June 19, 2020
Hopefully, this letter finds you and your family well. As the nation and our community continue to fight the Covid-19 pandemic and move toward recovery, we are very much looking forward to getting back to “normal”, whatever the new normal will look like. To say there is no handbook for times like these would be the understatement of the decade.
The purpose of this letter is to 1) thank you for your confidence and participation in the Meadowview Apartments project, and 2) update you on where Meadowview Apartments stands today.
As of June 19, 2020, the Meadowview Apartments office remains officially closed to walk-in traffic. We are continuing to service the resident base through appointments, our virtual phone system, and our online tenant portal. The system is working very well. In our June newsletter, we announced “re-opening” to foot traffic on July 7 with adjusted office hours.
A big win we have accomplished is a new website dedicated to Meadowview Apartments. Please visit www.themeadowviewapartments.com. The new website has helped with marketing outreach and prospect relations immensely. Check it out see what you think. The site includes a button for tenants to log in to their online accounts, an online application and beautiful apartment pictures, aerial drone footage, and a 3D apartment rendering. This web presence is best-in-class for our area.
Rent collection has been a “work-in-progress”. The vast majority of residents have paid rent on time and in full. A group of about ten accounts has become slow pay. Another four accounts have decided it is not necessary to keep their accounts current.
There have been many challenges posed by the Governor’s excessive amount of Executive Orders. The most critical order affecting our business is the inability to evict for non-payment and the courts being shut down. From a collections standpoint, this has left the entire industry with their hands tied. Rent is still due, however, it is possible some of these accounts will just skip out. The good news is our collection rate is approaching 90%. The flip side of that is we were at a 97% rate and improving before the pandemic shut everything down.
Maintenance has continued to operate and provide excellent resident service. It has been a balancing act to attempt to remain compliant with Covid restrictions yet continue to get business done. We have erred on the side of “getting business done” with caution and awareness of health and safety. We have completed the renovation and re-let seven apartments. While this is more than anticipated in year one, overall, these improvements are inching us toward our five-year goal.
The resident base is improving. We believe “the tide is turning.” Our repositioning and re-branding of Meadowview Apartments are continuing to show improvement. We continue to attract better and better resident prospects through our increased and enhanced marketing efforts. Additionally, our screening process provides great opportunities to select good residents. As we continue to work on uplifting the image and raising expectations, we think the word is getting around that our new management team is looking to make improvements and get things done.
All in all, based on what some other business sectors are facing, the multifamily industry, and Meadowview Apartments, in particular, have fared very well. This could not have been predicted six to ten weeks ago. There are still concerns for the coming months regarding how the employment outlook and speed of economic recovery. We feel like we’re “not out of the woods” yet.
Long-term, we’re not entirely sure what effect if any, the market conditions have had on the overall value of the asset. Market intelligence says there is still a large appetite, and possibly larger, for multifamily assets which bodes well for the overall value. With interest rates at an all-time low promoting strong buying power, asset pricing remains favorable. However, predictors caution the impending debt overload on some properties will force sales, possibly bringing pricing down due to adverse conditions. Time will tell. We will continue to control what we can control.
Today, we are very pleased to be able to deliver our first round of interest distributions on time. We think it speaks volumes about the investment decision we all have made. Our anticipation and plan is to continue working the business plan of making needed improvements and raising rents to market rate in order to enable us to continue to hit projected targets.
Thank you for your confidence in Meadowview Apartments. Thank you for your investment in our management team and the property. We appreciate the trust and confidence you have placed in this project. While there is much work to get done, we very much look forward to the road ahead, together.
Best regards,
Mark A. Devereaux
Founder & CEO
Stelvio Equity Group LLC