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Creative asset management breathes potential into property

Khoi Luu — Thu, 14 May 2009 16:00:00 GMT

Kaplan Acquisitions and Development built a 392-unit, Class A apartment community in Rogers, Arkansas that opened in February 2007. The luxury apartment homes featured black designer appliances, microwaves, granite countertops, crown molding, 10’ ceilings, slate entryways, garden tubs and showers, brushed nickel fixtures, and contemporary lighting fixtures.

The community boasts an expansive swimming pool with waterfall and beach entry, hot tub, attractive cabana area and a fully furnished outdoor gas kitchen. The residents also enjoy a billiards room, a 50-seat movie theater, coffee café and a state-of-the-art fitness center. This premiere property was in a class by itself.

The market was solid, the property was located near the world headquarters for Wal -Mart, and there were no other significant Class A-type communities in the immediate region. It should have been a nobrainer: the place would be full in eight months and what was built at $81,000/door would sell for $125,000/door.

Eight months later, however, the world changed. The sub-prime lending fiasco was in full bloom, capital was vanishing quickly, and the institutional equity lenders were looking for someone to throw under the bus. Many apartment communities, new or “pre-owned,” were finding themselves in the same position, fighting over the limited amount of apartment traffic, rental rates being slashed to the bone, marketing costs going through the roof and expenses exceeding income. Conventional management tactics were simply proving ineffective.

Born out of this tumultuous circumstance, was a management idea, to run the community like a highend corporate lodging resort. Scoffers abounded. Analysts were skeptical. Investors were incensed.

But no one had a better idea. After all, wouldn’t a traveling professional be more likely to enjoy the comforts of their own 1,000 square foot apartment – fully furnished with all of the amenities of a Class A community - than the confines of a 12’ x 15’ cookie cutter hotel room with a snoring roommate?

“Corporate units” in the multi -family industry are plentiful, but what about marketing a conventional apartment community as a corporate lodging resort and available at a fraction of the cost of a conventional highend hotel? Is that possible?

Fast forward 12 months. Today, the property is 95 percent occupied, houses one of the largest accounting firms in the world engaged in a long term project with Wal -Mart, and the property is cash flowing beyond the projections of the original proforma. Several hotel chains are closely eyeballing this community that has proven there is an unexplored housing niche that combines Class A apartment product with “Four Seasons” service to produce a corporate housing resort at a fraction of the cost of high-end hotels.

While it may be true that investors, analysts, and owners are well-versed in the dynamics of effective site management, more often than not, they are agoraphobic – afraid of ideas that are outside the confines of conventional multi -family management wisdom. This case study punctuates the point that success can arrive in a radical and timely change in the way assets are managed – and with nothing more. Those of us that pursue effective stewardship need to remain cognizant of the limits of conventional management and remain resilient and willing to pursue unconventional management solutions where appropriate.

14-May-09 11:00 AM

Local groups help veterans get back on feet

Khoi Luu — Sat, 02 May 2009 18:00:00 GMT

A U.S. Army veteran of the Iraq war and his family are getting a new place to call home after losing their house to foreclosure.

Chris and Corina Esquivel returned to the United States from Germany nearly a year ago but did not get the homecoming they were hoping for.

The family was met by a tough U.S. economy and even tougher job market.

The Esquivels have been living with a relative since Chris Esquivel lost his job and their Gilbert home was foreclosed on in February.

He said it is not uncommon for soldiers returning from active duty to have trouble readjusting to everyday life.

“For any soldier, it’s the reintegration back into the private sector that’s the hardest thing,” Esquivel said.

The couple and their two children lived in Germany for almost three years, and leaving the Army base was a big change.

“You’re in a family overseas, and you come back here and you’re on your own,” Corina Esquivel said.

Thanks to two local organizations, the family now has someone fighting for them.

Kaplan Management Co. and Project We Remember will provide free housing for one year for the Esquivels and four other United States veterans.

Kaplan celebrated the grand opening of The District at Mountain Vista in Mesa, its latest luxury apartment complex, Friday with a ribbon-cutting ceremony and a tribute to U.S. veterans.

Matt Summers, president of the company, wanted to honor U.S. veterans by providing free housing for one year after they return home from abroad.

“This is a hand up, not a handout,” Summers said. “We want to inspire other management companies to do the same thing.”

He is so happy with the current project, Kaplan plans to implement a similar plan in Texas, Massachusetts and Arkansas within a year.

Summers said that when it comes to helping others, “It’s about doing, not just about talking.”

Summers contacted Project We Remember, a local nonprofit organization that was founded in 2006 by Vern Bagley, to find worthy veterans whom he could help.

Bagley is a Vietnam veteran who started the organization to provide support for U.S. veterans.

He said he learned firsthand that veterans do not always get the support system and honor they deserve after coming home from serving their country.

Bagley was criticized and condemned after returning to the United States from Vietnam in 1968. He created Project We Remember in 2006 to help ensure that others would not have to endure similar treatment.

“We are always looking for people who are trying to improve their lives and have just run across an unfortunate circumstance,” Bagley said.

The nonprofit group utilizes the VA Hospital, Arizona Department of Veterans Services and Veteran Centers to find candidates.

Bagley said his organization is funded purely by individual donations and does not receive any federal funds.

The experience has been like a dream for the Esquivels, who say the whole experience seems to have happened overnight.

Chris Esquivel is starting a new job in the coming week and said he plans to utilize his Army benefits to go back to school.

The Esquivel family is confident the next year will be a real opportunity for them to get back on their feet.

“What can you do but hit the ground running?” Esquivel said.

2-May-09 1:00 PM

Ranch At Pinnacle Point Shifts Strategy, Fills Up

Mon, 20 Apr 2009 17:00:00 GMT

A change in its business model helped the Ranch at Pinnacle Point go from 31 percent occupied to nearly full in a little more than a year.

Originally built as a Class A apartment complex with a goal of attracting short-term, corporate suite clientele, owner Kaplan Acquisitions and Management Inc. of Houston, Texas, decided to convert its marketing strategy to pitching the Ranch as a corporate resort.

The typical corporate suite client would only sign a 30- to 90-day lease, which led to constant flipping of units. Since shifting its model, the Ranch has only signed 12-month leases for corporate clients and is exceeding its original pro forma for revenue.

"They can move people in and out and having that unit available when you need to fly in and talk to Wal-Mart is a terrific place to stay," said Kaplan's Matt Summers.

Now 95 percent occupied, the Ranch tenants are made up of about 45 percent corporate clients and 55 percent conventional renters. Summers said the key to the turnaround was community involvement.

"We went with the idea and started pitching it to the major employers," Summers said. "Wal-Mart was interested and threw a major company our way. We started filling up."

Summers said the Wal-Mart client is one of the world's largest accounting firms working on a long-term project with the world's largest retailer.

With corporate rates for fully-furnished apartments ranging from $1,650 for a one-bedroom to $2,800 for a three-bedroom ranging from 654 SF to 1,349 SF, even the top price is less than the average of $100 to $125 per night or more at extended stay hotels.

The Ranch features a large swimming pool and hot tub, outdoor gas grills, a billiards room, fitness center with free weights and a large movie theater available for booking by residents.

"It's a huge savings for them," Summers said. "We're offering a large apartment at half the cost. It's infinitely better for them with access to all the amenities and we host functions for both conventional and corporate clients."

20-Apr-09 12:00 PM

Property manager increases occupancy from 31% to 95% by converting apartments to corporate housing

Khoi Luu — Fri, 13 Mar 2009 17:00:00 GMT

Rogers, Ark.—The M. Kaplan Cos. LLC, a Houston-based owner, operator and developer of multifamily properties, recently converted its Ranch at Pinnacle Point, a 392-unit Class A apartment community in Rogers, Ark., into a corporate housing solution that enjoys a 95 percent occupancy rate.

Kaplan Acquisitions and Development, the development arm of M. Kaplan Cos., had completed the project in February 2007 and expected to see solid returns.

“At the time this property was developed, the market conditions in Northwest Arkansas were really good,” notes Matthew Summers, president of management at Kaplan Management Company Inc., the property management division of M. Kaplan Companies. The area saw extensive job growth and an upswing in the single-family market, and it was an overall good area to develop assets, he says.

When the sub-prime crisis hit, however, the community was sitting at 31 percent occupancy after nine months of leasing, and the shadow market was deeply affecting apartment fundamentals.

“I took a look at the asset and the surrounding community and what the anchors were and saw it was an opportunity to use innovative ideas to conform the asset to what’s there instead of trying to fit the box” of what was already there, Summers tells MHN.

Located in close proximity to the world headquarters of Wal-Mart, Ranch at Pinnacle Point, designed by Houston-based Clerkley Watkins Group, became the answer to corporate housing. As Summers explains, the community would provide corporate residents with the same amenities as a hotel while charging less, all the while allowing Kaplan to meet their pro forma rents. Furthermore, he says, the company began by renting furniture for its corporate suites, but later recognized that the return on investment took only four to five months.

“The key to the success of the idea is the infrastructure around [the property],” which includes the major area employers, notes Summers. This particular property, he says, “doesn’t work in typical corporate suite settings for someone who comes in for two to three months. It’s for something that’s a little more permanent.”

Currently, 45 percent of the community houses corporate residents—who work for employers with year-long leases who may transition employees during that period of time. The corporate residents are offered the same amenities as more permanent residents.

The Ranch at Pinnacle Point offers one-, two- and three-bedroom units ranging in size from 654 to 1,349 sq. ft. Monthly rents range from $689 to $1,350.

Residences at the Ranch at Pinnacle Point feature black designer Maytag appliances, self-cleaning ovens, double compartment sinks, walk-in closets, oversize tubs, and in-unit washers and dryers. In addition, residents have access to storage units, carports and garages with remote access.

Community amenities include a fitness center; a pool area with a spa, private seating, gas grills and an outdoor fireplace; a game room with a billiards table; and a movie theater that has a complementary movie library and that can be reserved for private functions.

With the economic crisis looming over the country, Summers believes now is the time to embrace change. “You have to. The days of throwing out an advertisement and sitting back and waiting for traffic to walk through the door are over. You have to be aggressive in going after traffic,” he asserts. “You have to individualize your management strategy and see what the need is for the asset. If you don’t have people at the helm who know how to run the assets, most will die on the vine.”

In distressed times, says Summers, management becomes more crucial than at any other time. “It really gives us an opportunity to do what it is we do on the management side—manage the assets and get them to produce, make them achieve what it is they are supposed to be doing.”

He also notes that smaller management companies can benefit in the downturn, as Kaplan—who currently has 5,000 units under management—is doing. “I think what you’ll start to see is a trend in multifamily management that goes toward managers that don’t have huge portfolios and can devote more time and attention to assets.”

13-Mar-09 12:00 PM

Another knockdown

Khoi Luu — Fri, 04 Apr 2008 05:00:00 GMT

Another North Dallas apartment complex has a date with the bulldozers.

Demolition crews are preparing to knock down the 200-unit Park Forest apartment community on Greenville Avenue north of Forest Lane.

Built in 1968, the rental complex is owned by a Houston-based apartment firm, M. Kaplan Cos.

Kaplan officials did not respond to a request for information about the property.

But the company's Web site listing of future projects includes a 350-unit apartment project to be called The District on Greenville.

In the 12-month period ending with March, more than 4,400 D-FW area apartments were demolished.

4-Apr-08 0:00 AM

DeBartolo to develop $150 million mixed-use project in Mesa

Khoi Luu — Fri, 04 Apr 2008 05:00:00 GMT

Mesa - DeBartolo Development in Tampa, Fla. (Edward Kobel, pres.) plans to develop a $150 million retail-residential-hotel project at the northwest corner of US 60 and Signal Butte Road in Mesa. At one time, DeBartolo Development planned to develop the 114-acre project in a venture with USAA Real Estate Co., a subsidiary of USAA in San Antonio, Tex. As it turns out, the USAA/DeBartolo venture sold 94 acres of the site to a company formed by DeBartolo Development for just under $28.747 million. The venture sold the other 20 acres to a company formed by DeBartolo Development and The M. Kaplan Cos. in Houston, Tex. (Michael Kaplan, principal). The DeBartolo/Kaplan company paid just over $8.555 million to purchase that parcel, which is planned for 384 apartment units (see related story below). The USAA/DeBartolo venture paid just under $24.8 million to purchase the 114-acre parcel in February 2006. No word on why USAA opted out of the venture. DeBartolo Development plans to develop 800,000 sq. ft. of retail space and two hotel sites. The hotel pads, targeted for a total of 300 rooms, are under contract to be sold to a single buyer who will develop national brands on the property. That deal is slated to close in six months. No further details on that transaction. The retail component, being called Mountain Vista Marketplace, will be developed in two phases. Roughly 375,000 sq. ft. will be built in the first phase. CLC Associates in Scottsdale is designing the plaza. Construction is just starting. Vratsinas Construction Co. to serve as contractor. Ed Beeh, Dan Neeson and Chuck Gibson of Staubach Retail in Phoenix have the marketing assignment. Target Corp. in Minneapolis, Mn. will be the anchor tenant with a 177,500-square-foot Super Target store. Records show the DeBartolo entity sold Target Corp. its 15-acre site for $10 (ten dollars). Target will build and own the store, which is expected to open by next March. Tenants who have committed to lease space in the center include: Dick's Sporting Goods, Marshall's, Petco, Shoe Carnival and Anna's Linens. Pads for freestanding buildings are being leased to Taco Ball and Bank of America. Pads are under contract to be sold to Cracker Barrel, Burger King and TruWest Credit Union. DeBartolo is looking for junior tenants needing from 5,000 sq. ft. to 55,000 sq. ft. and in-line tenants needing from 1,000 sq. ft. to 5,000 sq. ft. Pads are available for ground lease that are suitable for freestanding buildings ranging from 2,000 sq. ft. to 7,200 sq. ft. The deal is the first in the Valley for the privately-held DeBartolo Development. The company is looking for additional retail and mixed-use development opportunities in the Phoenix area. USAA Real Estate Co. is a subsidiary of USAA, an insurance and diversified financial services company. Erin Nellis is the contact for DeBartolo Development in Scottsdale . . . call her at (480) 429-6066. The contact at USAA Real Estate is Bruce Petersen . . . (210) 498-7259. Talk to the Staubach Retail agents at (602) 682-6000.

4-Apr-08 0:00 AM

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noemail@kapcorp.com — Wed, 12 Dec 2007 15:43:47 GMT

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Rehab

Wed, 24 Feb 2010 20:42:55 GMT

Kaplan Acquisitions, The M. Kaplan Companies' acquisitions and development subsidiary, pursues property rehab opportunities in major metropolitan areas, generally in the South from Nevada to Florida. We have rehabbed 29 projects totaling 6,865 units in Florida and Texas. Previous Rehab Projects Property City State Units Terrace at Kings Meadow Apartments Miami FL 416 Grand Oaks Apartments Riverview FL 202 Country Club Villas Abilene TX 260 Concordia Place Austin TX 74 Waterdance Apartments Austin TX 320 Apple Creek Apartments Georgetown TX 176 Indian Creek Apartments Georgetown TX 240 Sierra Vista Apartments Georgetown TX 104 Westwood Town Homes Georgetown TX 110 The Cedars of San Marcos San Marcos TX 168 Highcrest Apartments San Marcos TX 112 Villa Marina Apartments Baytown TX 284 English Village Apartments Houston TX 205 Fairwind Corporate...

Management

Wed, 24 Feb 2010 20:42:37 GMT

Kaplan Management Company, The M. Kaplan Companies' property management subsidiary, was formed in 1978 to offer fee management services for owners of multi-family properties, shopping centers, office buildings and mobile home parks. In 1984, the KMC management portfolio began to grow dramatically. By 1986, the company was fee managing 8,500 multi-family units and 2,500,000 square feet of office and commercial space. Clients included John Hancock Properties, Inc., numerous savings and loans, commercial banks and several large and small independent owners. Both management and construction services were offered to clients and commercial leasing was out-sourced to local brokers. Having been among the 25 largest management companies in Houston, Texas, our excellent reputation with both clients and employees affords us the ability to attract the best experienced and knowledgeable people in our industry. We have managed 83 projects totaling 15,365 units in Arizona, Arkansas, Florida,...

Acquisitions

Wed, 24 Feb 2010 20:42:09 GMT

Kaplan Acquisitions, The M. Kaplan Companies' acquisitions subsidiary, pursues acquisitions opportunities in major metropolitan areas, generally in the South from Nevada to Florida. We typically seek acquisitions opportunities in infill locations and projects of 200 - 400 units. We look for markets with consistent job growth (realizing that this is cyclical, we are focused on longer-term trend), population growth, a large number (and percentage) of college-educated, relatively affluent young (single) adults, ongoing apartment demand, favorable development/regulatory climate and appropriate level of new construction activity given projected future demand. Acquisitions are opportunistic in nature and focused on a viable exit strategy. Our holding time is typically 3 to 5 years. We look for value-add opportunities that include the creation of new income streams through washer/dryer rentals, carport rentals, change-over to tenant-paid water, sewer, and trash services, telephone and...

Development

Wed, 24 Feb 2010 20:41:37 GMT

Kaplan Acquisitions, The M. Kaplan Companies' development subsidiary, pursues development opportunities in major metropolitan areas, generally in the South from Nevada to Florida. We typically seek development opportunities in infill locations for projects of 200 - 400 units. Kaplan Acquisitions develops vacant land as well as redevelops existing apartments. We have experience developing in markets with great barriers to entry whether governmental or sensitive public issues. We look for markets with consistent job growth (realizing that this is cyclical, we are focused on longer-term trend), population growth, a large number (and percentage) of college-educated, relatively affluent young (single) adults, ongoing apartment demand, favorable development/regulatory climate and appropriate level of new construction activity given projected future demand. Kaplan Acquisitions' current target markets include Austin, Dallas, Houston, Phoenix, San Antonio, Orlando, Charlotte, Washington DC,...

Profiles

Wed, 24 Feb 2010 20:40:54 GMT

The M. Kaplan Companies, LLC and Kaplan Management Co., Inc. team is a cohesive group of seasoned professionals who have a successful formula for property development, acquisition and fee management adding value through rehab, creation of new income streams, controlling operating expenses and increasing rents. Our organization continues to grow in a controlled and structured manner. Operating controls include annual/monthly preparation of budgets which detail income, expense and capital items for each property. Extensive construction experience allows us to make quick and knowledgeable cost-saving decisions. Michael Kaplan, CEO Has over 32 years experience in multi-family acquisition, development, management and construction. Mr. Kaplan began his career in a supervisory role with The Finger Companies of Houston, where he was responsible for managing 6,000 multi-family units. As an owner and operator during the past 23 years, Mr. Kaplan oversees all activities including...

Stone Mist Apartments

Tue, 10 Nov 2009 22:25:15 GMT

10901 Mist Ln Houston, TX 77070 Contact Information Phone: (281) 970-0300 Fax: (281) 970-3373 E-mail: StoneMist@KapCorp.com Office Hours Mon - Fri: 8:30 AM - 5:30 PM Saturday: 10:00 AM - 5:00 PM Sunday: Closed Description Pricing Apartment Features Community Features Floorplans Photos Map Description Stone Mist is nestled among beautiful trees in a secluded neighborhood setting, yet close to everything you need! Our superb location is convenient to Highway 290, Willowbrook Mall, Hewlett-Packard, minutes from Beltway 8, many dining options, shopping centers on FM 1960 and Cy-Fair schools. Each floorplan blends artfully orchestrated cosmopolitan luxury with classic design and traditional quality. Stone Mist offers you a unique peaceful setting. Serenity is easily found...at Stone...

The Breakers at Windmill Lakes

Thu, 04 Jun 2009 15:06:01 GMT

9750 Windwater Dr Houston, TX 77075 Contact Information Phone: (713) 910-4744 Fax: (713) 910-8218 E-mail: Breakers@KapCorp.com Office Hours Mon - Fri: 9:00 AM - 6:00 PM Saturday: 10:00 AM - 5:00 PM Sunday: 1:00 PM - 5:00 PM Description Pricing Apartment Features Community Features Floorplans Photos Map Description Your expectation of excellence is realized at The Breakers at Windmill Lakes. Enjoy beautiful lakeside views, classic styling and a superb amenity package. These beautifully appointed apartment homes offer an array of features sure to fit your lifestyle. Our location off I-45 S provides easy access to downtown, Medical Center, Beltway 8, Hobby Airport and Clear Lake. Come relax in the serenity of a community that is truly tailored to your needs. Come home to The Breakers at Windmill Lakes. ...

Westcreek at River Oaks

Fri, 20 Jun 2008 03:41:45 GMT

2049 Westcreek Ln Houston, TX 77027 Contact Information Phone: (713) 622-1001 Fax: (713) 621-7840 E-mail: RiverOaks@KapCorp.com Office Hours Mon - Fri: 8:30 AM - 5:30 PM Saturday: 10:00 AM - 5:00 PM Sunday: 1:00 PM - 5:00 PM Description Pricing Apartment Features Community Features Floorplans Photos Map Description Westcreek at River Oaks is Houston's premier rental community with a long standing reputation for excellance and service! Experience the ambiance of our secluded courtyards reminiscent of New Orleans with tranquil fountains, regal statues and majestic magnolia trees. Our perfect combination of grace and elegance makes Westcreek at River Oaks truly a timeless classic. If it is shopping you desire, the world renowned Galleria and Highland Village are within walking distance...

Parkside Apartments

Thu, 19 Jun 2008 16:55:10 GMT

12100 Highway 6 Sugar Land, TX 77478 Contact Information Phone: (281) 564-6700 Fax: (281) 564-6100 E-mail: Parkside@KapCorp.com Office Hours Mon - Fri: 8:30 AM - 5:30 PM Saturday: 10:00 AM - 5:00 PM Sunday: 1:00 PM - 5:00 PM Description Pricing Apartment Features Community Features Floorplans Photos Map Description Parkside, where living is life for those who expect exquisite craftsmanship combined with amenities and great views. Interiors are rich in design, accented with remarkable woodwork and attention to detail. Ease the stress of everyday life and enjoy the natural surroundings by taking a stroll in the park or go hiking on the adjacent nature trail. Experience unprecedented levels of service and sophistication. Parkside...where living well is made easy. Call today! Pricing ...

Villas of Timberglen Vail Map

Thu, 29 May 2008 21:57:49 GMT

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noemail@kapcorp.com — Wed, 12 Dec 2007 15:43:46 GMT

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