Justin Marshall, COO of Fogelman Properties, spoke to MHN about the company’s Atlanta portfolio, as well as what’s in store for 2018.
by Timea Papp
With more than 50 years of property management and investment experience in the multifamily industry, Fogelman Properties boasts an extensive geographical footprint spanning across the Southeast, Midwest and Southwest U.S. One of the company’s mottoes is “no surprises,” which stems from the hands-on approach employed by the team in always maintaining an open line of communication with the client base.
Justin Marshall, COO of Fogelman Properties, talked to Multi-Housing News about the company’s year in review, as well as upcoming trends and investment opportunities. Additionally, Marshall expanded on Fogelman’s strategies and plans for the coming year and the firm’s contribution to the hurricane relief in the aftermath of Harvey and Irma.
With 2017 coming to a close, how would you characterize Fogelman’s year regarding multifamily investment and property management opportunities?
Marshall: Due to the availability of capital in our industry, investment opportunities have become extremely competitive. This trend certainly benefited the company on the sell side and, as we maintained discipline on the buy side, we saw a trade-off with a slightly reduced deal flow.
This year especially, we’ve seen buyers turning to smaller, regional companies for more personalized service and high-touch management as an alternative to the larger players in the market. As a well-established and recognized property management company, Fogelman has been approached by numerous investment groups for ongoing management opportunities.
Fogelman’s current stabilized portfolio in Atlanta has experienced an average occupancy of 95 percent in 2017. What were the main factors that contributed to this?
Marshall: Continued market growth, population demographics, generational preference to rent for flexibility have continued to drive rental demand, especially in Atlanta. But success in stabilizing a portfolio of 17 communities and more than 4,400 apartment homes in Atlanta was made possible thanks to the local team of 110 Fogelman associates who put forth their best in providing excellent services to our residents and clients while continuing to produce “top of the market” results.
What are some challenges that come up when entering a new market or making a new investment?
Marshall: One of the largest challenges in these emerging markets is that relatively minor changes in supply can create a major disruption in occupancy and results. We believe there will continue to be a major appetite for multifamily from both lenders and investors due to the strong fundamentals currently in place, as well as the lower risk profile that comes with multifamily investment.
Fogelman’s newest development, 1760, opened in early 2017 and is already 80 percent occupied. How do you see the current supply/demand dynamic in metro Atlanta?
Marshall: In the suburban locations of metro Atlanta, new supply has been limited due to challenges with zoning approvals from local municipalities. In the same breath, demand continues to grow in suburban markets due to in-migration, growing suburban employment centers and renters moving out of the urban core due to disproportionately high rental rates. Based on these two dynamics, suburban properties continue to outperform urban developments in rent growth and occupancy.
What do you think will be the main driver for multifamily demand in 2018?
Marshall: Demographics and generational preference to rent (for flexibility) will continue to drive rental demand and thus liquidity in the multifamily market. While property level net operating incomes may or may not be impacted by near-term oversupply in certain pockets around the country, the overall investment outlook for the multifamily sector is extremely strong, providing investors steady recurring cash flow streams without the exposure for large chunks of vacancy loss that come with the retail, office and industrial sectors.
What are some of the specific Fogelman processes that set it apart from other companies in the multifamily real estate business?
Marshall: One of the unique differences with Fogelman is our high touch, hands-on approach to management at all levels of our company. This includes executive involvement in monthly financial reviews of all properties and bi-weekly pricing reviews.
A common motto at Fogelman is “no surprises.” As such, we take great pride in maintaining an open line of communication with our ownership groups to let them know what is happening on-site at all times and what to expect when they see their monthly reporting package. Part of this process is mid-month expense reviews and income projections. By engaging in fluid dialogue, we are able to collaboratively implement strategic plans to react to property conditions.
What do you think are the main trends in multifamily that will rule the market in 2018?
Marshall: Online leasing will continue to rise and digital marketing will surely evolve as our resident bases become comfortable with new technology and online platforms. As we’re thinking about the future of onsite programming, we’re starting to reimagine the resident experience.
Trends come and go but at the heart of multifamily investment and property management is relationships and ensuring people feel welcome, at ease and most importantly, appreciated. This can only happen on a personal, people-to-people level. Continuing to uphold these values in the day-to-day and instill a customer-oriented company culture will be increasingly important, especially as we navigate the distractions of technology.
Fogelman CARES was established in 2008 as a way to formalize associate-led charitable initiatives. Could you tell us a little bit more about this endeavor and the part it played in the aftermath of Hurricane Harvey and Irma?
Marshall: Both the Fogelman family and our company have a well-known tradition of philanthropy and community support that spans decades. Fogelman CARES was established as a formal structure for Fogelman associates to directly support their local communities through active volunteerism and fundraising.
In the aftermath of Hurricane Harvey and Irma, Fogelman associates came together and launched several campaigns, including a fundraiser for local residents and the American Red Cross, plus a “Go Fund Me” to provide support for their colleagues who lost their home and personal belongings to the natural disasters. The team quickly rallied to fundraise for the purchase of clothing, groceries, supplies and the repair or replacement of property. Harvey and Irma presented an extraordinary chance for our team to “walk the walk” and help each other rebuild.
Link to Article: multihousingnews.com