July 17, 2023

Welcome to People and Properties, the Cohen-Esrey newsletter where we celebrate the successes of our team members and keep you informed about what is happening in the Cohen-Esrey world. If you have something you would like to share or an achievement that you would like to celebrate, please send it to Lee Harris at lharris@cohenesrey.com. If you are on a property, please print and distribute this newsletter to each member of your property team. You can also find People and Properties on KnowledgeNet. Click here to view previous editions.

A Place Called Home at the Crossing

Built in 2002, Mills Crossing is a 42-unit affordable community in the small rural south central Illinois community of Salem. Located approximately 75 miles from downtown St. Louis, the property is owned by a Cohen-Esrey Apartment Investors (CEAI) partnership. The small property sports a beautiful clubhouse, playground, and business center, and is situated in a quiet residential neighborhood. Unit interiors offer large walk-in closets, balconies or patios, and disability access. Mills Crossing features two-story buildings with two-bedroom units of 764 square feet and renting for $595 per month. Three-bedroom units are 1,103 square feet and rent for $645 per month. Three shopping centers are within 2.3 miles of the property. The Salem Family Aquatic Center is a short distance away (see photo).

Salem is a city in and the county seat of Marion County, IL. The population was 7,282 at the 2020 census. Founded in 1823, it is situated halfway between the Indiana and Missouri borders on what was originally the Vincennes-St. Louis Road, now U.S. Highway 50. Large employers include Home Depot, Excelitas Technologies, ESI Steel, Little Egypt Golf Cars, Precision Truck Products, Radiac Abrasives, Squibb Tank, and Rich’s Products (formerly Jacqueline’s Gourmet Cookies).

Rebecca Roddy (2020) is the Property Manager and Rebecca Grimm (2019) is the Regional Manager. Mike Gioia (2022) is the Senior Property Accountant, Nancy Lewis (2021) is the Property Accounting Assistant, and Rodney Chmidling (2015) is the Accounts Payable Specialist.

We especially want to recognize Rebecca Roddy and Mark Isaiah (2020), Maintenance Technician for their efforts to deliver Customer Fulfillment as evidenced by Mills Crossing’s #4 standing on the Leaderboard with an NPS of +86.67! Congratulations, Rebecca, and Mark!

We welcome the following new team members to Cohen-Esrey and the Nexus 5 Group.

Jamina Beal – Sullivan Place, St. Louis, MO – Assistant Property Manager
Rayner Gonzalez – South Pointe, Dallas, TX – Maintenance Technician
Cameron Dawn – Astoria Park, Amarillo, TX – Maintenance Technician
Suzanne Perez – Walnut Street Flats, Reedsburg, WI – Property Manager (Rehire)
Michael McDonald – Park at Forest Hill, Memphis, TN – Leasing Agent (Rehire)
Alvin Parker – Willow Point, Concordia, MO – Maintenance Technician (Rehire)
Siobahn Foreman – Colony Woods, Kansas City, KS – Property Manager
Harvie Childs, Jr. – Lofton Place, Fort Worth, TX – Maintenance Technician
Alejandro Madrigal – Perry 81, Overland Park, KS – Lead Maintenance Technician

Meet the Justin Place Team

Meet our team at Justin Place in Kansas City, MO. L-R – Anthoni Alexander (2021), Maintenance Technician, Cynthia Johnson (2016), Property Manager, and Randen Woods (2023), Make Ready Technician. This team deserves a huge shout out for being in 5th place on the Leaderboard with a +62.79 NPS. Great job delivering Customer Fulfillment!

CEDG Closes Launchpad Partnership

The Cohen-Esrey Development Group (CEDG) has closed a partnership into which an investment is being made to build the 50-unit Launchpad Apartments in Colorado Springs, CO. This is CEDG’s third Colorado development and its second in Colorado Springs. The project is dedicated to youth 18-to-24 years of age experiencing homelessness. A non-profit partner, The PLACE, will be providing a comprehensive array of supportive services for the residents. The Launchpad should meet the needs of 67% of Colorado Springs’ homeless youth. Eight different funding sources are being utilized to build the $12.1 million project on a 1.34-acre site. Construction is expected to commence in September and be completed in November 2024. This project truly defines the Cohen-Esrey Core Value of Community Impact. Congratulations to Lisa Sorensen (2019), Development Director and Nick Emenhiser (2022), Development Manager for identifying and making this a reality. Kyle Ervin (2021), Construction Project Manager, was also instrumental in collaborating with the architect and contractor to create a workable budget.

Transformational Construction!

Construction continues at several Cohen-Esrey Development Group (CEDG) future communities.

The finish line is in sight at Sinclair Flats in Mankato, MN.

Hallways are taking shape and cabinets are being set at Sinclair Flats.

Foundations are being poured at Panorama Heights in Colorado Springs.

Second story framing well underway at Loma Vista Lofts in San Antonio, TX.

The Trails at Lehow in Englewood, CO, already has some siding installed!

Integrity

Gary Thurman (2005), Field Technician-Level 3, Nexus 5, was recognized at the Cohen-Esrey Leadership Conference as a 2022 Integrity Award winner. Here is what was said about him during the presentation ceremony:

This team member joined Nexus 5 Group/Cohen Esrey in 2005. Integrity as defined as who you are or what you do when no one is looking. This person lives this out. We receive comment after comment from clients that say they never have to worry about quality or record keeping when this person is on their property. He keeps a very accurate account of the time and materials used for each task and project assigned to him. He works most of the time without oversight and refuses to deliver a final product that isn’t perfect. Cutting corners is not an option. This is a quote recently received from one of our clients: “Partners, who take pride in their work, are honest, hardworking, and on my team is the only way I can keep my commitments to the customer. Thank you for lending us his expertise” - Branch Manager, Storage & Office Solutions, United Rentals. This Integrity Award goes to Gary Thurman

Kimberly Plumb (2020), Property Manager, Northwoods Apartments, was recognized at the Cohen-Esrey Leadership Conference as a 2022 Integrity Award winner. Here is what was said about her during the presentation ceremony:

This team member will be celebrating her 3rd year with CE this year. She always acts with integrity. She is dependable and follows through on her commitments. She is always open and honest when communicating with others. She holds herself accountable and owns up to any shortcomings. This past year the team member was faced with an uncomfortable bias encounter with a now previous 3rd party owner and asset manager regarding CE and its team members, her personally and on-site management. This team member handled the questions and meeting completely poised and professional and stumped this ownership as she did not tell them what they wanted to hear, but yet fact based and honesty on the things implemented and done that highlighted the progress and success that the team and CE have had at this particular property and what she believed was needed to elevate the operations.

Tell Everyone About CEAI and iiM Podcast Episodes!

Cohen-Esrey Apartment Investors (CEAI) and Innovation in Motion (iiM) have developed quite a series of podcasts! Lydia Kinkade (2013), Managing Director of iiM and Manager of CEAI Funds XXIII, 24, and 25, moderates both podcasts.

The CEAI podcast includes Lee Harris (1975), President and CEO, and Ryan Huffman (2002), Cohen-Esrey’s Chief Operating Officer and Managing Director of CEAI. They discuss apartment investing strategies and review some of the acquisitions and dispositions made by CEAI.

The iiM podcast is focused on early stage investing in start-up companies. Lee and Lydia talk about the venture capital industry and how iiM makes investments including the review of some of the firm’s portfolio companies.

You can listen to all episodes for both podcasts on Spotify, Apple, or other major podcast platforms. New episodes are posted monthly.

Overlook 157 Moves Closer to Reality

The Cohen-Esrey Development Group (CEDG) recently purchased a 4.46-acre site in Asheville, NC, on which it will develop a 141-unit workforce housing community called Overlook 157. Plans call for 73 one-bedroom units of 705 square feet renting for $1,278 to $1,650 per month, and 68 two-bedroom units of 1,085 square feet renting for $1,533 to $1,995 per month. Amenities will include a swimming pool, fitness center, and community room. The site backs up to a wooded hillside.

Asheville is a metro of 469,000 residents in western North Carolina’s Blue Ridge Mountains. It is known for a vibrant arts scene and historic architecture, including the dome-topped Basilica of Saint Lawrence. The vast 19-century Biltmore estate displays artwork by masters like Renoir. The Downtown Art District is filled with galleries and museums, and in the nearby River Arts District, former factory buildings house artists’ studios.

Congratulations to Clark Mills (2022), Development Director for identifying and pursuing the site. Jack Brenton (2018) is the Development Manager, and Tim Minson (2019), Vice-President of Design and Construction, is the Construction Project Manager. Construction is expected to begin before the end of the year and be completed in 2025.This will be the third project for CEDG in North Carolina.

Calling All Tipsters!

Here is the next question in our series, Calling All Tipsters! We will offer a subject and ask all team members to give their advice, tips, or experiences that may prove helpful to other team members. In this issue we pose the following question:

What is the #1 thing you do to deliver Team Member Fulfillment?

Please send your responses to me, Lee Harris, at lharris@cohenesrey.com, and we will publish them in the next issue of People & Properties. Periodically when we receive some outstanding ideas, we’ll send a $25 gift card to express our appreciation, and we’ll be sharing some of the best responses in each issue.

Another Empowerment Story

By Amanda Flynn (2022), Project Engineer I, Nexus 5 Group

Amanda Flynn (2022), is a Project Engineer I for the Nexus 5 Group. Here is what she has to say about her Empowerment:

My name is Amanda Flynn and I have been with the Nexus 5 Group for just over a year now. I started last summer as an HVAC Installation Technician, and I have since moved my way up very quickly. I was promoted to the office as a Service Project Engineer early last fall and my role has since expanded. Nexus 5 has made me feel that I have finally found the place that I belong. I feel challenged with every project, every day, and I am pushed to be the best version of myself. I have learned a lot about my capabilities as well as areas I need to work on.

I started here with zero experience in the construction or HVAC trade and very little electrical knowledge. Starting in the field and learning about what our Service Department does has improved my knowledge tremendously. I was provided hands on experience in HVAC and electrical projects which has given me the tools and confidence to excel in the position of Project Engineer. I feel that I have the support to succeed and continue to rise in my career. Nexus 5 functions as a true team. Everyone is here to help each of us succeed, live up to our Core Values and nurture our professional growth.

Investing with CEAI – Top Five Questions – Part 1

By Lydia Kinkade (2013), Managing Director – CEAI Funds

As we continue to scale our market-rate acquisition efforts through Cohen-Esrey Apartment Investors (CEAI), we have expanded our investor base beyond “friends and family” of the firm to people who are not as familiar with the inner workings of our business. It’s fair to say that it takes many, many conversations with a lot of individuals before one says yes to investing with us. It is always a team effort to provide responses to the questions that potential investors ask, and we thought it might be informative to share some of the most common questions we receive, as many of them relate to the work that is being done not only in the Corporate Office but in the Field as well. Some of the most common questions we get asked when meeting with a potential investor regarding how we operate include:

1. What is your screening process for selecting new properties?

We look at ~3,000 apartment offerings on an annual basis.
~500 offerings will meet our initial requirements in terms of market fit, acquisition parameters, a good “story,” etc.
~100 will meet our requirements for minimum annual household income, low crime statistics, increasing median home values, and post-renovation Class B rents that will be at least 25% below Class A rents in that area.
We will bid on ~50 offerings that meet our underwriting requirements for stabilized yield-on-cost, initial capitalization rate, expected cash-on-cash returns, forecasted rate of return, equity multiples, and expected price per unit on sale.
The bidding process is always competitive, and we usually win 6-8 new properties per year. Special note: this year, it has been exceptionally difficult to buy properties given the rising interest rate environment and low number of properties on the market. This has made it very difficult for us to see the financial returns we require at the pricing sellers are desiring. So far in 2023, we have won the bid for one property (Trails at Bartram Park), which closed in April.

2. What do you mean when you say you are pursuing the “Best B™ Strategy?”

We want our properties to be the most sought-after property in a given submarket. We believe we can achieve this by delivering a combination of physical improvements and stellar Customer Fulfillment.
Physical improvements might include:
- Resurfaced countertops and cabinets.
- Plank style flooring.
- New plumbing and light fixtures.
- Energy efficient appliances.
- New paint.
- Upgraded common areas and amenities.
Customer Fulfillment initiatives might include:
- Enhanced maintenance services that go “above and beyond” simply fixing the problem that was reported.
- Providing residents with opportunities to connect with each other and build a sense of community.
- Always providing friendly, professional service when interacting with residents and vendors.

In the next issue of People and Properties, we will review the last three questions in Part 2 of this article.

Lisa Paszkiewicz Joins 15 – 20 Year Club

Congratulations to Lisa Paszkiewicz (2008), for joining the 15 – 20 Year Club! She has worked in the property management industry for 23 years, and came to Cohen-Esrey with eight years of property accounting, corporate accounting, and payroll experience. Lisa started in Cohen-Esrey’s Financial Services Department as a Property Accountant. In June 2014, she received her Certified Occupancy Specialist (COS) certification. After nine years as a Property Accountant she decided to try something new. When a position opened in the Cohen-Esrey Compliance Department in 2017, she thought it would be a rewarding change and applied for the position. She became the Section 8 Compliance Specialist and has worked closely with Tina Shirey (2002), Compliance Manager, for the last six years to learn as much as possible about compliance. In February 2023, she took the Housing Credit Certified Professional exam and received her HCCP Certification. Lisa is responsible for the Section 8 resident files review, submitting vouchers and posting of payments, utility reimbursements, special claims, tracking annual recertification and terminations, making gross rent changes, and preparation of the 8703 annual reporting. After 15 years with Cohen-Esrey she’s grateful for the support she has received to expand her knowledge of the compliance programs and is looking forward to continue learning.

On a personal note, Lisa has been married to Anthony for 25 years, has a 25-year-old son Jacob and a 21-year-old son Zachary (turning 22 on July 25). She is a Kansas City Chief’s Fanatic and loves the Kansas City Royals. You will always see her wearing Chief’s gear during football season. She enjoys spending time with her family and two dogs, Harley and Shelby.

Thank you Lisa for your loyalty, dedication, and Commitment for the past 15 years as well as your desire to keep learning!

Ren-Ovation: Driving Success

By Richard Williams (2020), Renovation Director

Driving on a busy highway, at top speed, with a blindfold on could be fun – right? ABSOLUTELY NOT!!! We’d all shudder to think that ANYONE would even consider doing something like that. As a matter of fact, as defensive dance-participants in the chaotic choreography we fondly call “traffic,” our training and experiences have programmed us to depend on and utilize every critical “Key Performance Indicator” the vehicle has to offer. The windshield and mirrors help us to navigate in traffic measurably and panoramically, while the dashboard provides us with real-time performance metrics. Those views and metrics are critical to our goal of successfully reaching the desired destination – safely and on schedule.

In comparison, apartment renovation is the strategic vehicle Cohen-Esrey Apartment Investors (CEAI) uses to drive its “Best B” business model. The Renovation Tracker represents the “dashboard” of that vehicle. A routinely applied Core Value of Commitment to updating that dashboard weekly, and acting on the adjustments needed, which is critical to driving positive outcomes and overall Cohen-Esrey team success. With exciting growth on the horizon, we have already amassed an impressive portfolio of market-rate properties. While all those properties have a history of high performance, a few are worthy of special recognition for maintaining the highest level of consistent weekly Renovation Tracker compliance, renovation productivity and renovation budget performance:

Originally launched in late 2020 as a Microsoft Excel template, the Reno Tracker’s history is worth briefly noting. In certain ways it reflects the standard Cohen-Esrey approach of turning challenging headaches into winning opportunities. The idea for a standard model came about as the byproduct of casual conversations between CEAI and Financial Services team members. The result of these conversations provided a means of:

Tracking and maintaining the specific performance metrics of our value-add strategy (e.g., how much is spent per unit upgrade and for what return).
Determining the market rent loss (e.g., how long is the “down time”).
Increasing Property Manager-level renovation process engagement.
Maximize performance (what gets monitored gets done).

Like all firms in our business sector, we were not immune to complications regarding value-add executions at certain properties. At the same time, we were repeatedly fielding requests from our debt and equity providers alike. They wanted to know the progress of our value-add strategies across the portfolio. While responding to those requests, we were also heading into “prep mode” on several assets that were slated for disposition in 2021 and 2022. Keenly aware of the inherent value in being able to provide an interior upgrade record of historical capital outlays, as well as the corresponding rent increases, the need for a Reno Tracker became business critical. For the eventual buyer, the Tracker displays attentive property upkeep in real terms. It also highlights the remaining revenue increase opportunities through further property renovation projects (interior or exterior).

While a few Property Managers had basic renovation trackers for the most part, they did not include the dollar amount spent per unit, what rent lift was achieved, nor were they routinely updated. As Matt von Ende (2017), CEAI Vice-President of Acquisitions stated, “We knew that if we could create a standard user-friendly template, we would hit multiple birds with one stone.” We’ve come a LONG way since the initial template developed back in late 2020.

While Reno Tracker enhancement and compliance optimization is ongoing, with the Tracker finally in place, we now can capture all the strategic metrics needed to measurably deliver renovation outcomes – consistently and successfully. Property Manager engagement on a weekly basis enables us to pivot when needed, address challenges weekly, and share real-time updates with our capital partners. In the future, if/when we elect to sell any portfolio properties, we will be able to provide a detailed value-add track record, underscoring CEAI’s/CEC’s maintenance of the asset as well as highlight the remaining value-add runway that exists for eventual buyers by building on what we achieved.

Park Edge kitchen before renovation.

Park Edge kitchen after renovation.

The Cities of Cohen-Esrey

To date we have featured St. Louis, Topeka, KS, Wichita, KS, Springfield and Joplin, MO, San Antonio, TX, the Dallas Metroplex, and Atlanta/Macon, GA in our series on the Cities of Cohen-Esrey. In this issue we’ll focus on Colorado Springs, CO. Presently, the Cohen-Esrey Development Group (CEDG) is developing two affordable apartment communities – the 137-unit Panorama Heights (photo), and the 50-unit Launchpad. Previously, Cohen-Esrey Communities (CEC) managed the 72-unit Wyndam Place Senior, another affordable community for a third-party tax credit developer. CEDG has other projects in development throughout the state of Colorado including the cities of Denver, Longmont, and Glenwood Springs. Colorado Springs is a target market for CEDG with more development expected there in the future.

Colorado Springs has a metro population of 755,000 with a healthy annual growth rate of 1.17%. It is the second most populous city in the state (behind Denver) and is 6,035 feet above sea level, near the base of Pike’s Peak which rises 14,115 feet. The Springs is home to the Fort Carson Army base, Peterson Space Force base (North American Aerospace Defense Command-NORAD) within the Cheyenne Mountain Complex, and Schriever Space Force Base. The U.S. Air Force Academy is also located in Colorado Springs. The economy is driven primarily by the military, the tech industry, and tourism. There are nearly 45,000 active-duty troops there and more than 100,000 veterans and thousands of reservists that make Colorado Springs their home. Significant defense corporations in the city include Northrop Grumman, Boeing, General Dynamics, L3Harris Technologies, SAIC, ITT, Lockheed Martin, and Bluestaq. The Space Foundation is based in Colorado Springs. High-tech corporations with connections to the city include Verizon Business, a telecommunications firm, at its height had nearly 1,300 employees in 2008. Hewlett-Packard still has some sales, support, and SAN storage engineering center for the computer industry. Storage Networking Industry Association is the home of the SNIA Technology Center. Keysight Technologies, spun off in 2014 from Agilent, which was itself spun off from HP in 1999 as an independent, publicly traded company, has its oscilloscope research and development division based in Colorado Springs. Intel had 250 employees in 2009. The Intel facility is now used for the centralized unemployment offices, social services, El Paso County offices, and a bitcoin mining facility. Microchip Technology (formerly Atmel) is a chip fabrication organization. The Apple Inc. facility was sold to Sanmina-SCI in 1996.

The world-famous Broadmoor Hotel is a popular attraction in Colorado Springs, and the city also boasts more than 30 breweries and microbreweries. A hot air balloon festival takes place over Labor Day weekend. Garden of the Gods is on Colorado Springs's western edge. It is a National Natural Landmark, with 300-foot red/orange sandstone rock formations often viewed against a backdrop of the snow-capped Pikes Peak. This park is free to the public and offers many recreational opportunities, such as hiking, rock climbing, cycling, horseback riding and tours. It offers a variety of annual events, one of the most popular of which is the Starlight Spectacular, a recreational bike ride held every summer to benefit the Trails and Open Space Coalition of Colorado Springs.