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[Post New] 05/04/2010 16:32:06 Subject: Concessions [Up]
Tammy Bondurant

Joined: 05/04/2010 16:21:49
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Most of our properties try to price the units right, then do not offer any concessions. What is your best advise on how to sell without offering a concession when most of your competition is?
[Post New] 05/04/2010 16:56:03 Subject: Re:Concessions [Up]
Clay Reed

Joined: 03/07/2010 08:12:06
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Are you on a revenue management program like LRO or Yieldstar? What is your occupancy compared to your comps? Are you meeting and exceeding your budget? When we switched from concessions to effective rent pricing, it was a matter of educating the consumer.
[Post New] 05/05/2010 14:22:43 Subject: Concessions [Up]
Diane Botson

Joined: 03/03/2010 11:34:09
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Concessions are common in the Philadelphia market; however, my company chooses not to offer concessions. Instead, we use amenity based pricing which takes into account all factors found on a comparison grid to find the best market rent for our product.
[Post New] 05/09/2010 11:13:52 Subject: Re:Concessions [Up]
TAWNY SCHNURBUSCH

Joined: 05/09/2010 11:10:21
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We have used conessions as a method of giving and getting in the negotiation process. The concession typically covers the amount of TI that the tenant will need to get the store open for business.
[Post New] 06/24/2010 06:40:39 Subject: Re:Concessions [Up]
Paris Evans-Robinson

Joined: 06/24/2010 06:32:36
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Certain areas in the Atlanta market is so heavily saturated with new contruction or existing office space that multiple concessions are offered to lease.
[Post New] 09/10/2010 19:07:58 Subject: Re:Concessions [Up]
Michael Polley

Joined: 09/10/2010 19:01:02
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We do offer concessions, especially today in areas where vacancies and competition are highest. We market for the best lease rate and include concessions, commissions and T.I.'s as a cost of doing business.
[Post New] 09/12/2010 13:01:06 Subject: Re:Concessions [Up]
Glenn Bellovin

Joined: 09/12/2010 12:54:11
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In our multifamily properties in the Southwest, we have been migrating away from concessions and towards effective rent based pricing either through manual adjustments or using a revenue yield management system. In some markets we have been offering limited up front concessions as a look and lease special.
[Post New] 09/13/2010 12:25:17 Subject: Re:Concessions [Up]
Anna DiSabato

Joined: 09/13/2010 11:57:35
Messages: 2
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Much of the Phoenix market is offering at least one month free, even up to 3 months free in some areas. We have tried to migrate away from giving anything more then 2 weeks free, but it has been a bit difficult to compete obviously. We have refused to do renewal concessions and although I was concerned we would be unable to stabilize if we did not "go with the flow", the truth is we have been successful. I spent much of my time working with the property managers to truly understand effective rent and look at their income from my prospective. I think this really helped them understand what a concession does to our bottom line and why I need them to focus on their ability to sell.
[Post New] 09/21/2010 14:54:40 Subject: Re:Concessions [Up]
Justin Wald

Joined: 09/21/2010 14:08:59
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My property has been offering concessions for over 3 years and just recently stopped doing so by just adjusting the market values to refelct what the pricing should be compared to my comps. I have 5 comps with-in 2 miles of me that are still offering cencessions. We have recieved some push back from prospects about not offering concessions but have gotten the lease by first having our rents comparable and by educating the prospective resident about what better shape they'll be in at renewal time. For example we use to look at renewal based on the elevated market value and our residents we're worried we would increase them market which was normally $200+ more. When a resident is worried about a renewal they normally will look around for another apartment just in case this happens.
[Post New] 09/27/2010 11:46:44 Subject: Re:Concessions [Up]
Kellie DeVilbiss

Joined: 09/12/2010 16:40:32
Messages: 2
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Concessions are used across our portfolio when it is appropriate. Several factors are taken into consideration when deciding between concessions or net effective:
1) is this a short term blip on the screen in the submarket? If so, concession.
2) is the property goingt o be sold or refinanced in the next 6 -12 months? If so, often the burn off of the concession upfront will be a better story to a buyer or lender that an "effective rent".
3) is this a long term hold and the property is competetive with other property types in the submarket? If so, effective rents are cleaner and give a clearer picture of what i happening in the market.
[Post New] 11/07/2010 07:31:28 Subject: Re:Concessions [Up]
Jeff Harmon

Joined: 11/03/2010 18:52:47
Messages: 4
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Unfortunately, concessions are a necessary evil when absolutely needed and used. They can be a crutch that hinders the ability to actually sell and close leases. Try to focus on accountability and try taking concessions away for a week and monitor progress. You could also try paying extra commissions on leases without concessions. Nevertheless, you must also focus on property appearance, cleanliness, and excellent looking models. If you offer a SOLID product, the leasing should come easy without concessions. Our VP told me once, this industry is NEVER easy. It's always a challenge. Good luck.
[Post New] 10/18/2011 13:56:26 Subject: How does it look on paper? [Up]
Warren Lizio

Joined: 06/08/2011 22:00:53
Messages: 2
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You also have to consider what your objective is for your property and how owners, or potential buyers, will interpret your ledger and balance sheet. Also, you want to think about your marketing. Listening to a story on Car Salesmen, one of them had a signature tag-line introduction "Are you here for the big sale?" You may be able to use something like that in residential leasing, "Are you calling about our rent special?!" How exciting!
[Post New] 08/26/2012 15:23:37 Subject: Re:Concessions [Up]
Richard Kinney

Joined: 08/26/2012 15:10:24
Messages: 1
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Concessions have become a necessary evil, I feel that a portion of the industry has fueled the "concession fire", including myself. In older metro areas it has become one of the few marketing tools older distressed properties have, a property with no marketing budget can always give away "free rent". Thoughts??
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