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Five Things To Consider When Choosing AI-Driven Proptech For Your Multifamily Operation

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Realtor explaining floor plan to couple buying a house

Elik Jaeger President & CEO at SuiteSpot Technology, frictionless facilities management PropTech for multifamily operators. 

Many multifamily operators are still making important decisions about property operations, maintenance, budgeting and more with little to no real-time data because they simply don’t have it available. Instead, they try to make sense of an unorganized “data dump” for decision-making needs. From an operations standpoint, they are playing a dangerous game. Decisions made using data that doesn’t provide real insight is nothing more than intelligent guesswork. 

AI-driven property technology systems offer multifamily operators an organized way to store their data and can be set up to provide insights automatically for decision-making needs. Some insights include: 

• Predicting future property maintenance needs and costs using basic prospective resident demographic information, weather, amenities, historic renovation data and other building data. 

• Automatically telling maintenance staff whether an appliance is under warranty when a repair request is received. 

• Sending notice to maintenance workers to repair a broken smoke detector before they go home for the night, and letting their manager know as soon as the repair is completed. 

• Automatically notifying the appropriate party if an area of expense (such as repairs) shows a dramatic variance from other properties or previous years. 

• Keeping track of tasks by third-party vendors and staff. 

How AI-Driven Proptech Works 

Most of the older software multifamily operators use only collect and store data. The data isn’t usually organized in a useful way. Imagine walking into a library with no labels on the shelves and no card catalog to direct your search. This situation is much the same. The information is there, but it takes a lot of time and energy to find and decipher it so you can take clear action at the right time. 

AI-driven proptech software collects and stores data in a way that’s actually useful, connecting the collected data with the goals of the organization and property operations. AI-driven proptech systems intelligently integrate information from all areas of the operation and use that information to find pain points, areas where attention is required, and opportunities to reduce costs or increase revenues. It can also predict future costs or projects, all in a way that’s easy to understand. 

What To Consider When Choosing An AI-Driven Proptech System 

When choosing a new AI-driven proptech system for your multifamily property, it’s important to find a system that meets your needs, is easy to use, and can help you make decisions about the future of your property. Here are five things to consider.

1. Make sure the system you choose integrates information silos. 

One of the biggest problems facing multifamily operators is that the information they have for decision-making processes is in silos. Each team or department has its own list of tasks, expenses, etc. 

The best way to make the right decisions for your property is to be able to see the big picture of all departments of your property at the same time. When choosing an AI-driven proptech system, make sure that it integrates information from all aspects of your property or properties. 

2. Look for actionable insights.

When comparing AI-driven propetch systems, make sure you choose one that not only stores and organizes data from all your departments, but that can also be set up to provide actionable insights. For example, you want your system to be able to notify you if your property’s maintenance expenses vary considerably from previous years or other properties. By spotting anomalies, you’ll know where to focus your attention to reduce costs or streamline processes. 

3. Know what predictions it can make.

AI-driven proptech systems are able to use the vast amounts of data they collect to predict future trends, such as turnover rate and maintenance needs, so you can plan ahead with budgeting, scheduling, and more. 

4. Make sure it’s actually easy to use.

The best system in the world won’t help you make decisions for your property if it’s difficult to learn and use. Make sure the system you choose is intuitive, low-maintenance, and doesn’t need constant IT support to get the job done. Ask for a demo of the system before you sign a contract, and have your IT people check out the backend of the software to make sure they can navigate it in case of problems. Ongoing tech support from the provider of the system is a big benefit you’ll want to look for as well.  

5. Make sure your team can adopt it ASAP.

Implementing a new technology takes time and effort, so you will want to look for a system that can be implemented fairly quickly. This way, there is minimal disruption to your day-to-day operations. 

Ask about time for implementation and what will be required of your team during the process. Look for and ask about potential pitfalls and address them with your proptech provider so you can be proactive and get the system implemented and adopted by your team as quickly as possible. 

Though the thought of switching your multifamily operation’s current systems to AI-driven proptech may seem daunting, it can be well worth it to your overall operations as well as peace of mind. With access to easy-to-use information, future predictions, and variance highlights, you can be more equipped to make the right decisions for your property than ever before. 


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Real Estate

Kimco Realty Adds Weingarten Realty To Its Shopping Cart

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Empty shopping cart in the supermarket shopping mall

Today Kimco Realty
KIM
, one of the largest shopping center REITs in the US, announced it was merging with Weingarten Realty
WRI
for $5.9 billion in a mix of stock (90%) and cash (10%).  Each WRI share will be converted into 1.408 newly issued KIM stock plus $2.89 in cash per share and upon closing the combined entities will have an enterprise value of just under $20 billion.

Kimco and Weingarten are highly complementary as they own high-quality grocery anchored shopping centers, and the combined portfolio will consist of 559 properties in top MSAs.

One obvious benefit for Kimco is the fact that Weingarten’s portfolio is focused on coastal and Sunbelt markets that have performed relatively well during the pandemic. This merger creates significant synergies (around $30 million to $34 million) as the costs can now be spread across a $20 billion portfolio.

In addition Kimco expects to benefit from debt synergies, thanks in large part to the fact that Kimco is using most of its currency (90%) in stock and the balance in stock (10%).

I spoke with Kimco’s CEO, Conor Flynn and he explained that this merger will generate “lower leverage and enhance the long-term NOI profile” for the combined companies.

Kimco is currently rated BBB+ with S&P and Baa2 with Moody’s
MCO
and Flynn told me that the “next leg up is the A-rating” that the CEO is hoping to see in 2022 or 2023.

The cap rate on the Weingarten transaction should be immediately accretive and I view the 5.8%-ish cap rate to be extremely attractive and Flynn told me that “you can’t get that (cap rate) in the private market right now”.

According to Nareit data there are 18 shopping center REITs with a combined market capitalization of $52.5 billion. In 2020 the shopping center sector generated the second worst total return (-27.6%) behind regional malls (that returned -37.2%).

Although shares in shopping center REITs have rallied year-to-date (+26.1%) Kimco opted to purse Weingarten so it could use its cost of capital to transact the deal (purchase price was 90% in stock).

Another catalyst worth noting is Kimco’s  ability to drive NAV (net asset value) through a collection of mixed-use projects and redevelopment. The combined company has a potential of 41 projects that consist of 34 mixed-use and 7 master planned projects that include 1.7 million square feet in retail and 9,000 multi-family units.

Conor Flynn will remain the CEO of the combined company and Milton Cooper will remain as Executive Chairman. Weingarten will have one Kimco board seat. There is a break up fee of around 2.5% but I don’t anticipate another bid given the fact that it will take a large player like Kimco to execute on such a large transaction.

KIM closed up 2.31% and WRI closed +12.5%.

I own shares in KIM.

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Real Estate

Vacation Home Checklist: Keep Your Place in Perfect Shape

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Vacation home checklist items to keep in mind

Everyone loves a good vacation, and the option of having a private retreat is one of the many perks of owning a vacation home. With the soaring demand and interest in vacation towns and affordable suburbs, there’s no better time to jump on the opportunity to own a vacation home than now.

Whether you’re taking in the last snowy days at your retreat in Whistler, BC, or you’re looking to invest in a sunny escape in Fort Worth, TX, it’s critical to close up your vacation home properly at the end of the season to ensure your property is safe when you’re back at your permanent residence. To help you get started, this eight-point vacation home checklist will make it easier to maintain your vacant home while you’re away.

Vacation home checklist: what to keep in mind

A home away from home can be a great investment and a handy retreat for vacations. However, making sure you’re sustaining and securing your property during vacant months will help prevent potential problems while you’re away. These can include:

  • Frozen pipes and leaks
  • Downed wires
  • Fallen trees
  • Pests and animals
  • Mold
  • Theft and vandalism

Thankfully, there are steps you can take to prevent these potential issues from becoming a vacation homeowner’s nightmare.

Secure your vacation home

1. Install a home security system

Leaving your home unoccupied for a season could leave it more vulnerable to burglaries or vandalism. A home security system is your first line of defense when you’re away, whether it’s your vacation home or full-time residence, and will allow you to monitor your home remotely. Some security systems can also include flood monitoring or smoke detection, giving you additional peace of mind. Depending on the system you choose, some may even come with an automation function that will allow you to schedule lights or turn a TV on and off, giving the appearance of an occupied home.

Have sufficient lighting in your vacation home checklist

2. Make sure you have sufficient lighting

To deter opportunists from approaching your vacation home at night, illuminate walkways, entryways, windows, and any dark corners with outdoor motion-sensor lights to startle would-be intruders. Indoor lighting is also critical in ensuring your home looks occupied from the outside as well. Simple outlet timers can help turn lamps on and off at intervals to make your vacant home look occupied. Keep in mind that when using outlet timers indoors that you ensure it’s visible from the outside, even through curtains or shades.

3. Consider smart locks

An essential step in your vacation home checklist is ensuring all windows, especially those on ground level, and doors have secure locks. Alternatively, you may also consider installing smart keyless locks that will allow you to grant remote access to neighbors or housekeepers. These locks provide additional control, security, and convenience, and may give you better peace of mind knowing you won’t need to keep track of any keys.

4. Adjust any blinds or shades and secure the windows

The key to deterring any surprises while you’re away is to make your vacation home look as if it’s being regularly visited, so be sure to include leaving any blinds or shades partially open in your vacation home checklist. Doing so gives the impression that your vacation home is occupied, and those passing by will see the lights through the blinds at night without being able to see fully into the house.

5. Ask your neighbors for help

Getting to know your neighbors can offer another line of defense while you’re away. Instead of leaving your key in a well-known hiding spot, give a spare set to a trusted neighbor so that they have access to the home in case of emergencies. Plus, it’ll ensure that you have another set of eyes watching over your home for suspicious activity.

Assemble a team of professionals

6. Consider hiring a landscaping service

Untidy hedges, overgrown grass, weed-infested gardens, or even overgrown shrubbery are dead giveaways of an unoccupied home. While a lakefront home in Seattle, WA might not need frequent upkeep compared to a beach house with a large lawn in Orlando, FL, investing in a routine landscaping service to maintain your property while you’re away will keep up the appearance of it being regularly visited. Plus, trimming trees and shrubs around the house will prevent them from blocking views of the house and removes any hiding spots for burglars.

Secure windows and adjust blinds in your vacation home checklist

7. Invest in a quality housekeeping service to maintain your home’s interior

If you’ll be leaving your vacation home unoccupied for an extended period, adding a regular cleaning service to your vacation home checklist will make returning even more welcoming. In fact, your housekeepers will be able to deep clean the hard-to-reach areas that are usually left out when your home is occupied for the season – like laundering the curtains, cleaning air conditioning vents, and shampooing the carpets. When you return to your vacation home, you won’t have to worry about dust build-up or stale odors from your home being left unoccupied.

8. Find a reputable property management company

The final item on your vacation home checklist is to find a property manager. If you lack a flexible schedule or don’t live locally, a property manager can relieve the everyday stress of maintaining a vacation home from afar. Property managers act as the point of contact to manage your home and can conduct regular walkthroughs to ensure your home is protected. Some companies may offer seasonal services such as preparing your home for winter.

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Median Home Listing Prices Hit Historic High Of $370,000 According To Realtor.com

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Golden Austin Texas sunset over Cityscape

Median home listing prices hit a historic high of $370,000 according to Realtor.com. Recently releasing its latest Monthly Housing Trends report, realtor.com saw year-over-year median listing prices rise 15%.

While that’s good news for sellers buyers continue to compete in markets where multiple offers often come in six figures above asking price especially in those desirable California markets like Silicon Valley and Los Angeles. Competition remains stiff with 117,000 fewer homes “being listed each month compared to recent years,” according to the report.

In Silicon Valley recently there were 76 all-cash offers on a home as it went on the market according to CNN Business. A fixer-upper in Silver Spring, Maryland a Washington DC suburb boasted 88 offers, 75 were all-cash. Fifteen of those buyers had not even set foot in the home.

Realtor.com tracked the 50 largest metros in its data. Some metros saw those listing prices shoot even higher than the national average increase of 12%. Consider that Austin’s listing prices increased by almost 40%. Right behind it was Buffalo at 28.3% and Los Angeles with a 24.8% median listing price increase. Despite these price increases homes are selling a week faster than a year ago.

Listen to realtor.com Senior Economist George Ratiu. “The trillion-dollar question is of course how long can this continue? It’s the market reflecting typical economic problems.” Ratiu goes back to econ 101 on the law of supply and demand. “I do think as we move through summer sellers will be confident to list their properties as vaccination rollouts increase.”

The news gets even worse when you dig a bit deeper. Consider that nationally, the number of homes for sale in March decreased by 52% compared to March 2020. That’s even lower than this past February when inventory fell 48.6%. Crunch the numbers and that means there were 534,000 fewer homes for sale in March 2021 compared to March 2020 as we were just beginning the pandemic.

Since Austin is the best market in the country it’s no surprise inventory declined there 72.7% from last March. Other metros with strong declines included Jacksonville, Florida down almost 71%, and Raleigh, North Carolina where homes for sale fell 70.3%.

Here’s a deeper dive into realtor.com’s numbers. The supply and demand fundamental is evident in markets across the country. The Austin metro saw the year-over-year median listing price increase almost 40 % to $520,00. Median prices rose 18 % in Phoenix to $477,000. Raleigh once considered “affordable” had a 12% increase to a median listing price of $420,000.

“I think as mortgage rates creep up as well as home prices, we will see the number of people who can qualify for mortgages dwindling,” Ratiu forecasts. If that’s true then we may see a shift away from a sellers’ market. Now that could be good news for buyers.

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