Books to BricksA home buying program for

student residents

Presented by:

Brian Hellwig, Security and Apartment Manager

(bhellwig@kent.edu)

Rick Schneiderman, Sr. Fiscal Manager

(rschnei3@kent.edu)

www.Reslife.net

November 2008

Brief History of AllertonBrief History of Allerton

• 224 Garden Style Apartments built in 224 Garden Style Apartments built in two phases in 1963 and 1966two phases in 1963 and 1966

• 12 Buildings12 Buildings• Built in response to changing Built in response to changing

demographics of college students in demographics of college students in the 1960’sthe 1960’s

• Intended purpose was to house Intended purpose was to house students with familiesstudents with families

Years 2000 - 2006Years 2000 - 2006

• KSU Residence Services, utilizing bond KSU Residence Services, utilizing bond funds, invested over $136,000,000 to build funds, invested over $136,000,000 to build eight new residence halls and refurbish all eight new residence halls and refurbish all other existing traditional hallsother existing traditional halls

• Allerton was not includedAllerton was not included

• Continuing decline in occupancy, PLUS real Continuing decline in occupancy, PLUS real and perceived deficiencies at the complex and perceived deficiencies at the complex (price, amenities, facilities, intangibles)(price, amenities, facilities, intangibles)

Allerton Task ForceAllerton Task Force

• In 2006, a task force was appointed by the In 2006, a task force was appointed by the Director of Residence ServicesDirector of Residence Services

• The Charge of the task force was to The Charge of the task force was to research the issues surrounding Allerton research the issues surrounding Allerton and seek ways to stabilize occupancyand seek ways to stabilize occupancy

• Task Force used a SWOTS analysis and a Task Force used a SWOTS analysis and a survey of residents to gain baseline data survey of residents to gain baseline data and generate a plan of actionand generate a plan of action

• Also surveyed local apartment complexes Also surveyed local apartment complexes for prices, amenities, lease terms, etc. for prices, amenities, lease terms, etc.

Task Force FindingsTask Force Findings

• The “price and value” of Allerton was by The “price and value” of Allerton was by far the biggest drawback and concern of far the biggest drawback and concern of residentsresidents

• Facilities, including outdoor maintenance Facilities, including outdoor maintenance were also identified as needing attentionwere also identified as needing attention

• Programming and Safety and Security Programming and Safety and Security were rated highly by residentswere rated highly by residents

• Needed more detailed data from Allerton Needed more detailed data from Allerton regarding occupancy levelsregarding occupancy levels

Action Plan Action Plan

StrategyStrategy• Focus on ValueFocus on Value• Focus on high visibility, lower cost Focus on high visibility, lower cost

repairs and refurbishmentsrepairs and refurbishments• Build on strengths of programming to Build on strengths of programming to

enhance communityenhance community• Develop enhanced reporting tool to Develop enhanced reporting tool to

analyze Allerton occupancyanalyze Allerton occupancy

Action Plan Implementation – Action Plan Implementation – FY07FY07• Price Freeze on rent at $690 for 2BR and $660 for Price Freeze on rent at $690 for 2BR and $660 for

1 BR1 BR• Huge increase in marketing via Departmental View Huge increase in marketing via Departmental View

Book, and Web Page presence (focus on value, Book, and Web Page presence (focus on value, community, and convenience)community, and convenience)

• New signage, basketball court refresh, new model New signage, basketball court refresh, new model room, advocate to university for increased room, advocate to university for increased attention to grounds ($30k), painting and rust attention to grounds ($30k), painting and rust abatement.abatement.

• Monthly Unit (MU) reporting for enhanced data Monthly Unit (MU) reporting for enhanced data analysisanalysis

• Reduce heating costs through education Reduce heating costs through education

Results – FY 2007Results – FY 2007

• Occupancy Rate – 74.8%Occupancy Rate – 74.8%

• Highest Monthly Occupancy Rate – 84.4%Highest Monthly Occupancy Rate – 84.4%

• Lowest Monthly Occupancy Rate – 57.4%Lowest Monthly Occupancy Rate – 57.4%

• Total Revenue - $1.012 MillionTotal Revenue - $1.012 Million

• Highest Monthly Revenue - $98,327Highest Monthly Revenue - $98,327

• Occupancy change from FY06 – (2.8%)Occupancy change from FY06 – (2.8%)

• However, the decline was lowest in past 3 However, the decline was lowest in past 3 yearsyears

Additional ValueAdditional Value

• Task Force already had endedTask Force already had ended• Still focusing on the value equationStill focusing on the value equation• Wanted to reduce turnover and increase Wanted to reduce turnover and increase

occupancy; how to get people to stay?occupancy; how to get people to stay?• Provide monetary incentives for renting Provide monetary incentives for renting

at Allerton but Residence Services at Allerton but Residence Services couldn’t afford to reduce rent; therefore couldn’t afford to reduce rent; therefore idea for home equity program evolvedidea for home equity program evolved

Books to Bricks ProgramBooks to Bricks Program

• Home Buying program for Allerton ResidentsHome Buying program for Allerton Residents• Partnership with Century 21 Prestige Realty – Partnership with Century 21 Prestige Realty –

large presence in NE Ohiolarge presence in NE Ohio• Residents earn equity credits by signing and Residents earn equity credits by signing and

renewing a lease, and also earn monthly creditsrenewing a lease, and also earn monthly credits• After residents graduate or leave Allerton After residents graduate or leave Allerton

Apartments, they may exchange their accrued Apartments, they may exchange their accrued equity credits towards the down payment on a equity credits towards the down payment on a homehome

• Must use Century 21 Prestige Realty as their Must use Century 21 Prestige Realty as their buying agentbuying agent

What is Books to Bricks?What is Books to Bricks?

• Up to $1,000 towards Up to $1,000 towards purchase of homepurchase of home

• Good for up to 4 Good for up to 4 years after moving years after moving outout

• Reduction of “brain Reduction of “brain drain” of NE Ohiodrain” of NE Ohio

• Discounts for movingDiscounts for moving

• Educational Home Educational Home Buying Programs:Buying Programs:

– Mortgage Basics Mortgage Basics – Title Basics Title Basics – Home Inspection Home Inspection

BasicsBasics

How It Works…How It Works…

• 1 credit = $1 1 credit = $1

• 300 credits for signing/renewing 300 credits for signing/renewing leaselease

• 20 credit for each month of residency20 credit for each month of residency

• 540 credits earned after one year 540 credits earned after one year

• Credits good for four (4) years after Credits good for four (4) years after moving outmoving out

Home Buying Credit Home Buying Credit ScaleScaleHome Sales PriceHome Sales Price

$0 - $49,999$0 - $49,999

$50,000 - $89,999$50,000 - $89,999

$90,000 - $139,999$90,000 - $139,999

$140,000 - $189,999$140,000 - $189,999

$190,000 - $249,999$190,000 - $249,999

$250,000 & up$250,000 & up

Allowable B2B Allowable B2B CreditsCredits

$0$0

$300$300

$500$500

$700$700

$850$850

$1,000$1,000

Benefits to Real Estate Benefits to Real Estate PartnerPartner• Steady pipeline of potential buyers (over Steady pipeline of potential buyers (over

200 leases signed per year at Allerton)200 leases signed per year at Allerton)• Develop relationships with residents now Develop relationships with residents now

(home buying seminars at Allerton) and in (home buying seminars at Allerton) and in future (long-term relationships, referrals)future (long-term relationships, referrals)

• Exclusive realtor for Allerton ApartmentsExclusive realtor for Allerton Apartments• SMART BUSINESS – Commissions on a SMART BUSINESS – Commissions on a

$150,000 house total approximately $150,000 house total approximately $4,500 - $9,000 for the agent/broker (split $4,500 - $9,000 for the agent/broker (split evenly). After equity credit of $700 there evenly). After equity credit of $700 there are still significant earningsare still significant earnings

Benefits to KSU and Benefits to KSU and ResidentsResidents• Residents earning important dollars Residents earning important dollars

for home purchasefor home purchase• Rent money isn’t being “thrown away”Rent money isn’t being “thrown away”• Residents stay in area to stem “brain Residents stay in area to stem “brain

drain” in Ohio. (drain” in Ohio. (important strategic important strategic initiative by KSU Presidentinitiative by KSU President))

• Stabilize and potentially grow Allerton Stabilize and potentially grow Allerton occupancyoccupancy

July 2007 – Great July 2007 – Great ExpectationsExpectations• Rent frozen again at $690 for 2 BR Rent frozen again at $690 for 2 BR

and $660 for 1 BRand $660 for 1 BR• Two new large apartment complexes Two new large apartment complexes

begin construction near Kent campusbegin construction near Kent campus• Books to Bricks program Books to Bricks program

implemented July 1, 2007implemented July 1, 2007• Occupancy at Allerton plummets to 2 Occupancy at Allerton plummets to 2

year low of 54%year low of 54%

Onward – FY08Onward – FY08

• August Occupancy – 66.8%; this was August Occupancy – 66.8%; this was 5.9% less than August 20065.9% less than August 2006

• September Occupancy – 91.7%; this September Occupancy – 91.7%; this was the highest monthly rate in over 2 was the highest monthly rate in over 2 yearsyears

• September revenue eclipsed September revenue eclipsed $100,000; first time in over 2 years$100,000; first time in over 2 years

• First time any building was 100% First time any building was 100% occupied in a monthoccupied in a month

Books-to-Bricks Kick-OffBooks-to-Bricks Kick-Off

Virginia Edwards of Century 21 Realty talks with Allerton residents about the new program designed to help them purchase homes of their own at the "Books to Bricks" picnic last night.

Photo by Leslie Cusano | Daily Kent Stater

September 5, 2007

Official Kick-Off to Books to Bricks

was introduced to Allerton residents.

•Covered by campus Newspaper

•Covered by campus TV-2

•Reps from Century 21 Prestige Realty Group

•Reps from Residence Services

Educational Educational ProgrammingProgramming• Century 21 and their Associates Century 21 and their Associates

PresentedPresented– Anything and everything to know about Anything and everything to know about

buying a homebuying a home•MortgagesMortgages

•Title CompanyTitle Company

•Home InspectionsHome Inspections

•1st Program held on Thursday, March 271st Program held on Thursday, March 27thth

Results through April Results through April 20082008• YTD Occupancy – 85.9%; this is 8.5% YTD Occupancy – 85.9%; this is 8.5%

higher YTD than FY07higher YTD than FY07• Individual Bldg Occupancy ranges Individual Bldg Occupancy ranges

from 80.7% to 91%from 80.7% to 91%• Seven straight months of over $100k Seven straight months of over $100k

revenuerevenue• Estimated FY08 Revenue is $1.15 Estimated FY08 Revenue is $1.15

million vs. $1.012 million last year. million vs. $1.012 million last year.

Books to Bricks DataBooks to Bricks Data

• Over 250 residents enrolledOver 250 residents enrolled• Approximately $110,000 in credits have Approximately $110,000 in credits have

been earned by residentsbeen earned by residents• Interest in program appears strong as at Interest in program appears strong as at

least 4 residents have met with C21 Reps least 4 residents have met with C21 Reps to discuss home buying optionsto discuss home buying options

• It will take a few years to quantify actual It will take a few years to quantify actual conversions of student residents conversions of student residents transitioning from Books to Brickstransitioning from Books to Bricks

Establishing a Realty Establishing a Realty PartnershipPartnership• Our focus was keeping residents in NE Our focus was keeping residents in NE

Ohio; so it was important to select Ohio; so it was important to select company with strong local tiescompany with strong local ties

• Wanted a well-respected company with Wanted a well-respected company with national affiliations if possiblenational affiliations if possible

• Have a business plan; demonstrate the Have a business plan; demonstrate the benefits of a partnership with detailed benefits of a partnership with detailed financial analysesfinancial analyses

• Know what you want and expect out of the Know what you want and expect out of the relationship, but be open to the expertise relationship, but be open to the expertise that the realty firm offers that the realty firm offers

Costs of Books to BricksCosts of Books to Bricks

• Basically just the labor costs of two Basically just the labor costs of two Residence Services employees to set up Residence Services employees to set up and administer the programand administer the program

• Only hard costs were the printing Only hard costs were the printing expenses for brochures - $1,500; and expenses for brochures - $1,500; and refreshments for home buying seminarrefreshments for home buying seminar

• C21 paid for all marketing design costs, C21 paid for all marketing design costs, food and drink for kick-off party; time and food and drink for kick-off party; time and labor of real estate expertslabor of real estate experts

Key PointsKey Points

• Obtain administrative permission inside Obtain administrative permission inside and outside of your housing programand outside of your housing program

• Obtain the blessing of your general Obtain the blessing of your general counsel/legal officer before entering into counsel/legal officer before entering into an agreement or offering this programan agreement or offering this program

• Marketing – sooner the better, and keep Marketing – sooner the better, and keep interest piqued with periodic award interest piqued with periodic award certificates, seminars, newsletter pieces, certificates, seminars, newsletter pieces, reciprocal web site links, etc.reciprocal web site links, etc.

Key PointsKey Points• Structure program to encourage lease Structure program to encourage lease

renewals; it takes 2 years to earn $1,000 B2B renewals; it takes 2 years to earn $1,000 B2B equity creditsequity credits

• Maintain regular communication with your Maintain regular communication with your realty partner; invite them to present a realty partner; invite them to present a program on home buying basics to residents program on home buying basics to residents

• Select a partner who is genuinely interested in Select a partner who is genuinely interested in the program and understands that a multi-the program and understands that a multi-year commitment is necessary (e.g. – B2B year commitment is necessary (e.g. – B2B credits are good 4 years from date of Allerton credits are good 4 years from date of Allerton departure)departure)

Future Possibilities…?Future Possibilities…?

• Expanding to Traditional Residence Expanding to Traditional Residence Halls (students and their parents?)Halls (students and their parents?)

• Expanding to University faculty and Expanding to University faculty and staffstaff

Submitted by:Submitted by:

Brian Hellwig received his undergraduate degree in Political Science Brian Hellwig received his undergraduate degree in Political Science from Heidelberg College and earned his Masters in Higher Education from Heidelberg College and earned his Masters in Higher Education Administration and Student Personnel from Kent State University Administration and Student Personnel from Kent State University where he is currently employed in the dual roles of Apartment where he is currently employed in the dual roles of Apartment Manager for family and student Manager for family and student

Rick Schneiderman received his undergraduate degree in Accounting Rick Schneiderman received his undergraduate degree in Accounting from the University of Akron and earned his Masters in Public from the University of Akron and earned his Masters in Public Administration from The Ohio State University.  He has over 13 years Administration from The Ohio State University.  He has over 13 years in Higher Education Budgeting and Finance, including the last four in Higher Education Budgeting and Finance, including the last four years spent as the Senior Fiscal Manager in the Department of years spent as the Senior Fiscal Manager in the Department of Residence Services at Kent State University Residence Services at Kent State University

  

Books-to-BricksBooks-to-Bricks

Any Questions? Any Questions?

Brian and Rick would be happy to Brian and Rick would be happy to answer any questions you may answer any questions you may have regarding this program. have regarding this program.

bhellwig@kent.edubhellwig@kent.edu

rschnei3@kent.edurschnei3@kent.edu