Magazine article Journal of Property Management

Suite Life

Magazine article Journal of Property Management

Suite Life

Article excerpt

Managing Corporate Apartments

Have you considered expanding your apartment community's operation to include corporate housing? You can join the many property management companies nationwide that have found opportunities for profit in extended-stay housing.

Hank Baker, vice president of marketing for Irvine Apartment Communities (IAC) describes the factors that prompted this company to pursue extended stay

"Because IAC's 53 apartment communities are located within 90 square miles of Orange County's high-profile business centers, we felt we had an unequaled opportunity to develop a local, long-term corporate apartment program," says Baker.

"We saw opportunity in providing extended-stay apartment homes to those individuals with temporary job assignments, those in the process of relocating, government employees on TDY, seasonal vacationers, and those seeking fully furnished apartments.

"While conventional renters comprise the vast majority of our residents, IAC finds we can broaden our base of occupancy by offering the additional convenience of corporate housing as another product that meets the needs of rental housing in the Irvine area."

Baker has found that some corporate guests became conventional renters and even purchase homes in the Irvine area.

Operations

If location creates the potential for successful corporate housing, wide-ranging services are what spell success for the corporate housing manager. "Your corporate program is 100-percent about service. It has much more of an alignment with the hotel industry than with typical property management," says Terri Norvell, president of Norvell and Associates. While working with Maxim Property Management, Norvell launched and managed "The Corporate Living Network" of over 650 corporate apartments on the West Coast.

In fact, hoteliers such as Marriott and Hyatt are already active in the corporate market. The Hyatt Touch now includes business plan floors with all high-tech office essentials, a 24-hour business center, and a daily continental breakfast.

Because of the more intense customer service and support generally needed with corporate apartments, one on-site manager can effectively manage about 175 units with home office support in accounting. Corporate clients demand immediate service so developing systems for tracking move-ins and billings are essential because of the short-term nature of most leases. A spreadsheet and a database program can be key tools in both marketing and administration.

Most corporate apartments are billed 30 days in advance. Flexibility in accepting payments is a must. Accept credit cards for rent payments. Also determine if income for corporate apartments is subject to state or local hotel/motel taxes and incorporate these fees into your pricing and accounting.

Bill Hammond, senior vice president, property operations, Gables Residential, offers the following suggestions for establishing a rewarding corporate housing program:

* Train your staff to understand corporate housing

* Keep corporate leases staggered so they do not all expire the same month.

* Treat corporate housing as a separate business, and

* Track corporate apartment income and expenses separately from conventional apartment operations.

Allocate specific apartment units to your program, and remember that not every apartment is right for corporate housing. Most management companies limit corporate housing to 5 to 8 percent of their apartments.

Stocking the Apartment

If providing hotel-quality service is one key component of extended stay success, providing housewares and furniture is another important element to successful corporate housing. "Service is a critical part of our success as a furniture vendor. We must be able to deliver furniture as quickly as 24 hours after the order is placed. We must also be able to offer a variety of packages that appeal to various clients, such as the CEO of a large corporation who is relocating, an employee on a short term assignment or even an entire family who has lost their home to disaster. …

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