RESIDENT RETENTION
RYAN GAGER | HEARN & FLEENER
Looking for a new great first impression?
Start with your lobby
F
irst impressions can mean everything,
especially in Denver’s competitive
apartment market. What is the first
thing a potential resident sees when they
enter your apartment complex’s lobby? Walk-
ing in to a well-lit, aesthetically pleasing
lobby offers a warm, friendly atmosphere and
a place that residents can picture themselves
living. On the other hand, a run-down, out-
dated lobby can be a major disappointment
sending the wrong message to clientele.
The first step is figuring out when it is
time to update the lobby. The consensus
among professionals in the apartment indus-
try seems to be that from a design perspective
complexes should stay on top of it every 10
years, if not sooner. Over that period of time
the popularity of an initial design has faded
and a new style becomes popular. However,
this is more of a guideline than a rule as
several factors play a part in lobby renovation
including whether there is the budget for it.
According to RedPeak Investment Direc-
tor, Bobby Hutchinson, market condition
usually is the biggest timing factor in renova-
tions. “The reality is that the ability to obtain
the incremental rent that justifies the capital
spent is market dependent,” said Hutchinson.
“As a result, in a strong rental market as we’ve
seen in Denver over the last seven years,
investors have a greater likelihood of achiev-
ing higher rents through improvements and
are more inclined to do so.”
Michael Rosenberg, Property Supervisor
at Woodspear Properties agrees and notes that
competition was a driving force behind some
of his properties’ upgrades. “With rents high-
er and cash flow healthier, we decided to invest
in new lobby designs,” said Rosenberg. “Even
in Denver’s strong market, spending money
to improve the look and feel of the property
is very important, especially since we felt that
we needed to keep up with our competitors
who were also making upgrades.”
www.aamdhq.org
The redesigned lobby at 1600 Glenarm (RedPeak)
It is also important to consider all of the
elements that might need updated when
committing to a lobby renovation. When
the look of the lobby is changed, it can affect
hallways, elevators and anything else adja-
cent to it.
The key to a great lobby renovation is
not only something that is pleasing to the
eye, but also serves its purpose. While most
will judge a lobby based primarily on how
it looks, residents will get the most out of
its functionality. Lobbies should serve as an
entrance, perhaps equipped with a security
system, with mailboxes and a place to pick
up packages while not interfering with ev-
eryday traffic.
The key when looking at multiple areas that
need updated, is to see if there are any design
elements that are worth retaining and repurpos-
ing, instead of scraping everything and st arting
completely over. There are many times when
hiring a designer is out of the budget as well,
like at Mondrian Apartments, managed by
Woodspear Properties. “By using the existing
logo and artwork, we came up with a vision
that continued on the previous theme,” said
Rosenberg. “With bright colors and new con-
temporary furniture, we created a look and feel
that will give the space longevity.”
While lobby renovation can be necessary,
renovating individual units is crucial. Resi-
dents not only want to be invited in by a
welcoming entrance to their building, but
also want the space they actually are living
in to be up-to-date. From an investor per-
spective, it is also easier to calculate a return
on investment for individual units, as deter-
mined by rent before and after.
“By implementing these improvements
an investor can boost his return,” said
Hutchinson. “Most investors target a three
to five-year payback on upgrades or improve-
ments, or incremental returns of 20 percent
to 35 percent.”
Whether your property needs large im-
provements or small upgrades, it is very ben-
eficial to consider making these changes
instead of ignoring them. It’s easy to bypass
upgrades while the market is good, but it just
might pay off to update features of your apart-
ment community now, and reap the rewards
of continuing high occupancy later, if the
market turns.
JUNE 2017 • TRENDS | 39