Property-level operations make maximum contribution to profitability when management consistently focuses on executing Performance FundamentalsSM.
Performance FundamentalsSM comprise five components: revenue, collections, retention, control, and expectations. Performance of each component is compared to NOI Capital Partners' proprietary benchmarks for similar properties, as adjusted for asset-specific characteristics.
The following conditions prevail when there is strong execution of Performance FundamentalsSM:
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Revenue: Revenue is maximized by over-promotion of rent-ready and highly competitive units, and by insuring that ancillary income meets or exceeds acceptable benchmarks.
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Collections: Aggressive collection practices and diligent resident screening minimize delinquency and bad debt.
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Retention: Prompt resolution of tenant problems, a service-oriented staff, and a sound physical plant produce an excellent living environment and high resident retention.
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Control: Management closely controls all categories of spending, continuously looks for cost-effective sourcing alternatives, and adopts cost-saving technologies, to hold operating expenses per unit to NOI Capital Partners' benchmarks. |
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Expectations: Management clearly defines operational expectations to the site team and rewards high achievement.
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Each of these elements must be diligently monitored and improved. Poor execution, in whole or in part, begins a negative ripple effect on property performance.
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