A Dash of Color Turns Around A Texas State Community
The Woodlark Companies employed multiple strategies to change perceptions about University Heights II.
By most measures, University Heights II in San Marcos, Texas, was relatively unremarkable when The Woodlark Companies began managing the community in early 2011. The owners, a TIC group, had designs on raising rents in a heated climate for student housing, characterized by an overabundance of new development, with some 8,000 new beds hitting the market in the past three years — most of them much closer to the Texas State University campus than University Heights II. The 672-bed property, built in 2004, was something of a vintage product. It was well occupied, thanks to healthy yearly growth at TSU, but wasn't performing as it could have been. Word of mouth among students was less than positive.
"The owners were concerned that San Marcos was going through a strong growth phase, and the time to act was now," says Derrick Milam, chief operating officer for The Woodlark Companies, whose property management division was expanded in 2012. "The property was well-occupied, but the owners questioned why their rents weren't increasing."
Milam says Woodlark's strategy involved focusing on NOI. "If you're leased up to 100 percent, but your NOI is not that high, the property doesn't produce cash flow. We discussed with them how to bring down their expenses and how we would help them push rents more aggressively."
One of the pieces of that plan involved physical improvements to help UniversityHeights II stay abreast with their newer competition. Woodlark pitched a plan that involved rolling out capital improvements little by little over a period of several years so the owner didn't have to spend a lot of money all at once. A substantial investment was made in the fitness center, and other target areas would include the addition of wood flooring, contemporary furnishings and a consistent appliance replacement rotation to compete with some of the stainless-steel-appliance offerings in the market.
But these cosmetic improvements weren't the main driver of the property's dynamic turnaround. "Once we made changes to the fitness center, word got out, but we didn't see a substantial increase in leasing velocity just because of that," says Regional Manager Erin Sunderland. "We realized we didn't have the best amenity package, and we're not the closest to campus. In fact, we're the farthest. So internally we decided we had to launch a campaign that created a massive buzz in the market. We needed to get people talking positively about this community."
Sunderland says the management team aspired to host events and socials that weren't the types of events common to student housing property management. Partnering with the university became a priority to foster academic growth in residents, as did embracing a renewed customer service/hospitality approach to resident, and parent satisfaction.
Regional Leasing and Marketing Manager Gina Mazzella connected the proximity of the property to a Boys & Girls Clubs of South Central Texas location and dedicated a multipronged effort to raise money for the local club and to inspire residents to connect to their community. Her vision of a 5K began to take shape. She took to YouTube, Twitter, Facebook and Instagram to drum up excitement for the run, as well as creating a website dedicated solely to the event. Woodlark says the anticipation and desire to be part of a good cause increased the property's Facebook likes. The team also partnered with the university as well as vendors within the community to drive donations and create awareness, and Woodlark says these partnerships began to leave a footprint across social media.
The race, dubbed Color for the Cause, took place on March 2, 2013. A "color run" involves participants being blasted with a dust-based colored paint every time they complete a portion of the run. By the time they finish the race, they're covered in multiple hues. Woodlark positioned the start and finish line of Color for the Cause in front of The Heights II. When complete, the run raised $38,000 for BGCA. The property increased its lease percentages from 58 percent at the beginning of January to 87 percent at the end of March. The leasing momentum increased during those months, and rental rates have risen roughly 3-5 percent per leasing season since 2011.
"I've experienced a lot more community outreach with people wanting to get involved with The Heights II," Mazzella says. "People are still talking about Color for the Cause, and they want to know when we're doing the next one."
— Randall Shearin and Lynn Peisner