arm of our blended sales and marketing team. What that consists of is a group of regional sales managers. They split the portfolio four ways and oversee the execution of that strategy. 

So, really cool, very rewarding stuff. This year we are crushing it. Our portfolio is currently pre-leased at 82%, which is a really big deal because we've seen some really big rent increases across the board just across the country. We have also recently taken over some Canadian properties. So that's super exciting to see us evolve and expand into Canada. One of which is a new development and then the other three are stable student deals. So really busy at PeakMade but a really good busy.

Scott Baumberger: That's great. You have your hands full, I can tell. I'm interested to hear, you mentioned that the sales and marketing groups are integrated - everybody does this a little differently. I'd love to hear how that came about and what that looks like for you on a day-to-day basis.

Alaina Jackson: For the last two years, our sales and marketing support departments have been merged into one, but right before that, we were actually two separate teams. One focused on back-of-the-house marketing items and then front-of-the-house sales. So that regional sales manager team that I was talking about that I oversee is very much a front-of-the-house client-facing position. It is the position that I held right before this one, so it's way more hands-on with the execution piece of things.

Two years ago, we decided because we can't have one without the other, we might as well go ahead and blend the team. So with that blend came my promotion into this role and my direct supervisor's promotion into a senior vice president role of sales and marketing, which has been very beneficial because we're able to tap into each individual team member on the marketing arm of the team. They have a very specific area of marketing that they are focused on and are able to partner with the front-of-the-house sales arm of the team.

A good example is our digital marketing manager. It was something that we implemented a couple of years back when digital marketing really started to take over in the student housing and multifamily space. His sole responsibility is to oversee and work with agency partners to come up with a very robust digital marketing strategy for each individual property and each individual market. We have a few properties or a few markets where we have multiple properties or a scattered site where each individual building needs something else or serves a different demographic. Right. So he's able to really get granular and dig in there to find out what we need to be doing to target our renter for those specific sites, even though they may be in the same market just on totally different sides of campus. And so from that, he's able to work hand-in-hand with the regional sales manager that might oversee those properties in that market to execute the plan and get that digital strategy rolled out. So it's been very beneficial for us to just be under one umbrella, one big slide.

Rebrand is another really good example and cool way that it has been beneficial to be one team. The marketing arm of the team is going to come up with what that really cool brand looks like or work with the agency partner to be sure that we have the right branding and messaging and all the really cool things that come with the rebrand. Then the sales arm of the team is going to take that rebrand and roll it out the right way at the property to make sure that it penetrates the market the right way. So it's been a game changer for us to be blended. This makes things a lot more efficient. In 2024, it was one of our very big company goals to focus on efficiency in ways that we can streamline things. That is one of the ways that we came into this year, and it's been leaps and bounds better.

Scott Baumberger: Sounds like it's working. So with such a wide geographic reach that you guys have projects, they're gonna be marketed very differently. Florida versus Canada even, right? So how do you work with the agency to personalize that messaging?

Alaina Jackson: Yep, so we do. We actually have a vendor partner that we split 50-50 every day profit. Just all things are number one go-to and that has also been very beneficial. They're actually based in the great state of Texas. They're our go-to partner for branding, they're our go-to partner for the new developments when we need renderings for plans and things like that, messaging copy for the website. We actually just got a really cool award this year for our website project with them. What we did was because we're a third-party management company, we don't own and operate, we just operate. One of the things we were able to do is streamline the website process, the onboarding of a new deal, and how they're marketing and branding. We go about that through the website by coming up with four standard templates that we used across the portfolio. We were able to easily onboard properties when we get them onto one of those templates that meets their demographic needs and resonates with the renter.

But that project has been successful for us because it makes us be super efficient. Once we onboard a property, we're able to tap into that agency partner and say template A is going to go really well with this specific brand in this specific market for these specific renters. And so we're able to implement that fairly quickly, a lot faster than most companies probably can with those custom websites that they're doing. And it still has a very custom feel to it. So even though it's a template, there's still a lot of different things that you can do to make sure that it is exactly what your property needs.

So that's been really cool to do with an agency partner and it's been great to have them because they know the ins and outs of how we work. They know the lingo. Student housing lingo is very different from multifamily and any other housing sector, so they're familiar with that. They're familiar with what our renters need.

Scott Baumberger: It sounds like you're not having to reinvent the wheel every time. I mean, that's the downside of engaging with lots of different partners, right?

Alaina Jackson: You know what? I always say a lot. No need to reinvent the wheel, but there's nothing wrong with putting some new rims on it! Things change and evolve, especially in marketing, so we're able to do that. They're very tapped into what's trending in the market, so it's been very helpful.

Scott Baumberger: Very cool. So there's the geographic differences. What about differences between urban sites and suburban sites, low-rise and high-rise? How do you approach those differently?

Alaina Jackson: From a strategy standpoint, we saw some really big rent increases across the board at all of our different sites across the country. But I think for the most part, those sites that are in those tier 1 and tier 2 markets where there are big D1 universities or the household income is high, there are a lot of wealthy families in the area, things like that, we're able to go in and customize the strategy to really be able to reach those renters where they are. And so with sites that are in tier 3 markets, where the university or the college is a lot smaller, we might be servicing a trade school, something like that, we're able to go in and then customize the strategy to include maybe some extra ways to just really push the value of the property.

Most of those renters are looking for the best value, so I'd like to start there depending on which tier the market is in or what kind of property it is. For the most part, any of our properties that are in major cities—Chicago, Miami—we have some co-living deals in big major cities, we're able to hit the ground with brand awareness pretty quickly and spread it pretty quickly. Whereas in some of the other markets where we're not seeing those high-rises, they're more garden-style apartments and lots of big competitors in markets like that, we have to go in there and take our time with how we want to approach our renters and targeting. There's a wide variety of who those renters are. So we have to be a little bit more strategic in those markets because the word doesn't spread as quickly as they do in tier 1 and tier 2 high-rise in big city living. So we start with brand awareness at all deals. Doesn't matter what market or what type of property it is, but we really try to go in there and identify who our renter is, who our demographic is going to be that we're going to target, and then build the strategy that way. The marketing cost per lead and lease is obviously going to be more for development for a tier 1, tier 2, tier 3, or tier 4. A large, big-bed property just has a lot more heads that you have to get on beds in markets like that. In tier 3 markets, you don’t necessarily have to do as much to fill them out. What it’s going to do is take a little longer, but the marketing budgets are significantly smaller. For the most part, the only time they're not is if the market is not performing, and you just do a little bit more to create some urgency and get them before the deadline. But typically, we approach them all the same. We start with brand awareness and from there work our way through the leasing season. So that’s our approach: market by market.

Scott Baumberger: And I imagine the rents are reflective of the different budgets that you have as well. I can only assume.

Alaina Jackson: I can get as creative as I want. And because you're building a brand from scratch, right? It’s like a new architecture, the biggest new hot thing on the market. You really have to be thoughtful and intentional with how you spend those dollars, but it requires more to build a brand. So those budgets are always friendlier. I love a good new development,

Scott Baumberger: For sure! I’d be curious, what are you seeing in the last, say, 12-24 months? What are the things that appeal most to prospective renters when they're looking at new and existing properties?

Alaina Jackson: So I would say convenience is going to be number one. I'm seeing more and more products be heavily amenitized. And what those projects look like has changed, right? We've always had heavily amenitized properties in student housing and in multifamily for the most part. But how I'm seeing it shift is what those amenities look like. So no longer is your typical fitness center and free business center with printing enough. Our renters, both on the multifamily and student sides, are looking for podcast rooms and multipurpose rooms where they can record their own videos and things like that. Stuff that's very influencer-friendly. I don't think that that will change significantly over the next couple of years. Social media is here to stay for sure. That has definitely been a game changer in drawing in renters and what that looks like.

Every year we conduct focus groups and this year we focused on multifamily. We get some feedback from our renters on how they want to be marketed to, what they like to see, what things should be included in projects, and upcoming new development projects. Amenities ranked really high on the list, but they want things that they're actually going to use. I'm seeing that convenience be top of their list: proximity to restaurants and local hot spots, public transportation, things like that. Washers and dryers, things that really create that value for them. Because I think they're willing to pay top dollar if it's convenient and if that value is there.

We like to focus on those things. Some of the projects that we're working on for the next season and for 2026—we're already breaking ground and planning for 2026—as you know, every chance I get to make sure that that feedback is in my developer's ear. I'm like, "Hey, this has changed. We need to make sure we're multiple-room. We need to make sure we're close to public brands." So things like that are really drawing people in. That stuff really matters.

Scott Baumberger: So do you feel like it's still a pretty competitive environment out there?

Alaina Jackson: For sure. And there's some areas where we're seeing crazy saturation. Gainesville, Florida is a good example. How are people finding grass to even build in this market? Gainesville is a really good example of that. The Tempe market—we saw this really big plateau with leasing at the beginning of spring where things just stopped. And it's because renters were like, "Wait a minute, I'm not paying $1,500 a month for a four-bedroom apartment." And so renters are very sophisticated and they know what they want and they know what they're not willing to pay for. In some of the markets, it's going to be a madhouse until the end, fighting to the finish. We're seeing it so much more than in other markets.

Scott Baumberger: How do you stay on top of all of this? I'm thinking about some of the latest tech, maybe even some AI. Tell us if these things are in your arsenal and how you use them.

Alaina Jackson: Last year we made the big shift. That's what I've been calling it, the big shift, because I know a lot of companies are still doing research and trying to figure out what products fit them best. And I think that's the right thing to do, to start with research because not everything's going to fit every company. So for us, we have partnered with an AI company that is really well known. They're called Me Elite, and we have been doing some really good work with them.

So we launched the flagship AI, which was the leasing AI. And what that does is nurture all of our incoming leads. So our marketing dollars are hard at work generating quality leads and focusing on leasing. And the AI steps in and helps us focus on capturing and nurturing beyond that. And so we implemented that, and because of the success, we've seen our tours go up 20 percent. We've seen a numerous amount of leads get over the leasing finish line in a much shorter amount of time than we were seeing post-COVID. So very successful. Because of that, we are going to expand and launch some other AIs with them. AIs include maintenance and voice. The technology that they're working with is just so advanced. It is mind-blowing. I'm like, where were we when I was a leasing consultant 10 years ago? Do you know what I mean? It's so mind-blowing but super efficient and very helpful for the site teams.

It really does remove some of those tasks that they have to do. It takes that off their plate so that they can focus on the resident experience, which, as I'm sure you know, results in renewals and more leasing and just makes their lives much easier. Another really cool tool that we implemented is self-guided tours, which has been fascinating for me. I'm learning something new every day about it. But what it is, is we're partnering with Tour 24 for self-guided tours. And what it does is allow our renters, especially on the multifamily side, to be able to tour at their convenience when the office is closed or if they work really late and their schedules just don't allow for them to come in. But they really want to come take a look before they make a commitment. They are able to use an application to schedule and do that right through our website.

And it allows for the teams to input voice prompts and scripts and things like that for them without them needing an agent, which, as you know, saves our properties a lot of money. You always need a human resource there to complete. You no longer have to. That's been very beneficial for us and our partnership is really great as well. We've seen some really good conversion results because of our partnership with them. So the use of some of that technology, the results that we're getting, I've been very excited to see the shift and I think it'll only get better.

Scott Baumberger: That's great. So post-COVID, I'm seeing renters more comfortable, more site-savvy, viewing and interacting with marketing content remotely and not necessarily having to go to the site. Especially if they're a prospective student and they may not know where they're going to be living just yet. And they may not be able to do a site visit. Are you seeing that as well?

Alaina Jackson: So we do back up to those friendly budgets with new development. Have a product to show for those fields because they're getting built.

We have really good partnerships with agencies that create that content for us. They'll come out with some drone footage and utilize our renderings to really create that virtual experience for us. But yes, you're seeing more and more students and multifamily renters that may be relocating or in the process of making a housing decision but just don't have the time to be able to come in. And we have all of the necessary tools that they need right from the website to be able to still experience. Matterport tours are something that we utilize. Also, virtual tours, 360 panoramic tours—I mean, we have it all. Our floor plans are 3D for most sites if not all, so that the renter feels like, at my convenience, if this is all I can do to really understand what it's like to live at the property or to see what the floor plan options are, we try to make it as easy as possible for those different platforms. So they've been very helpful.

Scott Baumberger: Just want to follow up on that last question. Are you allocating your resources differently post-COVID as a result of the new kind of renter preferences?

Alaina Jackson: We definitely are. Both on both the multifamily and the student side. We really need to be able to meet them where they are. And so because of the technology, our teams are able to spend more time focused on the resident experience or focused on brand awareness and building the brand, making relationships in the communities that their markets, that their properties are in. So we're able to allocate their time differently. With all of the change in technology, there's so much access to reporting and things like that, things that we would typically spend a large amount of time having to dive into. I think that that's been very beneficial. That way, we can also reallocate our time into finding new rims for our tires, and that's been beneficial for us on the corporate side as well.

Scott Baumberger: That's really interesting to hear. Can you share with us a success story, something that you can point to, a particular project or a particular thing that has really been game-changing for you?

Alaina Jackson: Yeah, I actually have a favorite new development project that we brought on board this fall with our first time opening the doors, or last fall—sorry, fall 2023. So this has been our first stable year. But the property is in West Midtown Atlanta. It's a big beast, it's over 600 beds. And as you can imagine, Atlanta's a busy city. So we service Georgia Tech, but where the property is located, you're going to get a lot of young professional traffic as well as Georgia Tech because it's not right on campus—it's not far, less than a mile from campus, but this specific area is just a very busy city.

So we opened the doors, and that first year was just such a struggle. The initial reset year was a struggle because it was hard to identify who our renter was just because our amenities were great. We had some really good retail spaces. But because we did the development of the actual apartments and a different developer did the retail, the schedule got off schedule and things got crazy. Fast forward though, we were able to open the apartment complex on time while they still were able to see all the complex. But the retail still wasn't finished. So we really struggled to get to budgeted occupancy, to our goals.

And this year has been our first stabilized year. Retail is open, everything's going, and the property hit 95 percent recently, which is crazy good. It's basically leased itself because of all the hard work that went into the development and into those getting those retail spaces open and getting a really hot location in those retail spaces. They have a Starbucks, just some really cool things that attract young professionals and student renters. But the property has been a really great success this year. And they're utilizing those AI tools that I talked about. They have self-help stores. Like, Digit is like the model property spot. I'm not kidding. If you're ever in Atlanta, go to Theory Interlock. It is a beautiful project. It was really cool to watch it go from “struggle” to “glow up”.

Scott Baumberger: Yeah, it's funny, we have several projects in Atlanta right now. It's a real hotspot all of a sudden. So very exciting. I'm sure I'll get out there.

What then do you think you would attribute to the success? Is it just really good timing? That's often what it comes down to. It's a great location. What do you think really pushed it over the hurdle?

Alaina Jackson: So I think it's a few things. I think the people piece is very important. We had the right team in there from the start. They were able to get in there and be with us for the struggle of getting the timeline just right. Our development team is very intentional with the products that they build, from floor plan type all the way through materials that they're going to use, to the interior designer that they select. The location—you can't beat it for a West Midtown apartment complex. I mean, what a busy and popping area of Atlanta, and they were just able to get it right, even down to the retailers that they were able to rent out to. I just think that they were very intentional with this project, and that's what did it for sure.

Scott Baumberger: It sounds like there are a lot of lessons here that you can take away and apply to the next one.

Alaina Jackson: Yeah. That's the big idea, right?

Scott Baumberger: Awesome. Well, I could do this for another hour, but we need to start wrapping things up. So many things I've learned. Really appreciate your time and sharing your experience with us. Thank you so much, Alaina Jackson. Great to see you.

Alaina Jackson: Thanks for having me.

Scott Baumberger: Well, with that, we'll wrap things up and I will see you next time. Thank you.

Alaina Jackson: Thank you, Scott.

Scott Baumberger: Hello and welcome to the Creative Viz podcast, where we talk about topics in architecture, development, and visual design. Today, I'm thrilled to have Mike Grill. He is a development manager with the Alliance Residential Company in Atlanta, Georgia. Welcome, Mike.

Mike Grill: Hey, Scott, how are you doing? It's good to be here.

Scott Baumberger: Awesome. Doing great. Thank you so much, Mike. Really appreciate you coming on. So, tell us a little bit about your role right now in development with Alliance.

Mike Grill: Well, my title is development manager, but I was actually brought on board because of my background in architecture. I've been doing this for almost 50 years now, but I flipped over to the dark side about 9 years ago. I have been with Alliance Residential, and I help them on the pre-development side as an in-house architect. Setting up standards and guidelines to make sure that we meet our goals and objectives on our projects.

Scott Baumberger: That's great. Well, your career evolution there, what made you decide to leave architecture for development?

Mike Grill: Well, it wasn't an easy decision. I love architecture. I found out at an early age that I was good at it. I could understand three dimensions. I took a drafting course in high school, and the first year was just mechanical drafting. The second year was architectural drawing, and that's when I fell in love with architecture and knew that that's what I wanted to do for the rest of my life. So, it wasn't an easy decision when I decided to leave architecture. But the longer you're in architecture, the less architecture you actually do. I was managing projects, managing people, but I wasn't getting to do a lot of the fun stuff. As an architect, we did multifamily residential and everybody was pointing me towards development. So, that's the next progression. I decided to give that a try and I've enjoyed it. I'm working with architects a lot more. I'm getting involved in the design a lot more. It's been a good progression for me in my career. I don't know if that's a choice for everybody, but it's worked out well for me.

Scott Baumberger: That's great. Yeah, that's a really interesting observation. The longer you're in it, the less you do?

Mike Grill: Yeah, unfortunately, it's true because your skill set becomes more about managing people, managing projects. So, you don't get to do a lot of the fun stuff or as much as you used to do. It's that the bottom line is really what you're looking at.

Scott Baumberger: I can certainly relate. That's funny. I think a lot of us in the field can. So, tell us, Alliance today is strictly residential, correct?

Mike Grill: Well, Alliance as corporately, I mean, we're headquartered out in Scottsdale, Arizona. We have 19 regional offices. In Atlanta, we focus on the multifamily residential aspect of that. We do have an industrial division that's run out of the Atlanta office, but it's completely separate, so to speak. But from a corporate standpoint, we do industrial, as I said, we also do single-family rentals in addition to multifamily residential. We also have senior housing that we do in some of our divisions. We do a little bit of everything as far as rental projects are concerned.

Scott Baumberger: That's really interesting, but all rental, not any for-sale properties, as I understand it.

Mike Grill: That's correct, yes.

Scott Baumberger: Can you walk us through, a lot of diversity in project types. Would that include urban projects versus suburban projects as well?

Mike Grill: Absolutely. In the past, before COVID, we were doing a lot of infill projects and urban environments, Texas donuts, so to speak, 350 units wrapped around a parking deck. But lately, we've been focusing more on essential housing. We call it workforce housing. It's more affordable or attainable for the workforce, being teachers, nurses, fire personnel, police. That's been a focus. And in order to make those projects affordable, we've had to go outside of the city center into the suburbs to find more affordable land. These are surface-parked projects. They are three-story walk-ups, and they're a little bit simpler projects to build. So, we are able to offer those at a lower price point than our infill housing that we did prior to COVID.

Scott Baumberger: Yeah, interesting. So, I imagine speed to market is much faster for these project types as well.

Mike Grill: That's exactly right. We have a prototype. We only have two unit types. We have a one-bedroom and a two-bedroom. And as long as I've been in this business, it surprises me every time. We spend months trying to build or design the perfect unit. And there's only so many different ways you can do it. So, we actually have one typical one-bedroom unit, one typical two-bedroom unit, and that's in every project. We have a 35-unit footprint that we apply to every project. We can get our permit set pulled together in a matter of weeks. Maybe a couple of months, we're in for a permit. The permit process is a lot more streamlined in these jurisdictions that we're going into, and within 12 months is our goal to deliver the first units. I mean, we're using the same products. We don't spend a lot of time changing things up. Just different jurisdictions will require a little different approach. But, for the most part, we're trying to use our prototype and stick to the prototype and use cost-effective materials and things like that. Everything from our construction through design to entitlement, we streamline it as much as we can.

Scott Baumberger: That's great. So, how difficult is it to adapt the prototype to these different markets that you might be in? I know Alliance is active in pretty much the whole country.

Mike Grill: Right. It's pretty easy. Every jurisdiction is a little bit different. They've got their zoning requirements. Some want more brick than others. Our prototype is basically, we use a lot of cementitious panels. Hardy panels, for example, are very durable. And with the different patterns and things, you can create some really interesting buildings. But every once in a while, people get caught up on brick. They say it's got to be brick, and we'll adjust accordingly. But we try to do our due diligence upfront and find jurisdictions that are accepting of what we're trying to achieve and that it's more of an affordable or attainable product. Now, when we start adding brick to a project, especially if it's 100 percent brick, the cost goes up. And of course, the rent goes up. It's just the way it is.

Scott Baumberger: Yeah. So, how do you approach site selection then? Do you go in with the mindset of this is going to be a workforce housing project, or this is going to be a market rate project?

Mike Grill: Generally, we do. I mean, we do our homework as much as we can and try to source sites. Obviously, the biggest factor is just land area. I mean, we could do a 350-unit deal in an urban area on one acre, whereas we need 20 to 30 acres somewhere if we're going to do workforce housing. So, the sites are much bigger. And they're vastly different products when you get right down to the core of things. It's not as if we could go in looking at a site and say, this site will work for our Broadstone product, which is our market rate apartments, versus our PROS product, which is our attainable housing product.

Scott Baumberger: Gotcha. Yeah.

Mike Grill: Two separate animals.

Scott Baumberger: It sounds like two separate processes and sites. So, what does the picture look like for the market rate projects right now? Do you see any signs of life?

Mike Grill: There's certainly signs of life. It depends upon the site, but you've got to have a story to tell. That's what we always look for when we're looking to develop a project. Certainly, if it's got a compelling story, it's a lot more desirable to our equity partners and able to get financing for those projects as opposed to just, hey, there's this great site, and we know we can make it work. Come along on the journey.

Scott Baumberger: That's not enough.

Mike Grill: It's not enough.

Mike Grill: Oh, yeah. Unfortunately, I'm gonna use the dirty word, and that's interest rates. People want to say, oh, interest rates are so high. And it's not really that they're high per se. Traditionally or historically, they're still low. It's just that they're unsettled. So, when they're unsettled like this, you've got capital that's sitting on the sidelines. They're looking for the best deal. They want the best deal, and they can ask for the best deal. They want to put their money to work, but they're able to sit back and pick and choose, essentially. The competition is a lot stiffer right now to find the right location, the right story, the right mix to get these projects across the finish line.

Scott Baumberger: Do you feel like you're competing with these investors? That they might invest in something not real estate at all, and they're trying to decide, should I invest in real estate? Should I invest in something else?

Mike Grill: No, most of these people are real estate investors. That's where they're putting their money. They're not trying to compete with other markets. It's usually people that we work with over and over again. There are proven relationships there. We enjoy working with the same people, and they hire us because they trust us because we can lower the risk for them and make the product as valuable to them and their investors as possible.

Scott Baumberger: So over the last, say, 18 to 24 months, they've been staying on the sidelines?

Mike Grill: For the most part, they're tentative. With the volatility of the market right now, and more interest rates, not knowing—it's not that they're high. It's not that people feel like they'll settle down at some point, but they don't know when they're going to settle down. They still haven't, and it's higher for longer is the current trend. Everybody's just waiting because there is definitely a demand for multifamily housing or rental housing, single-family rentals as well. The American dream has changed a little bit. The cost of homeownership is a little high for most people right now, so they're having to turn to rental options. The other thing too is that the younger generation, they don't value homeownership as much. They don't want to have to worry about cutting grass or fixing the air conditioning equipment. And if they get a call from somebody in California who says, hey, I want you to work out here, they don't want to have to sell a house. They want to pick up and go, so that's driving a lot of the demand. The demand hasn't gone away, and rents have started to cool down, but we see them starting to jump up a little bit because it's supply and demand. The rents were rising at a precipitous pace, then interest rates went up, so things kind of cooled. There's not as much product, and there's a lot coming to market right now, which has kept rents somewhat stabilized. But as soon as that burns off and there's more demand, there's not enough supply. The rates will start going back up.

Scott Baumberger: Yeah, that's really interesting. I've heard that some markets, Sun Belt markets, are starting to see some oversupply. But there's been this gap in development, so whatever's on the ground now is going to be on the ground in 2026 or even 2027 until new projects move forward. Are you seeing that in your world?

Mike Grill: We're not quite caught up here in Atlanta yet. In most of the markets we're in, they enjoyed a very large increase over the last several years that we've had to absorb. But the one thing about the markets we're in, the Sun Belt, is they're all growing, and people are continuing to move to these locations. So, it's just a matter of time before they release the stock that's out there now, and then there becomes more competition for what's available. It'll start to rise again. Simple supply and demand economics.

Scott Baumberger: So I understand that Alliance, particularly your group, is a merchant builder. So that means that when you complete the project, you sell it to a management company or an asset holder. Tell us about that process, what you look for, and how it works.

Mike Grill: As a merchant builder, we build all of our own stuff and find equity partners on these projects, which are larger companies that invest in these projects. Our investment, as well as our reward when we do sell these projects, is small. But what we do for these larger investors is take their money and build a successful project that we generally sell when it becomes stabilized. That's about 85 percent leased. We've sold projects before the day we got our CO. We do Class A projects. It's very nice. It's quality stuff. We use the same partners over and over again. It just depends on the project. It's always different. But at the same time, we find ourselves partnering with the same people over and over again because we've proven that it works, and it's been very successful for us. It's a good formula. Alliance is well known throughout the country, and so the name means something.

Scott Baumberger: Absolutely. That's really interesting. So, if there is such a thing as a typical amount of time, how long do you tend to hold the project?

Mike Grill: We generally project two years to get to that point. It depends upon the market, the environment. There's a lot of factors that go into that, but generally speaking, it's about two years before a market rate deal is stabilized.

Scott Baumberger: And has it been more difficult lately to market these projects? I'm imagining you market workforce housing very differently than you might a market rate urban project.

Mike Grill: Yes, that's true. Our workforce housing renter is not as sophisticated, perhaps, as a market rate renter. They don't do as much research online, whereas our market rate deals, those people do a lot of research online. They're looking at click rates. We track all that stuff to determine who's looking, how long they're looking. If they're not looking long enough, we're not doing something right. Engagement is what we try to target for those renters. But it's true of all of our projects. The engagement just might not be on a website per se for these more suburban ones. We'll put out a billboard, we'll do signage at the entrance to attract people. Don't do the funny dancing men, though.

Scott Baumberger: Hopefully it won't come to that!

Mike Grill: No, exactly. But marketing is a huge part of it, and we budget accordingly. It is our website renderings. We try to get pictures as soon as we can. The funny thing about renderings is we found we used to do them for marketing, but they're much better as a design and construction tool because we can talk all we want about the finishes and the high ceiling. But if it's in a rendering, it's like, okay, now I get it. And they see the coffers, and we've got the lights hanging down, and the ins and outs. We do renderings on the interior spaces. The units are a big one, and we show furniture. We actually do model units because until they see it with furniture in it, they can walk into a unit and it looks really nice. But the model units are very popular, and we do them on all our projects, including our workforce housing.

Scott Baumberger: Oh, that's interesting. So, you build a physical model unit on every project?

Mike Grill: Yeah, we take one unit and it's reserved as a model until we get to a hundred percent. We might look at leasing it.

Scott Baumberger: Yeah, that's great. Certainly in my world, the ability to predict how a space is really, truly going to look and feel has been game-changing for marketing campaigns. There used to be a lot of guesswork, and you would caveat things. Oh, this is an artist's impression. Don't get too caught up in it. But now it's so realistic.

Mike Grill: It's amazing. And that's what truly brings the point home. It's so important to what we do.

Scott Baumberger: That's fantastic. Thank you for sharing that. Are there any other success stories that you might share with us? We talked about how the workforce housing is working really well for you. Is there anything specific you can point to in that regard?

Mike Grill: Well, there is one thing that we've created here at Alliance. It's actually a proprietary platform that we created to purchase products. We've been able to take advantage of national contracts and really get the best price for the projects that we put into our workforce housing so that it streamlines the process to the point where we don't have to worry about what kind of plumbing fixture we're going to use or what kind of light fixture we're going to use. It's already set up. De Lovo is the program. It's spelled D-O-L-O-V-O, and we're actually offering that outside of the Alliance. We do have third-party contractors using this as well because it's been well received. When we talk about how we're able to reduce pricing, we're buying in bulk essentially. So, the more people we have involved, the better the deals get. We've tried to streamline it, and that's what a lot of developers struggle with—trying to streamline the process. I wouldn't say that it's a perfect fit for the Broadstone product. Each one of those is different. We gear it differently. The story's different. Not that the story is not different for our workforce housing, but it's a lot easier to control costs if we can get down to the types of light fixtures we're putting in every project, the flooring, the appliances. All these things add up over time, and it's truly amazing. We're seeing a 40 to 50 cent improvement in pricing per square foot.

Scott Baumberger: Yeah, wow. That's impressive.

Mike Grill: It's huge. It's allowed our workforce housing to just explode. It's probably 65 percent of our product today.

Scott Baumberger: Wow, congratulations. That's really great. As I'm hearing this, I'm thinking through some of the supply chain issues that we've had over the last, say, three or four years. Is this something that helps with just getting equipment on the ground at the right time?

Mike Grill: Well, it's interesting that you say that because when we first pursued this, part of it came out of the frustrations with the supply chain and being able to get materials in a timely fashion. We looked at windows, for example. We were having trouble getting windows, and it was because the glass was kind of sparse for a while. If we just had a warehouse full of windows, they could be shipped tomorrow, and that's not really the model we wanted to create. It became more of a purchasing platform than a warehousing platform, but that may be an extension of the De Lovo brand at some point. Those problems went away pretty quickly. We're not having too many troubles getting our hands on materials right now, but that was kind of the genesis in a lot of ways, with the thought process when we developed this purchasing platform.

Scott Baumberger: It's so interesting. Everybody is trying to solve this in a different way. Sounds like you figured it out.

Mike Grill: Well, it's worked pretty well for us.

Scott Baumberger: That's fantastic. Hey, thank you so much, Mike. It's been great having you on. I really appreciate your insights today. Super encouraged to hear about affordable housing. It's near and dear to my heart here, and I really appreciate what you're doing. Thank you so much.

Mike Grill: Thank you.

Scott Baumberger: With that, we'll wrap things up, and I'll see you next time.

Scott Baumberger: Hello and welcome to the Creative Viz podcast, where we discuss topics in architecture, development, and urban design. Today I'm really pleased to have Margo Utter with us on the podcast. She is a development manager with Stiles Development in Fort Lauderdale, Florida. Welcome, Margo. Really glad to have you on.

Margo Utter: Yes, thank you for having me. I'm excited to be here and dive deeper.

Scott Baumberger: Tell us how things are going so far in 2024?

Margo Utter: Very heavy focus on multifamily. I'm with the Stiles residential group, but we have several different development divisions here at Stiles. For 2024, it's crazy that we're right about halfway through the year. It always surprises you. It's certainly not been as robust of a market as we were all expecting. We hit some bumpy times in 2023, and everyone was looking for relief in 2024 in the interest rates and for rent growth to stay strong. It certainly hasn't been the fruitful year with light at the end of the tunnel that we were expecting. I think we're still very much in the "survive until 2025" stage. However, there are peaks of light here and there, and we're still very fortunate to be working in some of the strongest multifamily markets in the U.S. So, not the best, but staying hopeful.

Scott Baumberger: You're hanging in there. I've heard that term a lot, "survive till 2025." That's funny, I can certainly relate. But, if you can tell me, what's some of the appeal behind multifamily, and any particulars that you might be able to share with us, not just in South Florida, but I understand Stiles is very active throughout the Southeast.

Margo Utter: Yes, particularly for myself, I always had such a strong interest in multifamily to begin with. When I was first getting exposure to just the development world in general, you're creating a space that there's going to be an end user living in. It's all about lifestyle, constantly thinking, "How is someone going to use this space? How is someone going to live here?" There are so many interesting aspects to that, both physical and psychological, thinking about the different renter profiles. It's very interesting, especially to see how it evolves and to be on the forefront of lifestyle and how people live since we have such a large renter market right now.

Going into why multifamily has been such a strong asset class, people always need a place to live, regardless of the desire to eventually own an asset and build equity. There's always going to be a class of people who are going to be renters, either because they don't have the means to buy a house or they want more flexibility. That's when the multifamily space becomes very desirable. Right now, it's difficult to purchase a home or a townhouse, a condo, whatever it may be. It doesn't matter whether you're a young individual like myself, recently out of school, or even people in their mid to late 30s, it's still very challenging for housing to be attainable. That's where multifamily comes in. You compare the cost of a monthly mortgage payment to rent, and even in a strong urban market where rents are high, it still makes more sense to rent. That's what creates such a strong market for us in multifamily, especially in the Southeast region.

Scott Baumberger: You're primarily developing rental properties as opposed to for sale. Is that correct?

Margo Utter: Correct. We have, in the past, developed condos. I believe that's how our group started over 10 years ago. We were condo developers. We have a few of those in our Rolodex, but recently we've been more known as multifamily developers. The condo market and for-sale property is not out of the picture. It's something we constantly circle around, especially in markets like we're dealing with right now. It's definitely a multifamily rental-focused group, but there's an eye on the potential for condos on the horizon.

Scott Baumberger: I think you touched on the difficulty with affordability. Can you tell us what opportunities there are for affordable housing development, particularly in South Florida? You mentioned the Live Local Act. Can you tell us a little more about that?

Margo Utter: Affordability is not only an issue in Florida, it's worldwide. It's a top conversation in many markets in the U.S., and obviously, we're talking about it in Florida. Counties and cities across Florida are having discussions about it being a priority. Unfortunately, the cost of living, groceries, everyday life, and insurance have all added to the difficulty. Affordable housing comes up during the entitlement process when you're starting new projects. There's an opportunity for local governments to ask developers to include affordable housing. It's a large can of worms to open, and it's important to have these conversations. It's not a straightforward road ahead; there are several factors to consider.

In South Florida, there's such a demand for housing with a large influx of people since COVID. The demand for housing has led to rent rises that supply can't keep up with. In our Fort Lauderdale market, the demand is being fulfilled by the supply, but rents are stabilizing at high levels. It's challenging to achieve affordable housing for certain individuals.

Scott Baumberger: Interesting. Speed to market can be quicker with affordable projects or components versus pure market rate. Have you seen anything like that in South Florida?

Margo Utter: Yes, I've heard of that concept. It's developing in certain municipalities. Time is money, and expedited permitting and entitlement periods are attractive. We've had discussions about it in certain cities. The hard part is defining what expedited means. It’s valuable if it can cut the time significantly, but a few weeks might not be enough to make a difference. The city needs to be capable of making the process expedited to help developers financially. It's a great concept, but we need to see it in action. We hope to see more work on that soon.

Scott Baumberger: Thank you for sharing that. I wanted to learn more about Stiles as a group. I understand you have unique characteristics in your approach to development, particularly being full-service. Tell us how that works for you and how it affects the development process.

Margo Utter: Stiles is a family company and a full-service real estate company. We work together uniquely, and it's one of the reasons I love working here. We have a development and acquisitions arm, construction, architecture, financial services, tenant improvement project management, property management, and leasing and brokerage. Development touches construction and financial services the most. We outsource multifamily management to companies like Greystar. Our construction team handles most of our projects in South Florida, but we also work with other contractors for projects in other regions. Collaboration is everything, and we work as a family, supporting each other.

Scott Baumberger: Does having an internal development team help with the overall development timeline by eliminating the bidding process?

Margo Utter: Yes, it does. We have set contracts with our construction team, and having expectations outlined in the past cuts off a good chunk of time. There's still a bidding process with subcontractors, but working in each other's best interest is valuable. We may not get the absolute best pricing deal compared to bidding out to multiple contractors, but the benefits outweigh the negatives. It's a fun collaboration.

Scott Baumberger: In a hot market like South Florida, are there bottlenecks, labor supply issues? Does having an internal team help with some of those problems?

Margo Utter: Labor is still quite high, and commodity prices are softening a bit. Labor costs are still a significant chunk of overall costs. It's a challenge for all of us, making projects pencil with rising hard costs. Costs have gone up 50% or more compared to three years ago, while rents haven't increased at the same rate. It's a moving target, and we hope to see some relief in the future.

Scott Baumberger: Do you have a recent project that you classify as a lesson learned or success story?

Margo Utter: We recently brought one of our projects out to market, and it looks like it will transact soon. We locked in our GMP at a decent time, and we'll do well on it. There were lessons learned, such as implementing a radon filtration system that turned out to be necessary. If we hadn't planned for it, it would have cost us hundreds of thousands of dollars to retrofit. We also learned the importance of adding more co-working space to our projects due to the rise of work-from-home trends.

Scott Baumberger: Lastly, tell us about your initiatives in South Florida to increase opportunities for women in the development industry.

Margo Utter: I'm involved with the South Florida CREW chapter and ULI Urban Land Institute's Women's Leadership Initiative. We're working on setting up a mentorship program to get students involved. I have a passion for interacting with students and encouraging females to consider the development industry. It's important to have diversity in the industry, and I hope to continue empowering young women to know there's a space for them at the table.

Scott Baumberger: Thank you, Margo, for joining us today. I really appreciate your insights. It's been a fantastic conversation. Thanks for your time today, and we'll see you next time.

Margo Utter: Awesome. Thanks, Scott

Scott Baumberger: Hello, and welcome to the creative viz podcast where we discuss topics in architecture, development, and visual design. Today I'm speaking with Jason Moshe Zuki. He's with the NRP group in Charlotte, North Carolina. Working as a VP in development. Welcome, Jason great to see you.

Jason Moshizuki: Scott, thank you very much for having me on. It's a pleasure to be here.

Scott Baumberger: Great. Thank you so much. I'd love to hear a little bit more about NRP. I understand you guys are focusing on housing, but love to hear more about what you guys are doing. 

Jason Moshizuki: Absolutely. The NRP group, we were founded in the mid nineties at Cleveland, Ohio. We're a national multifamily development firm. Were now currently in 17 different states. We recently expanded to Phoenix and Las Vegas. Out West we're extremely active in the Midwest and the Southeast.

We have a very large regional office in Texas, and we have some offices in the Mid Atlantic and the Northeast as well. NRP Actually started its firm life as an affordable housing developer. NRP stands for Neighborhood Revitalization Partners. Kind of around the mid, early 2000s, we transitioned to market rate housing as well, and we now cover kind of the full spectrum of multifamily. I think to date we've developed over 50, 000 units. We've built, pretty close to 40, 000 or a little bit over that at this point, with a similar number of units kind of currently under management. We've really expanded pretty heavily here in North Carolina over the last couple of years.

I've been our developer basically since 2017. NRP hired me ran out of business school in 2014, been here about 10 years. It's pretty incredible because it doesn't seem like it's been that long. I started out as a development project manager at NRP primarily closing debt and equity, working on low income housing tax credit applications, rezonings, budget management.

It was a really good, solid training program to kind of segue into my role now. Around 2017, as I mentioned my manager now was covering, I think, about four to five different states, and just given the growth of this area and everything that was happening on the economic development front there was a desire at the executive level at NRP to bring someone here, more full time, and I was sort of the beneficiary of that.

What I've really enjoyed so far as VP in my current role now is the NRP has given me the opportunity to develop both market rate and affordable projects under the low income housing tax credit program. I'll abbreviate that as LIHTC, but that at NRP, as in most shops, that's usually kind of two different functions.

Based on my earlier role as a development project manager in my experience with the QAP, I was able to do both. And kind of early in my career, I would say I've definitely spent more of my time on the LIHTC side. Between 2018 and 2022 we developed four projects here in the city of Charlotte, 4 percent bond deals.

As of late, we've definitely transitioned more towards the market rate side of things. We continue to work on both. Now, given some of the challenges that you cover on your podcast and that many of the folks who listen to this are well aware with interest rates and costs and just kind of the prevailing environment.

We've definitely started looking at a third option called attainable housing, which is more of what we would determine as kind of the missing middle workforce housing, moderate income housing. It's a topic that a lot of different shops, competitors, NRP and peers and government folks are talking about just because it's such a need.

We have housing for the very lower end of people that are making low income type wages. Then we have the high end class A infill stuff. We're trying to do a better job, particularly in areas that have massive economic growth, like the triangle of trying to find housing for the workforce.

So the people that serve this area can live in this community. That's been something that we've been spending a lot of time on lately. And that's probably what I'm most excited about going forward here in 24 and 25.

Scott Baumberger: Awesome. That's really great. When I think of the missing middle, I'm thinking of ADUs. I'm thinking of duplexes, triplexes, still fairly small, modest developments. Is that what you're involved with?

Jason Moshizuki: That's a really important distinction because that is something like the city of Charlotte passed a new UDO a couple years ago. The ADU thing has been a big topic of conversation here at the municipal level. It is certainly a great way to expand the number of units that duplexes and triplexes. We originally got rid of single family zoning here in the city. Most properties could be duplexes and triplexes, and I think they're evaluating that going forward as a policy now. When I mentioned attainable housing from kind of the NRP program, essentially, it is a market rate type project, there's no tax credits, there's no public subsidies, so to speak, and these are multifamily buildings, traditionally garden style, 3 story type products, surface parking.

I would say relative to a project in south end Charlotte, for instance, that's a wrap or structured parking with urban infill type deal with really high end class a finishes and amenities. This is probably, I would say an a plus, I would say attainable housing is more kind of like an a minus where we offer very similar amenities, very similar finishes, but it's maybe a little bit stripped down a little bit more modest. The units are a little bit smaller. The amenity spaces are a little bit smaller, but it's still a very high quality product, but due to those cost efficiencies that we're generating from those design efficiencies, we are able to offer rents at a lower level than, kind of a pure class A type deal.

Scott Baumberger: Yeah, interesting. the unit mix then somewhat different as you compare attainable versus market rate?

Jason Moshizuki: It is usually. On most of our market rate deals, for instance, we have a balance of one bedrooms, two bedrooms and three bedrooms. On the base level attainable product. It's typically mostly just ones and twos. We have an attainable plus concept that does incorporate three bedroom units and does have some added, amenity type features unit finish type features to make the product more consistent with what's in that market currently.

I would say the baseline attainable product is roughly 50 50 between one bedrooms and two bedrooms, but there is some, obviously, variation depending on the site context.

Scott Baumberger: Sure and then, as we compare both of these options with quote, unquote, affordable housing, obviously, the financing, the tax incentives, et cetera, those are all very different up front, but at the end of the day, how do they compare, visually and in terms of livability, are they markedly different from the other types of affordable housing?

Jason Moshizuki: Yeah, I would say if you were to come visit city of Charlotte and see our 4 percent light tech projects, I don't think the average person would be able to look at that and say, that's an affordable development, based on the design requirements of the state's qualified allocation plan.

And other requirements that we have through the City of Charlotte that provides municipal gap financing. This is a very high end affordable product. The elevations look very nice. We have granite countertops in our units. We have many of the same overlapping features to market rate.

I guess the difference is there's very specific design requirements that are laid out that we have to do for affordable. So I definitely think those projects are going to look more similar to one another relative an NRP product versus like a cross and southeast product versus a Laurel Street. It's going to be a little bit more similar just because we have to abide by the same design requirements.

Don't think somebody that is not a housing expert would be able to go in notice that.

Scott Baumberger: That's a good thing. I'd be curious about the speed to market. Do you find that the financing, the regulatory aspects of qualifying for affordable housing, does that tend to slow down the development process, or maybe it speeds it up. does that compare with something that you were going to develop on its own market rate?

Jason Moshizuki: That's a really good question. I would say with an affordable development , you operate on a cycle of applications typically. So we have a pretty good idea about how long it's going to take. We know when you have to apply for the tax credits, we know when you have to apply for the gap financing and under the 4 percent program, it's non competitive.

So right now, we don't have a volume cap issue with bonds yet in the state of North Carolina. And so if you apply and you're meeting all your threshold requirements, you're probably going to get those And so typically after we apply, we would start our design process, moving towards full permitting.

So you have a pretty good idea about how long this whole process is going to take typically, and in places like Charlotte and places like Raleigh, I definitely think that Council in their respective cities has made affordable development priority. You have better odds of achieving rezoning approval in those specific markets.

With market rate there's a little bit more variability. Right now, I would say, given what we're seeing in the capital markets, very high interest rates and things like that. It is more challenging to capitalize these projects. For affordable deals, you still have a lot of banks that need CRA credit and things like that.

So, you're not having a bottleneck as far as getting debt, things like that. That's more straightforward. I would say on the market rate and attainable side of things, there's definitely is a lot of capital that wants to be deployed, but obviously it's a challenging environment.

We're seeing in a lot of markets that both locally here in North Carolina other markets elsewhere in the nation that NRP operates, equity is becoming a little bit more challenging right now. And so we're probably starting that process a little bit earlier, than we would in a more typical market.

The good news is we've been operating for a long time and we have a lot of good capital partners and capital relationships that we've developed over the years. So we're still able to capitalize our projects, but it is taking a little bit longer in this environment than I think we've historically seen.

Scott Baumberger: yeah, that's really interesting. Thanks for sharing that with us. I'm curious we're contrasting market to affordable. Does that play out in terms of your site selection? I imagine you go look at a site and you say, okay, this is primed for an affordable project, or this particular site is clearly ready for a market project instead.

Jason Moshizuki: There's definitely a lot of commonalities in site selection in terms of the amenities you want to be by, employment centers, those sorts of things between both product types. But on the affordable side there's a very specific set of criteria that, generally speaking, you have to meet in order to qualify for tax credits and to qualify for municipal gap financing.

Kind of a baseline criteria is proximity to neighborhood amenities. For example, you want to be within roughly a mile of a grocery store, a pharmacy, neighborhood retail, schools. Transit is obviously big plus, which has been sort of a guiding light for us in both market rate and affordable developments here.

There's some very specific demographic and locational details that you need to meet to select these projects. Probably what's less known is that there's something called qualified census tract for affordable developments. I think the definition of a qualified census tract, it's a term by HUD.

Technically the definition is something like, 40 percent of the folks that live in that census tract are at 60 percent AMI or below area median income. But you get a basis boost for being located in these specific census tracts. So the ideal 4 percent site that you would want to find would be something that meets all those locational details, proximity to those amenities.

And would also be located within a qualified census tract. There's certain features that municipalities prioritize like access to transit. I would say three of the four, LIHTC deals we've done in the city of Charlotte have all been located very proximate to the light rail system here, the blue line.

If you have that in your back pocket, when you're trying to pitch this deal to the cities to get You have a big advantage, generally speaking. On the market rate side of things, you still want to be close to all these great amenities, but I think the first thing you're looking towards is probably more rents.

You have a model that you're trying to hit certain targets. Return metrics and you have a rent in mind for whatever concept that you have. you take a look at the rent comps and you see that there is one comp or two comps or three comps that are located within X distance from the site.

And that kind of gives you a baseline to know that there's a market there. Then you start your search, looking further out towards, what else is close by? What are the major employers, how quickly can I get to the employment center? How close is transit? Those sorts of things.

There's a theme that I've heard a lot of people talk about in the last couple of years, where housing pretty much at all the different levels is becoming more commoditized, I guess you would say. There's kind of a sameness due to housing code and things like that. The one thing obviously that you can't replicate is the neighborhood and the amenities that are around it and how that makes living there a better experience for the residents.

Scott Baumberger: Absolutely. That's really interesting. Thanks for walking us through that as well. I understand NRP you manage the properties as well once they're developed. How would you manage the different types of properties differently or what is your approach to the different types I should say? 

Jason Moshizuki: So yes we are vertically integrated. Our management team, we have a market rate management team and we have an affordable management team. The reason why that is, is because on the affordable side, during lease up, there's an income qualification process. In the city of Charlotte, despite a lot of resources that politicians and everybody else, the private business community has put in, obviously, it's a very fast growing area, there's a fair amount of gentrification in these neighborhoods and rents have gone up here a lot over the last couple of years.

We do still have pretty significant affordable housing shortage here, which is not a Charlotte problem. It's an everywhere kind of problem. There really is no shortage of folks that want to live in these properties because it's affordable and it's high quality.

The first day that we go live on leasing for a lot of these properties, we might have A thousand people show up or a thousand people apply on just day one for 180 to 200 unit project. The problem necessarily isn't filling that building. It's making sure that everybody who's applying fits those and background check type requirements.

It's a little bit of a different process and it's very closely monitored regulated by the North Carolina, housing finance agency and the city and various other stakeholders in the process. There's just a lot more regulations and rules and things like that.

You need to follow that those folks are well versed and well aware of. On the market rate side of things we're at this year, and 2025, we're basically hitting a 50 year high in supply charlotte. pretty sure the triangle is similar right now.

You have roughly double the amount of units coming online. Right now there's a lot of competition on the management and lease upside.

You're definitely seeing a little bit more concessions and things like that. I definitely think that management is having to get more creative in such a competitive type of environment. On the affordable side, you're trying to make sure you're qualifying and following the rules. 

On the other side, on the market rate, you're trying to make sure that you're competitive with everyone else that's also trying to lease up. That's some of the topical differences.

Scott Baumberger; Yeah. That's really interesting. I suspect it's taking a bit longer to lease up these buildings where we're not really used seeing that on the ground?

Jason Moshizuki: Yes, we Don't have any market rate projects right now. We have 2 market rate deals under construction right now. The 1st of which is going to start leasing early next year. But, we've started leasing some affordable products that we're finishing construction on right now, and leasing is going very, very well, so far as we expected it would, but it's going to be an interesting 2025 for market rate leasing, I think.

Scott Baumberger: I was about to ask, is there a risk of oversupply? I mean, it sounds like rents could potentially drop a little bit if all of the supply is hitting at

Jason Moshizuki: Yeah, I would say right now, the city of Charlotte is projected to drop roughly four and a half percent or thereabouts this year by year end. I think that my opinion and I think a lot of opinions of my peers and other folks that are here is that we still have really good underlying fundamentals here in Charlotte and in a lot of the major metropolitan areas of North Carolina. We still have really good employment growth, still have great population growth. Charlotte has, I think something like 112 people moving here every day. Triangle Raleigh Durham has a little bit less, but proportionate per capita it's on similar levels. So I think long term, the future is very bright here.

I think most people think that 2024 and 2025 are going to be sort of speed bumps on what is otherwise going to be continuing to be a great run. I think it's going to take us longer to absorb the existing oversupply that we're seeing right now. I think that rents may be slightly off from what was projected at closing in a lot of these models, but longterm, definitely think that these properties will be well positioned for success.

I'm looking forward to seeing how we do.

Scott Baumberger: yeah, me too. I can see historically, even though if there's small dip, the rents do tend to rise over time. That's just natural how do you find that sweet spot of, we want to get just the right amount of supply out there so that we don't repeat this dynamic again, two, three years with the next cycle? 

Jason Moshizuki: That's a very difficult getting the timing of the market, right. Is always very difficult I think that right now, for instance, something that's come up a lot, just in conversation with other developers and, the higher levels of executive leadership NRP is that, when things are going good. Things are going gangbusters, like they were in , 22, for instance. There's a lot of competition for sites. probably overpaying. You're agreeing to take risks the purchase and sales agreement that you might not otherwise by waiving certain contingencies or closing faster than you would want to do ideally.

I think right now, for instance, where we're at a point in time where high interest rates and costs and various other things are slowing production here pretty significantly this year. Now it's kind of the time to start, for lack of a better word, trying to reload your pipeline, trying to find Good sites. Sites that may have dropped or that may have been coming back from developers that agreed to those overly aggressive terms when times were good and then got down the road and they were not able to capitalize the deal So think we're trying to use this time this bit of a market law, I guess you would say, to reevaluate where we want our properties to be. Where there's opportunities and where we can find favorable, land deals.

So when market turns in a year and two years that we're ready to go. The thing about institutional development is that it's a long process, you well know. I mean, most of the life cycles of these deals from the time that we find it to the time that we start moving people in the buildings, that could be four or five years depending on what the situation is.

 Sometimes you have to look for the bright side when you're dealing with temporary setbacks. So that's certainly what we're trying to do at NRP.

Scott Baumberger: Yeah. like to say it's like an eternal optimist, cause we're always looking out several years the future. You have to believe that the market's going to be there because got to make it happen today.

Jason Moshizuki: Absolutely. Yeah, when times are bad, people are overly pessimistic, and when times are good, people are overly optimistic, right?

Scott Baumberger: For sure. Well, thank you so much for that. Jason. Love to wrap up with a recent, win or success that you and your team may have had. Is there anything like that, that you can share with us?

Jason Moshizuki: Sure. We're working on our first attainable project in the state of North Carolina. I talked about this a little bit at the top of the call, but it's something that we're really excited about. We're entering sort of a new market for us, I guess you'd say, Selma in Johnston County. We have a project that we're working on.

Johnston County is something that's been on my radar for a couple of years . I think in the last 10 years, Johnston County has been the fastest growing county in the state of North Carolina. They have tons of job growth. They have a lot of fortune 500 companies in the area.

Nova Nordisk, I think has a 4 billion plant that they have that they're making Ozempic, Wigovi, and I think they have a plan to invest another 4 billion into that. They have other biotech and advanced manufacturing, type businesses out there. It's definitely an area where. You haven't seen as much multifamily development in the past but I definitely think that just given the growth of those industries that we're talking about and where those wages fall relative to our target tenant profile for attainable is very favorable.

It's definitely. new and good in the sense that we're working with the town and they've been great so far. It's a much less formal process, I guess you'd say, relative to some of the bigger areas. You can just call somebody up and talk to them and get an answer pretty quickly.

I think the attainable concept has been something we've been trying to execute here for a long time, but we haven't found quite the right site. And I think that Based on the way that Johnson County and Selma and Clayton and some of the other areas, other cities in Johnson County developing out and just how the overflow growth from places like Raleigh and Durham are shaking out, in another, two years when this is built, I think it's going to be really well positioned for success.

Scott Baumberger: that's great. Definitely one to watch. I was not aware the scale of the investment that you're talking about. That's really impressive.

Well with that I really want to thank you, Jason, for coming on. Really appreciate the insights today. Thank you so much for sharing that with us. I'll see you guys next time. Thanks so much.

Scott Baumberger: Hello and welcome to the creative viz podcast, where we discuss topics in architecture, development, and visual design. Today, I'm thrilled to have Landen Burcham. He is a development manager with Denton Floyd real estate group in Louisville. Welcome Landen, it's great to see you.

Landen Burcham: Hey, Scott. Good morning. Thanks for having me.

Scott Baumberger: Absolutely. Thank you so much for coming on.

 I understand you do a lot of work in multifamily development. I was intrigued by your background in city planning and how that took you towards the development side of things. Can you walk us through that a little bit?

Landen Burcham: Sure, I have an interest in city planning. I took a course in undergraduate called urban economics. I was studying public policy and economics at the time and started looking into a graduate program and city planning and urban planning. I decided to apply for it, and to do a dual program.

I got a master's in public policy, and a master's in city planning. Learned the ins and outs of land use, the history of housing, housing policy, and some real estate development. I took a few internships and one of those was at a local nonprofit that, was a affordable housing developer.

I started there last year of my planning program, and really enjoyed the process of developing housing. Never really thought that I would be a real estate developer or a practitioner. I always thought that I would go work for a municipality, or HUD more on the policy side of things. But, really fell in love with real estate development. I've been doing that for the past decade.

Scott Baumberger: That's great, thank you. That's super interesting. You mentioned affordable housing, that's such an important topic. Such a dire need for affordable housing throughout the country. Tell us, how's it going? What sort of initiatives do you undertake as you're developing affordable housing?

Landen Burcham: In my world, affordable housing is mostly created through the use of state, federal, local, funding sources that lend themselves to a capital stack to develop the actual housing. Then on the back end, the income is restricted. It's restricted to certain area needed income.

It creates a 30 year period in which the project has to be restricted to those income groups post construction and lease up. There's naturally affordable housing as well. Housing in markets where, rents are just kind of naturally affordable. It might be an older product, older building. For the most part, I deal in new construction or adaptive reuse of structures, and we use those resources to put together funding source to get projects done and then they're restricted to an income group.

Most of that is through the federal program that's allocated by state agencies called the, Low Income Housing Tax Credit Program. It's a very competitive program. There were 4 percent and 9 percent tax credits that are allocated in Kentucky through the Kentucky Housing Corporation.

Every state has their own agency that allocates these credits. The federal government allocates the credits to the states, based on a per capita calculation. I believe that just increased, which is good news. That means more credits are coming to the states for the development of more projects.

The 9% credit is hyper competitive. There's a competitive application that's usually annual. The 4 percent is starting to be more competitive, especially in coastal markets. These credits are awarded to developer to use for a specific project. partner with somebody who needs those tax credits because they have a tax liability.

It could be a bank, insurance company, private investor, syndicator, they purchase the credits and then they give you equity, which you use to put into the project to build the project. It's a pretty complicated finance source and it's very competitive. For the past, you know, since the late eighties, that's really our most affordable housing in the United States has been built.

Kind of gotten away from the federally funded housing projects through HUD. It's more of a viewable public, private, endeavor now. That's how we build most of our affordable housing. On the local side, a lot of municipalities have been funding and creating local affordable housing trust funds.

In Kentucky, I believe there are two largest cities. Those are extremely valuable. Most of the projects that we've been building lately have utilized those funds and they're usually in the form of a grant or a loan, in their low interest or, zero percent interest. Extremely valuable resources to help with tax grant developments or to subsidize just straight affordable housing developments using trust fund monies.

Scott Baumberger: Nice. You have projects in Kentucky and Indiana?

Landen Burcham: That's right.

Scott Baumberger: Do they look very different in terms of different state funding, local and funding trusts.

Landen Burcham: They do. That's one of the challenges of trying to apply a broad approach to affordable housing. Every state has different rules or preferences. Every municipality has different rules and preferences. Kentucky has a very specific type of housing that once built they detail those in their rules called a qualified allocation plan.

That sets kind of the scoring and the rules for year or a two year period. Indiana has their own. Florida has their own. Every state really has their own. We're also looking in Florida, so I'm more familiar with their rules now as well. It's very different from state to state, even from city to city.

Scott Baumberger: Right, then I guess pulling back a little bit as you compare affordable housing development versus your market rate. Do you go in at the outset knowing, okay, this is going to be an affordable project we're pursuing from the get go, or is that something you decide later on?

Landen Burcham: It's usually from the get go. Whenever you're looking for a building or a piece of land or a property it's very intentional and you know that it's going to score a certain way for those resources. So it's usually very intentional when you're looking for a particular affordable, property.

Scott Baumberger: Then as a result do you tend to identify different sites? Okay, these sites lend themselves more to the affordable market even before you move forward, you do it with that in mind?

Landen Burcham: That's right, and occasionally we'll find a site and we'll look at it through both lenses, both scenarios. For the most part, when you're looking for an affordable site it's for that particular purpose. Just fits those parameters outlined by the state.

Scott Baumberger: Absolutely, then there are distinctions in how they're financed but not necessarily how they're built. Do the projects themselves turn out different sizes that quote, unquote, kind of a sweet spot for affordable versus market rate within the same community.

Landen Burcham: Yeah, there are. Just given the finite nature of resources, the tax credits, for a 9 percent project, you're kind of capped just based on the available subsidy. In Kentucky, for example, on a nine percent project you're really only getting enough subsidy to do a maximum of like 90 units or so. For Taxes and bond deal it's much greater. I think in kentucky we've probably had upwards of 300 unit new construction projects, financed with the four percent tax credit bond program. It's not as limited, but just given the nature of the availability of the funding they're not as large as market rate projects.

The end product, the housing itself and the buildings are very comparable to market rate, if not better than some market rate in the same market. Just given the requirements of the state housing finance agency, they have pretty strict design requirements.

Scott Baumberger: Absolutely, that's very interesting. It's a changing landscape. Do you feel like the availability of funds for affordable housing is there? Is there still Significant pipeline to encourage that type of development moving forward?

Landen Burcham: Yeah there is, and there's a lot more advocacy for those resources than when I started a decade ago. It seems like more folks are familiar with these resources and the impact they can have in the community. So there's, organizations and individuals lobbying and advocating for these resources.

I think people realize the need. It's just still not enough resources. I can go on to another component of increasing housing supply and more affordability, by speaking to zoning and land use reform, which is another kind of hot topic. It's another area in which people, housing advocates are pushing policy.

Several states and municipalities are looking at their land development code to look at ways in which they can increase density. Jefferson County in Kentucky for example, I think 75, 80 percent of the land in the county is zoned for single family, which explicitly prohibits development of multifamily housing.

So it limits the available land for development. Certain cities have either totally eradicated their single family zoning requirement or they've increased the availability, or made the process to rezone or upzone easier. On the state level in Florida, they recently passed a bill called the Live Local Act, Senate Bill 102, and it's really interesting.

It allows for land that's being developed to seek the highest density of that municipality. So essentially does away with any zoning restrictions. So if you find a piece of land and you're going to build for multifamily, you can work with the local municipality and get it built without going through the zoning process.

It just automatically has the highest density of that municipality, which is great. 

Scott Baumberger: Affordable isn't necessarily multifamily. Are there affordable single family developments, that you guys are involved with as well?

Landen Burcham: I'm not as involved personally with those but in the past I have been. Especially post 2008, there were quite a bit of government programs, neighborhood revitalization programs available to kind of revitalize the single family market and homeownership.

There were quite a few subdivisions being built early 2010s that I worked on that had an affordability component, either subsidy to develop the infrastructure for the housing and income restrictions for sellers. We don't see as much of that these days. In fact, I don't think our state even has tax credit resources for single family development.

Just on the back end. If you're a homeowner, can homeowner down payment assistance.

Scott Baumberger: You're making a much bigger impact with the multifamily side. Something else that I thought was really interesting. We were talking about a little while ago was that your group has in house architects. I'd be curious to know how that shapes your development process and how you potentially learn lessons from one project to the next.

Landen Burcham: Certainly. I'm fairly new to this role so having an in house design team is certainly much different than the way I've operated for the past nine or ten years. Typically a developer has an architect or design team they like to work with that they don't always work with.

You have a project and you pick a design team, then work through the contract process. It's a very slow process. You know, architects are very busy. They don't always prioritize your project. And that's difficult when you have various deadlines, especially with public resources, you have very hard deadlines to meet with different phases of design document completion.

So having an in house architect it standardizes that process. You really don't have to worry about getting the ball rolling. We have prototypes that we can amend and adjust, modulate, that makes the process much easier. So we have a standard product. That, of course, is going to change based on side characteristics or, code requirements or different municipality preferences.

But they're easy to amend in the field as we move along, or during the pre development process. It makes that part of the development much easier.

Scott Baumberger: Interesting. Is it challenging to innovate within that space? How do you avoid the tendency to just do what we did last time?

Landen Burcham: I don't think just given the competitive nature of the markets we're in. There's really no such thing as being complacent. It seems like every new project we have to add something to enhance the product, amenities or just better materials. You learn lessons as you do these projects.

So I don't think there's room for complacency. I always have to be innovator or you won't be competitive in the market.

Scott Baumberger: The challenges come from outside and that forces you to be creative. Can you tell us what are some of the biggest challenges you're seeing right now? Current market.

Landen Burcham: Yeah, obviously availability of land that's entitled. If you find a good piece of land, a market or property you always have to get it rezoned and that's just time and time can kill deals. It seems like even if you're prepared and you have a local government that's supportive and residents and neighbors who are supportive there's always something that can pose a challenge. Then just the interest rates, financing, getting equity together, we're just finding it challenging to get deals closed, even if you do have a fully entitled deal.

Interest rates are still very high right now, and the supply chain still isn't totally normalized. Construction costs are still very high, materials are high. 

Scott Baumberger: It's challenging for sure. Are there recent projects that you can share with us? Love to hear about what's working well. Give us a quick win! 

Landen Burcham: The biggest win I've had recently was probably my last job. We did a historic adaptive reuse of an old warehouse that utilized 4 percent tax lot of local subsidy and historic tax credits and also vouchers for residents. It's a senior project and every resident received a voucher.

I think it really speaks if you can get project based vouchers. It really enhances the economics of a deal and allows you to rely on less subsidy. It's guaranteed income and it's a win for both the developer and the residents because they all get rental subsidy on other side.

I think that's a great model if municipalities have vouchers available. It's a really good model. And also just the historic tax credit is pretty lucrative right now. It's very difficult, very challenging on the design end. You always run into challenges with historic buildings.

You think you can predict all the issues with a particular structure, and really until you're in the building, you just don't know. So it's challenging, but it also is a really good tool.

Scott Baumberger: For sure. Is that something that your team is looking at moving forward? Adaptive reuse? I know, that's a hot topic for a lot of residential work right now.

Landen Burcham: We don't have too many in the pipeline right now, mostly new construction.

Scott Baumberger: Is it challenging for the affordable grants to sort of get their heads around adaptive reuse? 

Landen Burcham:  Yeah, it's difficult. It's kind of managing some paradoxes because there's different design standards for each that the state housing agency has pretty rigid design standards. Then the National Park Service and the State Historic Preservation Office have their design standards. It's just a matter of trying to trade horses and, you make compromises on both ends. You do have to seek waivers really through both processes because are just not designed to work together.

Scott Baumberger: Awesome. Well Affordable housing is very near and dear, I really appreciate your insights into this really important aspect of development and definitely want to stay tuned.

Thank you, Landen.

Landen Burcham: Thank you for having me.

Scott Baumberger: Absolutely. With that we'll wrap things up. Thank you so much for listening and we'll see you next time

Scott Baumberger: Hello, and welcome to the creative viz podcast. We discuss topics in architecture, development, and visual media. Today, I'm really excited to have Sam Mehra with Boos Development, he is a development project manager there. Welcome, Sam. It's great to see you.

Sam Mehra: Thank you, Scott, for having me. Love to have this platform to discuss things.

Scott Baumberger: That's great. Thank you. We were talking a minute ago. You have a really interesting background.  I understand you studied engineering, then work for a time in construction and are now on the development side. Can you walk us through that and how that happened?

Sam Mehra: I started my bachelor's in civil engineering in India. When you do the bachelor's, you basically get a small amount of knowledge about different fields in civil engineering. So you will get to understand traffic, you get to understand environmental everything so you get a little bit of exposure to everything. The most important thing that I liked from that experience was the construction management That is where I was like, okay. This is my niche. This is what I need to work on. And to work on that I came to the USA to do my master's at UF - University of Florida. That is the path that I took to make sure that I constantly work on something that I love. To me, construction management is something that I love to do.

I'm passionate about, whenever you go into a market, anything that you do, you want to understand the details before you start to work on the big things. That is my approach. You build your foundation strong so that  you can build a tall building on it. My approach was that let's build my foundation strong by making sure that I have exposed myself to subcontractor work. Understand what they work on, how they do work.

What are their emotions, feelings? What do they go through while they are on site? First three years of my career I spent on going through that. Making sure that what is the basic approach of subcontractors when they are approaching a project. Once I understood that, once I understood their process, once I understood how things work over here, I was like, okay, let me go venture in GC world now, because now I understood subcontractor world.

I can hire subcontractors properly. Then I started working on the GC side. More general contractor work I did for three, four years. Then I understood, GC work . The processes are in, I understand what to do, how to hire subcontractors, how to make sure that the productivity of the project goes properly.

My approach is always to keep growing, learning, growing, learning and growing. That is proponents of what I go by once I learn and I understand things. I just don't want to stick in a place where I'm like, okay, now I cannot learn anymore. This is it. As soon as I get to that point, I'm like, okay, I need to learn more.

That is how I ventured into real estate development. I knew, let's say 40 percent of what happens in development. I learned 60 percent of what goes on, a lot more on permitting entitlements. How to deal with the county, cities, design work. Part and parcel of things were always involved in my projects before, but taking it hands on and putting effort in it, it is a different story.

That is basically my journey and journey will keep going on. I'll keep trying to venture, keep learning and keep trying to grow as much as I can. 

Scott Baumberger: Absolutely, I don't care how old you are, how many years you've been doing it, there's always more to learn. It's such a unique industry we're in. There's always innovation and so much complexity, and every project is different.

There's a discovery with every single one. I'd like to explore, your background, particularly in construction. How does that affect when you approach a development project? How does that background shape your approach to it?

Sam Mehra:  That is a very interesting question, and very good question because see the thing is when you have seen how subcontractors work when you have been in their shoes and then you were in shoes of general contractor, you know exactly how they are thinking. 

What is their approach to do the work? How they will get to the end result that is giving you the building? What are the factors that affect the productivity, the quality of work? When you look at entire picture, let's say development of a real estate property is a big picture. 

Construction is a 40 percent 50 percent part of it because everything is dependent on construction. You get to understand the costs better. You get to understand the timelines better. Everything that is related to construction eventually affects your project plus the planning. The planning of a project becomes better because now I'm thinking okay I'm gonna put a budget together, but I'm realistically thinking what factors will affect this budget?

While we are going through this timeline, then I'm thinking about , Someone would tell me that it would take eight months, but I have built this project myself before I know it takes six months so I understand I can counter check those things and then the price wise. Let's say a site cost comes in and they say that okay, for 2 acre development, it will take 2 million dollars. But being a GC, I know that it doesn't take 2 million dollars. It takes only 1.4 million. All those factors affect the project. And the planning of the project. The more you can affect the planning of the project. rather than Doing the planning while you are doing the project Gives you a better result.

Scott Baumberger:  Absolutely. It's so interesting. Can you point to recent project where that might've come into play? 

Sam Mehra: I just did a project in Minnesota. We were building an Auntie Anne’s and a Jamba Juice, it is a two in one store. What helped me go through that project was that I have built a lot of QSRs. So I understood the cost of the project. I understood it only takes us 110 days to build it and timelines were good.

We were able to get through the approval of the project in the REC stage pretty quickly because I was able to put all those factors together. You're always learning this market. What I learned from that project was interesting. weather is such a big factor.

We started building I think in August. Our 110 days was going to expire, but we're going to complete let's say mid November was our target date. Now, obviously we had some issues with the constructability and things like that. But as we go by it, we found out the winter, the fall weather came early.

The snow started early. We were not able to do our asphalt. We were not able to do our landscaping because it was not suitable to do it that climate, although we got the TCO, we were able to open the project, but that is what I learned. Now, when I'm working in that climate. I would know that I cannot do these things and I will put timeline in my project that these 2 things would have to be done later or how to maneuver them. I would say on the budgeting side, we were very good. We were able to keep everything in grabs. The only other issue that I can remember and was a good learning experience was that, it was snowing when we were doing the due diligence so ground was hard. We were not able to do the landscape. This site had a hill on it, so on 1 side of the property, there was a hill that was 20 feet high. We were not able to have a geotech on site. We designed our entire retaining wall on the basis of the geotech that we did on the site, but we were not able to do the geotech on that.

As the entire timeline went by and we were ready to start the construction, we realized, Oh, that thing is not done. We need to go make sure that the geotech matches to what we have already encountered on the site. And interestingly, that didn't match. We had to revise the designs that delayed our process a little bit.

Like I said, I look at everything as a learning experience. Now I learned from it. I would make sure that it never happens

Scott Baumberger: Exactly. I imagine you have a buffers, contingencies for things that come up. And so that's going to be a different thing on every project, right?

Sam Mehra: We definitely try to put as much buffer, like 5 percent contingency to cover these things, but. It is more about the productivity of a project. When something like that happens now, you have to stop. You have things start to stall a little bit or GC is still trying to figure out.

Okay. I have this problem. How am I going to resolve it? Meanwhile, your subcontractors cannot come to site and work on the regular stuff. So I feel like it still affects the productivity of your project. That is why I prefer to do as much planning as you can in the starting and look at all the factors.

There are so many other factors. Yes, we will miss some of them, but if you have gone through these issues before try to look at all the factors possible so that You have a very well planned project when you go on site or when you even start the designing process.

Scott Baumberger: Absolutely. It's so interesting. I understand working on a project in Florida. We're talking about Minnesota. doing projects all over the country. When you are putting those teams together what do you look for when you're assembling teams for new development?

Sam Mehra: I have the approach of accountability - say you are hiring someone to work for you. You're gonna dig deeper to make sure that this is a good fit. They communicate better. They're accountable for the work. They're going to perform and we work as a good productive team I look for it and everything.

When I am looking for people who i'm going to work with i'm going to try to look at all these qualities before we do a contract. We are going to do a lot of conversations. We are going to talk about the project I'm gonna see how quickly you're gonna Send me the proposal. If you said you're going to send it by Friday, did you send it by Friday?

Are you delayed ? What is your understanding of the project? Also, I want to go into your history, how much of this you are being exposed to, or are you going to just do it 1st time? Because that is so important with development. Knowing the infrastructure, how to plan, how the permits will happen, what the county or city is looking for, because some people when they commit to these things and don't have that experience, then that learning curve.

Causes issues during the project. , I prefer people to learn, but don't learn on my project. Yes, I want you to learn, but learn with an expert while they are doing the project. Not taking on my project as a learning project. Those are the things I really focus on. I want everyone to be accountable as much as I am accountable for the actions that I take.

I want you to take the accountability for the actions that you take, because in the end, this is a partnership. You and I are partners. Your progress your success and my progress and success are both interdependent So let's look at it in that way And if you do better i'll do better and we all will go forward in the right direction

Scott Baumberger: Great attitude. I love it. Not every project goes well. I know that there are a number of, challenges for a lot of us in the industry, at this moment. What are some of your biggest challenges that you're seeing right now?

Sam Mehra: The challenges on a project are generally when you didn't plan properly. Let's say I'm working on a project. That is a 10 acre project right now and, it is at the final stages of completing the site work but the issues that comes on is, we did not design the turn lane properly or the structure should not be here - it has to be moved now. Sometimes when things happen, which Should have been planned properly beforehand and we should have looked at those things in detail and have not thought about it what it does is it delays the project. Obviously this is delaying the timeline of our project and delaying the productivity of the site contractor.

Also the biggest issue nowadays I'm seeing is the accountability with people. What they are working on. For some reason, either they get too busy, they pick up too many projects and then their commitment to a project goes down. They do not put all the efforts in trying to close out the project get the work done in time. That is one of the things that we have faced a lot. When people are not taking accountability and that is why I talked about why accountability is so important because if you take accountability for your actions It helps us so much. I don't like to micromanage. I like to give you all the freedom to do your work but at least give me the results that we talked about. Okay, this will be delivered in two days. Please do it in two days not five days not ten days two days is what we talked about delivered in two days. These are some of the things that we are seeing a lot. I don't know if COVID had some kind of effect on it, how people were working during that time but that accountability, I feel , has to come back, has to be what we should focus on.

Scott Baumberger: That's interesting. What do you think might help in that regard? Is it like you mentioned subcontractors there, are they potentially inexperienced in the field or with time that might get better.

Sam Mehra: I think there are two factors to it. One is obviously the experience. The second is your attitude towards the work. When you are working on a project, I have an attitude of I want to deliver the best product for you. That is my attitude. It is not about money, it's not about, what I'm going to make from this project.

It is more about how I can deliver the best product for you. All my efforts would be towards to make sure that The product has the quality it is delivered in time and it is in budget when you focus on Producing good product giving people services the money comes to you as a byproduct. People are focusing too much on trying to gain more profits rather than Giving people good service, good service brings you more clients, brings you more profit.

We should always focus on our product and quality that we give people and be proud of it.

Scott Baumberger: Absolutely. Well said. I couldn't agree more. I think that's true throughout our entire industry, and beyond. Thanks for sharing that. Do you have any success stories? Anything that's working particularly well for you right now? Love to hear these.

Sam Mehra: The approach that I have taken with doing a lot of due diligence on who I am working with and understanding their characteristics and how they work on their projects. Even going to the detail with doing multiple meetings with them even before we Have signed the contracts.

I think that has helped Me a lot. That is what I would attest to is that The more you start to understand the people you are working with I think that has helped me a lot to make sure that we are understanding each other properly because a lot is dependent on communication. What is happening a lot is that I would say X the person on the other side didn't understand it as X. It is Y for her. Then there is a miscommunication that goes on all along that project. The communication part that I have realized is very important. No matter what happens, as long as you communicate with each other on what the deadlines are, what we are trying to achieve and are we on the same page.

Throughout the process that has helped me a lot. That is one of the most important things that I have learned throughout my life that is what I focus on doing on everything.

Scott Baumberger: Absolutely. Really well said there. I couldn't agree with you more on that front. That just really speaks to the heart of the podcast. Getting people to share their stories and learn from each other, hearing other experiences. Thank you so much, Sam. I really appreciate your time with us today.

It's been a pleasure. I've learned a ton. Thank you so much for coming on.

Sam Mehra: I want to thank you for putting this show together. This is a really important initiative. This is what I was looking forward to. What I have always focused on is that let's not make our own mistakes if we can learn from someone else's mistake, and that is so important. For some reason we forget that. Everyone is on their own journey, why don't we learn from each other's experience and work good as a group, rather than thinking that I'm the only horse in the race, there are so many horses in the race. really appreciate your effort over here.

Scott Baumberger: Oh, well thank you, Sam. A great reminder, let's keep those lines of communication open. Let's keep the conversation going. Really appreciate it today. With that, we're going to wrap things up. Thank you so much for listening in and we'll see you on the next one

Scott Baumberger: Hello and welcome to the creative viz podcast where we discuss topics on architecture development and visual design. Today, I'm thrilled to have Jason Hughes. He is a talent development manager with Cortland and he's based in Houston. Welcome Jason.

Jason Hughes: Thank you.

Scott Baumberger: Great to have you on. So right off the bat explain for us what talent development manager means. What does that look like for you?

Jason Hughes: So a talent development manager within Cortland, what we do is all of our training. It's very up close personal. It's very science and data driven and you're going to learn that about Cortland. Everything we do is based on science and data, which is really, really cool. It's one of the reasons I love working for Cortland. A lot of our training is in person up front and personal on sites at our apartment communities. We can actually walk through the training in depth. We've won awards for our talent development through. Just recently. It's something that we're very proud of.

Scott Baumberger: That's great. I'd love to hear more about Cortland's unique take on both development and property management.

Jason Hughes: Cortland started out strictly a development company. I believe that was 0405 and they decided to bring management in house. That's when they realized that they wanted the best of the best. They wanted the best clubroom facilities. They wanted the nicest fitness centers, the coolest pool areas.

They really decked out their model homes. That's when they were realizing they received a review from a resident. The review read, you can give me all the bells and whistles, but if you can't provide the basics, that's like having all the toppings without the bananas and the ice cream. So, they took that personally because if you look at all new construction, multifamily, everyone has all the bells and whistles. That's when they decided to really focus on the resident experience. That's what really sets us apart from others in this industry.

Jason Hughes: We currently manage over 80, 000 apartment homes. We're very data driven. Our residents actually before their residents, they start getting surveys the moment they tour our community. 7 days after they move in, they get another survey. How was your move-in process because we know that's a huge impression. You receive a next survey 45 days after living with us. You receive a survey after every service request, after every work order. You get another Pulse survey 4 months before your lease expiration. If you decide to move, you get an exit survey. All in all, you're receiving and I haven't looked up the data, a good guesstimate would be your average resident receives 10 to 12 surveys a year times 80, 000.

Jason Hughes: It's a pretty heavy return. What we've done is we've taken all that data given by our residents and we put that into Our training, our talent development, we use all of that data. Everything that we get from our residents is how we train our associates on how to treat our residents. So top of the line resident experience.

Scott Baumberger: Love to hear more about that. Walk me through, what are your residents peak concerns? What are you getting back in these surveys? 

Jason Hughes: what we have found the number one, most important thing to our residents is communication. They want a lot of it. Over communication is preferred. Let's give an example. We have to shut the water off of a building in order to do a major plumbing repair. What we're going to do is typically give them a 48 hour notice listen on this day and time. We're not going to do it at 8 AM when people are getting ready for work, but let's say we'll say 10 30 AM on Tuesday, we're going to be shutting the water off. We anticipate it to be shut off for two hours. Please plan accordingly. Then a 24 hour notice, then a two hour notice.

Then let's say we're an hour in and we realize, Hey guys, this is going to take longer. Let's start communicating with them some more. We have, ways of communicating all of them, bulk messages that's what they want so that's what we give. We've actually had to tailor some of our applications so that we can communicate more with bulk communication. 

That's one thing that we've been working on for the past couple of years and we've done that. Of course it's evolving, getting better. That's the number one thing that our customers want. Number 2 is service. I tell my fellow associates, we work where they live.

You have to grasp that we work where they live. This is their home. Of course they want Things taken care of fast, they want them done correctly. They don't want to have to call you back. That's where we focus with our service teams. Number 1, let's get the job done correctly. We don't believe in band aids.

I've worked for companies in the past where I've seen the service manager come in and say okay, I need to order this part and the manager says, we can't. It's not in the budget. We don't believe in that. It is our jobs and our leaders, our community managers and our service managers to manage their budget around it.

Okay, well, we have to have it. Let's see how we can make this happen. We don't believe in band aids. We want to fix it right the 1st time because that's what the customer wants. The 3rd thing that our customers want is parking. They want to be close to their homes. They want to be able to have guests over and not have issues with that. The 4th, thing that they want is safety. They want safety and we don't provide security at the majority of our communities, but that's not what they're talking about. They want adequate lighting. They want to make sure that access controls are working properly.

Scott Baumberger: That's awesome! I'm hearing this and kind of running it through a marketing lens. When we're doing multifamily, we spend so much time on the product and I think that's because it's easy. We can, point ooh, look at this we have marble countertops or the latest tech but you're saying that this is number five on the list. There are things, obviously parking when we talk about safety, there are things about the site, the design, the layout of the building that play into those. But what I'm hearing mostly is that it's really up to the management, the systems that you have in place.

You mentioned communication is number one. That's not necessarily architecture, that's people. When you are marketing or, leasing, what does that messaging look like? Is that something you can speak to?

Jason Hughes: You mean, as far as our sales strategy?

Scott Baumberger: In terms of when you're trying to get new tenants do you focus on the service and on some of the unique systems that you have?

Jason Hughes: Not really. We do have great marketing teams and they know the data. They know what's going on in each individual market. It's not really my forte, but, I do get to talk with them once a week and find out where the hotspots are and then they know which assets to focus on to move budgeted money around to focus on those assets.

In general, like you said, it's kind of hard to market that. However, there are certain things that we do once we get them in the door. For example, we have a 45 day move in guarantee. The first 45 days of your lease, if you have a life change or you've decided, look, this was not the best fit for me. us a 30 day notice and we let you out of your lease. Not many people are doing that. I mean, once you sign that lease, you're locked in. So, we tell that and we use that as a marketing tool. I've told, Prospects point blank. I said, the reason we give you that guarantee and no one else does, is because we're very confident, read our reviews.

We want you to read our competition and reviews. We've gotten such a good reputation that we also allow transfers to any of our Cortland communities. If you're in Idaho and you get a job transfer to Florida, we can help you. You don't have to get out of your lease. We'll take you. Cortland's Cortland.

Jason Hughes: We have some really great stuff.

Scott Baumberger: That's a size kind of matters when it comes to those things. Even within the city, say you're in Houston took a job on the other side of town. It's like, I'm tired of making this commute. Right. 

Jason Hughes: We do it a lot. 

Scott Baumberger: That's really interesting. You mentioned something up front about Cortland that they started out as a development company, but more focused on the management side. What does the proportion look like right now? guys still doing a lot of new development or is the emphasis more on managing the existing properties?

Jason Hughes: I think we might have one development project going in another state, so I'm not 100 percent on right now our focus is acquiring and, doing value add through renovations. And again, changes within the market depending on conditions. Cortland decided to start getting into acquisitions.

They brought design and Cortland build, which is our construction division. They brought all that in house. So we are fully in house. We have Cortland build Cortland design. Then we have our investments teams and then we have our operations teams. So that's 100 percent in house. Right off the bat, our investment teams are underwriting deals daily, looking for deals and when they find something that, once they plug all the numbers and it works and investments approves it we make the deal.

If we're able to close on it a Cortland build and Cortland design come in immediately. Start changing things and putting the Cortland touch on it is what we like to call it. Typically, when they're underwriting it, that's where they're automatically going to find what type of premium we're going to get because of our renovations.

I was talking to investments 1 time, and they were looking at a deal and they had added a 300 dollar, rent up charge. Through that renovation. Like I said sometimes it changes again with the market. I came on with Cortland at the end of 2017 and I had been working for a development company.

It's all he did was develop new product and then they sold it and Cortland acquired us. It was a big package. Now we were already Class a communities, so there was very barely any renovations at all. maybe design came in and redid the club rooms in the offices, but they didn't have to do any And so, at that time, 2017, 2018, that was the perfect opportunity for them to acquire hold fairly invest any money in renovations and now it looks like they're going back to acquiring, renovating, it's always exciting.

Scott Baumberger: Yeah. I can tell. You mentioned the geographic reach, Idaho, Florida , all over. I think you even mentioned, have a number of properties , in the UK as well.

We're developing all of that. We have a great team out there. Cortland is truly changing multifamily in the UK like it's never been done before. the UK, what happens is a developer builds an apartment community and then they start selling off individual units.

It's beautiful. It's going to be managed like multifamily is here and is blowing them away. It is very well received because again, we're putting that Cortland touch, adding those beautiful amenities. The customer service the UK you have a landlord that owns 1 unit in a building.

What kind of service do you think you're going to be getting from him? kind of service that we can provide. So we really are changing and I get to see them once a year. We all meet up and it's really cool listening to what's going on there. It's amazing.

Scott Baumberger: And I imagine even within us, it's such a big group. you able to hear what other people are seeing on the ground? Do you get, the wider network of lessons learned from such a big group?

Jason Hughes: Yeah, we do. Number one, we have great communication. Our internet, Everyone's posting live updates and things like that. Our leadership team out of Atlanta's is very good at sharing information. Typically, what we do is once a year, get together with all leadership. That's when we bring all community managers, all service managers, all executives, we all get together and there's some learning involves that some training involved, but we also get all the updates. How Cortlandt's handling investments and how the UK is doing and typically this is towards the end of the year and we all look forward to it's really fun getting to meet managers from Colorado and things like that.

We get everyone together. It's a, really good time.

Scott Baumberger: That sounds great. It sounds like a great company to work for.

Jason Hughes: It is. If you can't tell, I drank the Kool Aid while back.

Scott Baumberger: this has been really great. one thing like to do, with my guests is try to end on a hopeful point. I know things can be really challenging. Not just new development, but, even renovations, just trying to stay ahead of this crazy market that we're in.

Can you share anything with us, to, perk us up? Tell us what's working, what do you see for the rest of 2024.

Jason Hughes: What we've been doing for 2024 is a little bit different than what we have been doing in the past, just because of the market conditions. So the way Cortland works is they put funds together. Their first fund, I believe they ever started was around 30, 40 million. I believe we are on fund six or fund seven.

I'm pretty sure it's six and of course our strategy is getting investors to come in with us. Right now we're sitting on a fund with 1. 5 Billion dollars. They have decided to hold on a minute just because of these market conditions and interest rates. Our strategy this year has been to Dispo some communities based on that investor portfolio. Then we're taking those funds to acquire our new acquisitions. Like I said, I talk to investments all the time because they're literally two cubes over. So I'm always excited to learn what's going on. Hey, do we have anything in the works?

Luckily we do here in our region. We're very excited about that. I think that's just unfortunately these market conditions, that's what a lot of people are doing. Our investors know us and trust us so much that they're willing for it to sit there because their returns have been so good so far.

Scott Baumberger: If you have a longer horizon, it's still a great investment. Absolutely. Fundamentals are still very good. Well, with that, covered a lot of ground today. Thank you so much, Jason. Cortland sounds like really interesting company, definitely one to watch. I appreciate your insights, sharing with us today.

Scott Baumberger: We'll see you next time. Thanks so much.

Jason Hughes: Scott, thanks for having me. Appreciate it.

Scott Baumberger: Oh, you bet. Thank you, Jason.

Hello and welcome to the CreativeViz Podcast, where we talk about topics in architecture, development, and visual design. Today, I have the pleasure of speaking with Sam Hud. He wears two hats over at Atlas Management. He's a development manager and also an asset manager for their properties.

Welcome, Sam. Great to have you on.

Thank you. Thank you for having me. Happy to be here and discussing all this crazy changing industry with you.

Well, first off, tell me, how is 2024 going so far? What are you seeing?

You know, it's a mixed bag. There's some good, some bad, but that definitely comes with the territory. Whenever there are challenges, there are also opportunities to pivot and make the most of it. We're experiencing a lot of the same challenges that everybody else in the industry is too, but trying to remain optimistic about what those challenges will end up being ultimately and how we can pivot and adjust accordingly.

Absolutely. I know interest rates are top of mind for a lot of us. Can you tell us a little bit about how the changes in interest rates are affecting you guys? Not just high, but they're also unpredictable.

Well, fortunately, they have gained a little bit more predictability as far as where things are headed. A lot of people are expecting the Fed to make rate cuts here soon. Sounds like there's some potential that that'll be held off on, which really no one in the industry is very excited about. At least from here, it seems that there'll be stable and/or going down, hopefully in the near future. It seems like a lot of the rate increases have stopped for the time being, which it's nice to feel like we've hit a ceiling there, knock on wood. It's definitely posed some challenges over the last 12 months or so since they started going up, especially in the development world where you're more prone to construction loans that have floating interest rates. With those going up, it definitely makes it hard to maintain that high level of interest, especially when they're long-term construction projects.

Exactly. So the rates then they can be variable over the life of the loan. Is that right?

Yeah, especially on the construction side of things. Part of the goal with it is to get construction done and a property leased up and stabilized as soon as possible so that you can get to a more permanent loan where it's at a five or 6 percent interest rate. And you're just steady Eddie with making the interest payments. But until you get there, that's definitely when things are more volatile and everybody's a little more stressed. The changing interest rates are making a bigger difference for everybody involved.

Sure. Have the rise in rates, as you mentioned, over the 12 months, has that affected the feasibility of any new projects? Is that put things on hold or canceled projects potentially?

It has definitely caused some delays in the current projects, just with trying to get financing in order. With the high interest rates, you're definitely burning through your interest reserves with loans a lot faster. So having to backfill that capital to pay that definitely has caused some delays in construction. We are pretty focused on the projects that we already have and are undergoing. So haven't as much seen it impact new work just because with the current market, we've sort of hunkered down and want to focus on our big ones that we're already undergoing. I will say we've definitely seen it impact the capital markets, refinance side of things. It's really limited loan dollars you can get on any sort of new loan or refinance you're working on. So that's definitely been a bit of a wake-up call. It's not so easy to get money now that the interest rates are 6 percent when two years ago they were in the twos, which is crazy. There's a lot of money out there, but it's a lot harder to get it just because of the new underwriting standards.

That's interesting. I understand Atlas Management projects are residential and for the most part are rentals. That's a strategic decision on your part. Can you tell us a little bit of the thinking behind that?

Yeah, on the development side of things, the goal is always to be long-term holders of the property. Our developer feels that you really get the most benefit out of it when you're putting all the time and money in on the front end to develop it, if you can hold the project after and the cash flow, get the long-term appreciation of it.

We have a unique system in that we both work for a third-party developer who has a relationship with Atlas and long term, we're going to be the property manager of those properties we're helping develop. So kind of keeping everything in the same flywheel as far as we're providing insights on the development side of, "Hey, this is really going to help you long term." Both from our perspective, if we're actually going to be managing the property, we know this will make things way more efficient, but also it'll help you save on operational costs or increased revenue potential, all that good stuff. Keeping everything in-house and keeping properties long term is the ultimate goal, just because we really think it helps you maximize efficiency as far as individual properties go.

That's interesting. Do you think the buildings are built differently if your intent is to hold onto them long term versus to hand them off very quickly? Would you build them potentially to a different, not necessarily the standard, but also different configurations?

I think there is. You run into a point where if you're a merchant builder, you're somewhat incentivized to do so a little more cost-effective and maybe not use as high of quality as products. Not to say you're cheaping out or building something of poor value or quality. But if you're not really stuck with the full cost of construction all the way through, if you're using lesser materials that are going to break down quicker, but you're going to sell the building after you're completed, you're not stuck with having to repair those costs or the maintenance or you're just less concerned with that because you're going to be out of the deal by the time those maintenance issues start to come up.

It is definitely something that we take into account. Our goal is to manage that property for the next 10 years. So we need to use high-quality appliances that aren't going to break down. We want to use high-quality finishes that the resident both appreciates, but we know isn't going to fall into our lap as, "Hey, all of this needs to be fixed right after construction is completed."

The incentives need to be aligned with what you're doing there. If you're a merchant builder, you don't want to build to a lower quality if you're just trying to get in there and build and get out. You do want to be extremely cost-effective and deploy your money quickly elsewhere. So you want it to be able to sell at a profitable price. There's definitely some things that change based on the strategy with regards to hold time for properties.

That's interesting. The incentives are different.

Certainly.

Something that's come up in conversations with other developers, particularly in the Seattle area, is it's very difficult to develop for sale properties because of the litigation exposure for new developments. Has that influenced decision making at all for your projects, particularly up in Washington?

No, and part of that is a lot of our development is in Oregon. What we do at Atlas in Washington, both Seattle and in Southwest Washington, Vancouver, is mostly third-party management. So we haven't really seen that much up there. And that's really not a development in Washington is not yet really a part of our business model to date.

Okay. So then just to be clear, in Washington, you're mostly acquiring existing properties for management.

Either on the property management side of things, yes, doing third-party management. We're not necessarily the owners of it, but we're taking it over both in property and asset management. A lot of our Washington business has been third-party property and asset management.

It sounds like the kind of geographic area you are looking at is Oregon, Willamette Valley, I suppose as far down as Salem but then you mentioned you do have quite a bit in Washington. So you're primarily developing in Oregon but managing in both states.

Is that right?

That's correct.

We have a pretty broad mix of what we work on property type-wise. We manage a single-family portfolio on the property management side of things.

We manage duplexes, but we also manage and have managed six-story mid-rises, luxury assets in downtown. We get to see a pretty broad spectrum of both development types and asset classes, both in construction and property management. It's been a great learning opportunity for both me personally and I think Atlas as a company. We're a young growing company. We've been around for eight or nine years. It's allowed us and our owners and everybody involved to see a lot of different things and grow pretty quickly from doing all that.

That's great. You touched on single-family rentals. Is that something that you are doing? I know that's an emerging market.

We have a portion of our portfolio. I think we're about 2,500 to 2,600 units managed at Atlas. I want to say 250 to 300 of those are single-family units. It's about 10 percent of what we're doing and is a big part of the growth for us too.

That was my next question. Is that something you're looking to expand on?

Yeah, we're targeting 3,000 units under management by the end of the year. A lot of that scalability does come from larger multifamily projects, but we do have single-family in mind and do you think it's a lucrative place to be? It's part of the growth strategy as well.

What's the size of a typical project? Sounds like you've got a pretty big range. So maybe there isn't such a thing as a typical. What types of unit numbers are you looking at?

As far as the development side of things go, it's about 100 to 200 units for the new construction that can be phased out primarily I have worked on the development side of four main projects; they have been a little over 200 units, just under 200 units. We have one that's just over a hundred.

Then there's a larger project down in the Woodburn area that once it's fully completed will be 586 units. So much bigger. It's being phased out in a way that the first phase is 179 units and then spread out after the fact. So it has fallen to where the projects are anywhere from 100 to 200 units and that's intentional. We feel that that's about the area where you can get quite a bit of economies of scale operating-wise down the line and start to limit your construction costs per door because it's spread out over a larger project.

Okay. That's interesting. So, because you're looking for long-term ownership here, that you don't want to build so many so quickly that you then have a huge backlog that you're having to manage all of a sudden.

Absolutely. Some of our projects are in more tertiary markets; we're not right in downtown Portland. So we are relying on some growth in those markets. If you build 800 units all at once, you're really banking on, "Hey, these are going to hit the market really well."

So by phasing it out, it does allow you to be a little more strategic and cautious as far as making sure the units get absorbed into the area and that they're being well received by the community and potential residents.

Yeah, that's great. This is a huge issue for a lot of architects, developers. Do you run into a lot of community opposition? Does that affect site selection sometimes?

A lot of that type of work, especially at Atlas, was done before I joined. I've been with the company about four years. So I really jumped on after a lot of that had been already discussed and finalized. I do now, especially with the city of Woodburn. There are a lot of off-site improvements that we've had to do as part of conditions of approval for the projects which is a bit of a hurdle on the development side of things.

That's a lot of costs you have to take into account in your construction budget. That's not directly related to the property itself, but ultimately, if we're going to manage these long term and own them long term, the community needs to be successful and beneficial long term. I do think these off-site improvements help to achieve that.

They are extra costs that can be a burden, but overall, they are benefits to the community, which should in turn benefit the property as well.

The long-term aspect of it. Absolutely. That's great. Related to that, I'm curious what your strategies are for property marketing. What's working right now? Give me a success story if you have one.

Certainly. One of the ones is one you're actually familiar with. Apex did a rendering for our Pacific Valley project. Before the property even opened, we were just starting to lease, you completed a rendering for it, which did such a good job, it's still on our website as far as the overall aerial photo.

For development projects, getting those types of renderings and being able to show potential residents what the property is going to look like, we think has been very beneficial, especially with all the competition out there. There's new apartments going up everywhere and people have lots of places to live.

So any edge you can get and drawing their interest early on in construction, we think is really beneficial to aid that lease up process, which is always paramount to the success of the property, because that whole time you have tons and tons of vacancy loss. So whatever you can do to mitigate that and get people in early is extremely helpful.

That's one success story. Partially thanks to your team for sure. It's one of the things I've learned being in so many different markets is effective marketing varies depending on the location, the asset class, all of that. Some more urban, higher value properties, you're going to be more online, you're going to be marketing using your typical ILS searches or big marketing agencies.

But in smaller communities, like Woodburn or more far out from Portland, you do get a lot more walk-ins. So effectively marketing with physical marketing, like monument signs or A boards or we call them bandit signs. Just really knowing your audience and knowing how to market most effectively and grab their attention is something we've learned just based on the various different areas in the Portland Metro and Washington markets that we're in.

That's great to hear. Sometimes you hand off the renderings, and you don't really hear the impact that they have. So thank you for that. Really appreciate it.

Feel that having that rendering is definitely an asset to us. You are a pleasure to work with and doing it, which is obviously why we're still continuing the dialogue going forward.

Thanks again for that. As you're saying this, I've definitely had conversations with other developers, brokers housing is such a hot commodity. There's such a dire need for housing, affordable housing, particularly in our region.

It's basically you build it, they'll come. I guess what I'm hearing from you is that it is a competitive market and marketing campaigns are still important regardless.

Certainly, with it being such a cyclical industry, that may change sometimes when construction wasn't as common or widespread as far as lots of people building, it's a little different, you can build a property and there's only so limited areas to live that people are going to find you.

In certain markets, as a lot of people know with what happened during the pandemic, people started to leave the city centers and go to more suburban markets and a lot of the construction and interest in building in those areas grew, and so those are newer markets where a lot of construction has happened, and there's a lot of competition for new renters, and I think that's where the marketing comes into play, and you have to be really efficient about who you're reaching out to, what kind of concessions you're offering to get renters in the door, and stuff like that.

It's not as easy as, unfortunately, as you build it, and people will just fill it. But depending on where you're at, can be easier than other locations.

If you've done your homework, you're already in the right spot.

What's that saying? If you fail to plan, you're planning to fail. We want to avoid that as much as we can.

This is great. As we're wrapping up I'd love to hear about anything that you're seeing out there that's making you hopeful, particularly, over the next 12, 24 months or so. A lot of frustrations challenges, shall we say, in our industry what can you point us towards, Sam?

Make us feel better.

There's a couple of things, one of which I'll just start with, Portland and Oregon as a whole. There's been a lot of national media about Portland's demise and dumpster fire, all this terrible news about downtown Portland and the surrounding area.

But being someone who didn't grow up here, I think a lot of the fundamentals of Portland and Oregon as a whole are still here. It's still a place with a great quality of life. There's basically everything you could want to do from going to the coast, to the mountain, to, go hike and ski it's all there for you.

I don't see that changing anytime soon. Despite a lot of what's been happening downtown it's still going to be a great place to live for a lot of people and overall optimistic about Oregon and Portland, despite what's been put out there in the news there's a lot of headlines that make it seem a lot worse than I think it is.

And that's coming from someone who lives downtown. It's still a fun place to live.

Oh, that's great. I could certainly vouch for that myself. All of those things are still here, as much doom and gloom as is out there.

Just go to the coast on a sunny day and you'll see that it's still a lovely beautiful as ever. Absolutely.

The other thing too is just, I know it's a bit of a scary new topic, but for a lot of people, you know, AI is really impacting things. For us at Atlas, that's happening in an exciting way. We really think it's going to make not only our lives easier as a property manager, but also long-term residents as well, being able to provide more timely service to them and really allow our property managers to be more efficient in the ways they're treating residents.

Allow them to have more time to focus on resident engagement and just enjoyment with the community instead of working on leases or lease renewals or stuff like that it's obviously fundamental to property management, but it's not necessarily adding to the day-to-day enjoyment of our residents and our communities.

It's great to hear you put AI in the hopeful category. Have a lot of people put it in the doom and gloom. "Oh, it's gonna take my job." That kind of a conversation. There are tremendous positives. I agree that it can eliminate a lot of the drudgery.

Some of the automated things that we do those tasks. Free us up for more creative strategic thinking. That's certainly my position as well.

I was fortunate enough to graduate from business school in the midst of a lot of this. That was one of the big things they preached was, if you're scared of it, of course you're going to be scared of it, but if you focus on how you can kind of pivot and use it in conjunction with your job, instead of being afraid of how it's going to take your job, that's really where you're going to excel.

There's definitely some things that are scary about it, and I don't know what's going to happen with all of it, but, try and focus on the positives of it and how we can use it to benefit our business and industry instead of harping on the negatives, which everyone seems to be pretty aware.

Yeah

Anxiety is a damaging thing to live with all the time. That's for sure.

Absolutely. Thank you, Sam. Really enjoyed our conversation and thank you again for being such a wonderful client with Apex. A really good partner there. And we really enjoyed the relationship. Want to keep it going. Of course.

This was a pleasure to talk to you and pleasure to work with you. Hopeful to see what we have in the future, more projects and hopefully more renderings.

Well, we're here for you anytime.

Thank you all for listening and we will see you next time.