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