Providing downtown quality during an incoming L.A. migration
There are approximately 450,000 jobs in downtown Los Angeles, yet in 2008 the population residing in the urban core was less than 40,000. Things are beginning to change. Now, the city is seeing an increasing number of people who already work downtown and live elsewhere moving into the area—and The Holland Partner Group is leading the charge to give these new residents the finest housing the city has to offer at a price they can afford.
Headquartered in Vancouver, Washington, Holland Partners is an organization that really knows the industry, especially when it comes to multifamily rental housing. “Our entire focus—our entire business—is multifamily rental housing,” says Tom Warren, COO of Development for Holland Partners.
Holland Partners is comprised of four different operating companies— development, investment management, acquisitions and property management—and boasts a substantial portfolio. The company manages more than 15,000 units in the Western U.S., has acquired more than 50 apartment communities and has developed multiple communities in major West Coast cities. The company is also working on five adjacent projects in downtown L.A. totaling more than 1,000 units. However, to ensure that it is ready to handle the L.A. influx and to improve overall as an organization, the company spent the last year during the economic downturn developing systems and strategies to build on its success.
THE MOST OF WHAT YOU HAVE
“Since last year promised to be a tough market, we pulled back on new investments to allow the market to catch up with the recent supply,” explains Warren. “During this time, we have been focusing on our assets and have done everything that we can to improve operations— maximizing revenue, streamlining our operating expenses and making sure we provide strong customer service to our tenants.”
One way Holland Partners has found to reduce annual operating expenses is minimizing turnover by focusing on customer service. When residents cycle in and out of any building, it requires additional manpower to prepare their units for the next residents. The company’s approach has already produced very positive results in both operating cost savings and resident satisfaction.
“The industry would really be well-served to focus more on customer service across the board,” says Warren. “We believe that if we consistently exceed the expectations of our residents and provide a welcoming environment, they will want to continue calling our communities their home.”
Holland Partners constantly monitors the effectiveness of its organization and programs, giving each residential community a customer service score that’s posted for all employees to measure their property performance against corporate averages. By conducting the surveys monthly versus more traditional annual or semiannual surveys, staffs are able to swiftly address and resolve any resident concerns before it’s too late. At its core it is a process that empowers employees at every community to focus on the fundamentals of great service.
“In this economy there’s only so much you can do to drive new investments,” says Warren. “But making the most of what you have always creates value.”
VALUING L.A.
These strategies are especially prevalent in Holland Partners’ downtown L.A. work.
“Historically, downtown has not been a very desirable place to live, so even with its very large job base few people were living there,” declares Warren. “What’s happening now, though, is that downtown is seeing more quality establishments going in including restaurants, retail and entertainment venues—it’s becoming a great place to live, especially considering the commute times in the area.”
In 2008, there were nearly 4,000 new units built in downtown L.A., with 2,500 of those being rental. That same year, those units were being picked up at a rate of nearly 200 a month. The economy has caused that number to dip, but only slightly.
“With all the people looking to move into downtown L.A., the market as a whole is still absorbing approximately 130 units a month,” says Warren. “Tenants are really cost-conscious, as you would imagine in this environment,
and they are focused on recapturing the time lost in a daily commute.” This knowledge is leading Holland Partners to build several new projects downtown that have a focus on affordability. Not simply tapping into the growing market, Holland Partners is offering the market what it wants most—and will likely want for years to come.
“The more people who live downtown, the better a place it becomes to live, which in turn leads to more people deciding to make downtown their home,” says Warren. “Everybody’s struggling in this economy, but the number of people renting in downtown L.A. is remarkably high.”
AFFORDABLE AND DESIRABLE
Holland Partners’ Glo: 1050 Wilshire opened in 2007 and has already seen success—its 201 units have above-market occupancy. The building’s an easy walk to the main downtown area and the entertainment venue L.A. Live. Of its units, 40 are priced for residents making less than 50 percent of the median income.
Additionally, Holland Partners owns a 77-unit single room occupancy building that it intends to renovate. “It’s a 1920s building and could really use some touching up,” says Warren. The units in the building are all affordable and its residents pay between $60 and $250 per month. “We want to provide a good, safe living environment for people who would have trouble finding that in other places—and improving the building will make a difference.”
“What we’re trying to do with all of these projects is provide a broad range of housing types to create a diverse residential neighborhood in the downtown L.A. market,” says Warren.
With an innovative strategy, in-depth knowledge of downtown L.A. and a string of high-quality projects, Holland Partners is truly making a mark on the city.
The company also owns an eight-story medical office building—a historic property built in 1923—that it intends to convert into 42 apartments under the city’s Adaptive Reuse Ordinance. Depending on the financing options, it may end up as a special needs building.
Kitty-corner to Glo is 1111 Wilshire, where Holland Partners is planning to build 204 units with 6,500 square feet of retail. Even further down the pipeline is a ground-up project that will likely include 550 units and 40,000 square feet of retail on 3.5 acres.
