Value branding in 2009

I just bought a Starbucks coffee and after receiving two 20% discounts the final price came to $1.14 after tax ($.80 discount). That is $.10 cheaper than the coffee cart outside the front door of starbucks. The other day I was at dinner with friends who have done pretty well in business. One has a summer home valued in my estimates at $50 Million. The topic of conversation which often times revolves around exotic vacations and expensive toys was all about finding value. Late 2008 and 2009 will be the value years.

So how do we prosper in a market where everyone wants something for nothing? We go back to the roots of our brand. When Brian and I set out to create the Signature Community brand we looked to create a new level of service and convince our residents that had only been found in much higher end luxury buildings. We have been successful over the past few years of rolling out an experience that is a real value proposition for residents of higher end buildings. We need to push that model.

On the acquisitions side we need to take advantage of the value opportunities that are now available in the market. Sellers (and more often lenders) are making decisions based on their immediate cash needs and not the long term value of the assets. As long term value investors we are looking at the value 5 years out although we are discounting the short term holding costs. This is providing a tremendous opportunity for growth of our brand.

So while I am not optimistic that 2009 will be a good year for the apartment industry (in fact I expect it to be one of the worst on record) I do see some silver lining in the niche we have created for ourselves on both the operations and acquisitions sides.

Let's make it happen.

Nick

The Mortgage Meltdown Video

http://www.cbsnews.com/video/watch/?id=4668112n

Cutting costs and revenue enhancement Ideas to prepare for the future

As everyone knows the economy is bad and only getting worse. We already have a few markets that are now operating in the red and I expect it will get substantially worse in coming months. As a company we are hunkering down to deal with this difficult situation. But we need everyone's help. We are making cost cutting and revenue enhancement a major focus at the corporate and regional levels but we need your help to find solutions at all levels of the organization. Please think about what we are doing out there in the field and give us your ideas on how to do it better or at a lower cost.

We will be having an additional award each Wednesday to the individual or group that comes up with the best cost cutting idea of the week.

Some of the ideas that have come from the initial meetings are;
temporary furnished housing, replacing costly copiers, replacing cable with WIFI internet in student markets, reducing office space needs, verifying pet fee charges, marketing our communities upmarket as a value brand (think Dunkin Donuts vs. Starbucks), move phone service to internet based systems, and less usage of costly contractors more work done in-house or with smaller sub-contractors from Craig's list type sources.

One thing that will keep us ahead of the competition will be keeping the Signature Community brand as a coveted brand. So please keep in mind that with all the cost cutting we must maintain the highest level of service and offerings possible to our residents. If we maintain the integrity of the brand through these tough times we should be well positioned to take advantage of the future economic upswing.

Thanks for making it happen.
Nick

HELP WANTED 2.5 Million jobs to fill

2.5 Million jobs!

That is what President Elect Obama has promised. My feeling is he can't put these jobs out soon enough. The US Economy needs more jobs if there is any chance of survival for millions of companies out there.

Companies from GM to NWJ all survive based on consumer spending.
And when consumers don't have jobs they can't spend. Lets hope these jobs come soon.

We are also starting an initiative within the acquisitions group to look in on where those jobs will be created so we can focus our acquisitions efforts in the right areas. If anyone has any insights as to where they these jobs will be please share with us so we can work our acquisitions accordingly.

It's Obama's job to get 2.5 Million people working its our job to house them.

Lets make it happen.
Nick