Apartment Owners, Look Beyond Rents

LOS ANGELES—With the steep competition in the Los Angeles multifamily market, investors may need to adjust the way they are managing apartment portfolios. Apartment owners have typically been more rent focused, but property management firm LBPM is encouraging these owners to treat multifamily assets more like commercial assets. Utilizing accounting tools, like cost segregation, will help increase the bottom line of these properties.

“Commercial property owners tend to be a touch more sophisticated. We are trying to bring that to multifamily and even single-family homeowners that are treating those properties as investments,” Gregg Bernstein, CFO and co-founder of LBPM, tells GlobeSt.com. “Apartment owners are often focused on rent: how do I increase the rent, how do I get the vacancy factor as low as possible, and how do I keep my maintenance down. Larger firms and REITs have that sophistication to do CAM analysis, sophisticated budgeting, cross segregation. I can’t say that our group of clients are reaching to that extra level, but we are certainly encouraging it. We really want to squeeze the last penny out of these things.”