Page 24
— Property Management Quarterly — January 2016
T
here is ample evidence that
in the coming year, there will
be more occupants than avail-
able units in the greater Den-
ver area. Word has gotten out
that Colorado is a great place to live,
bringing a steady influx of new resi-
dents. When you
have less inven-
tory than demand,
it is easy to call it
a landlord/seller’s
market. But when
you look at the big-
ger picture, com-
petition is fierce on
both sides of the
table.
Developers have
been quick to
respond to this
demand by build-
ing new complexes
around the city, and many properties
have gone through major remodels.
Prospective quality residents have
more options than ever before. Thus,
this is not the time to be complacent,
but rather a good time to step up the
game of your property. This is where
the investment in some mainte-
nance and cosmetic enhancements
can make a big difference. The look
and feel of a property not only leaves
an intellectual impact but an emo-
tional one as well – it just feels good.
There is an aesthetic pleasure and a
feeling of safety.
These good feelings about a space
are greatly diminished with unkept
landscaping, dingy lighting, faded
or cracking paint, outdated color
schemes, old fixtures and worn car-
peting. The major areas to give a
once over and make sure are up to
task include the exterior landscape,
exterior paint, common areas and
the interior of the units, as well as
the general infrastructure of roofing,
heating, cooling, pipes, doors, win-
dows, drainage and plumbing.
When it comes to the exterior of
a building, getting it repainted at
the earliest opportunity not only
enhances the property’s curb appeal,
but also prevents further damage
to any exposed wood or metal that
can easily rot or rust. A professional
exterior paint job can last seven to
10 years, but this timeframe can be
reduced significantly with winter
weather or excess precipitation,
especially hail. To keep interiors
looking fresh, you
may want to consider
painting every three
to five years. A regular
visual inspection is
your best way to make
an assessment about
paint.
To further enhance
your property and
redefine, revive and
transform it, it is valu-
able to look at color.
There is plenty of
research that goes into
what types of color
palettes attracts mil-
lennials, Gen X or Y,
baby boomers or the
great generation. Color
palettes evolve yearly
based on certain zeit-
geists influencing pub-
lic consciousness.
One of the leading
trends is the applica-
tion of warm grays
that border on khaki
and turn into blushed
neutrals. These colors
remind us to live well,
be well and stay well,
and are vital to creat-
ing spaces to unplug.
They represent natu-
ral materials, honed
and sheer of ancient
alabaster and marble
hues; they reflect new
therapies that draw
us to the colors of
nomadic sand baths
and holistic massage
rooms. This color
theme, coined Pura
Vida, was discussed
at ColorMix 2016 with
Sherwin-Williams,
other leading paint
suppliers and the
American Society of
Interior Designers.
The other three col-
ors palettes of 2016
speak to other cul-
tural nuances. Dash-
ing greens and cheeky
pinks with a flower power that’s as
crisply modern as it is soulfully vin-
tage acknowledge multifamily living
is back, and this palette connects
across generations. Olive and denim,
dusky wools and brass buttons glint-
ing in the sunlight make us think
rugged determination. The future
keeps arriving, in icy blues, shim-
mering pewter, sophisticated plums
and other mesmerizing hues in stun-
ning gloss finishes.
It may be helpful to consider how
various color palettes can be applied
most effectively to your property. A
“new feel” can go a long way to give
you the competitive advantage in an
ever-increasing competitive market,
with no forecast of slowing down
anytime soon.
s
Vendor Trends
Brent Rumpf
President, Shaker
Painting Inc.,
Denver
Photo courtesy Sherwin-Williams
ColorMix 2016 predicts a color trend called Pura Vide, which uses warm grays on khaki and blushed
neutrals, will be a popular palette for 2016.
to say that the open-plan
office is a new movement.
It’s not. In fact, open-plan
offices have been around for
decades, evolving and adapt-
ing to technology and cul-
tural demands. But the fairly
recent rise in millennial office
workers is largely responsible
for the sharp incline in open-
plan offices.
Consequently, managers
are prepared to take more
risks when handing out ten-
ant improvement dollars for
these types of build-outs. It
may serve this type of tenant
to opt for a longer lease term,
which is what the manager
would obviously prefer, but
that doesn’t always hap-
pen. So managers have to be
prepared for the possibility
of flipping a standard office
suite into an open-plan lay-
out and back again within a
five-year span.
This is very good news to
the construction industry,
at least for those companies
specializing in tenant finish.
Indeed, tenant improvement
projects nationwide have
jumped a significant 14.2 per-
cent since the second quarter
of 2013, according to a feature
last year in World Property
Journal. The article noted that
“this is especially prevalent in
office markets that are satu-
rated with new construction
and renovation.” That pretty
well sums up metro Denver
as managers continue to pay
a higher tenant improve-
ment dollar for customized
open-plan space. And it’s not
cheap.
It costs approximately $20
per square foot to convert
a 10,000-sf office suite with
standard grid into what most
of us would term an open-
plan space. Call it “industrial”
or an “urban loft” or some-
thing else, but the construc-
tion component includes
removing all of the ceiling
grid, lights, the heating, ven-
tilating and air condition-
ing unit and whatever else
may happen to show up that
wasn’t planned. Mechanical
trunk lines must be removed,
sprinklers must be turned
upward, and all lighting must
be suspended. Sometimes the
floor is stripped down to con-
crete, which must be leveled,
repaired and sealed. There
are engineering and archi-
tectural soft costs all along
the process, and sometimes
those fees can be significant.
Returning that same suite
back to its pre-open-plan lay-
out costs another $10 per sf
in construction alone. While
it seems like a waste of time,
money and materials to flip
tenant spaces back and forth
within a fairly tight time
frame, managers are accus-
tomed to doing it. It’s the
cost of doing business and a
risk that must be measured
case by case. And every detail
must be spelled out clearly to
all parties in a marketplace
as competitive as Denver.
While that might seem like
ridiculously oversimplified
advice, it is not.
It is not uncommon for
even the sharpest property
manager to miss something
unseemly above grid, for
example. It happens, espe-
cially when deals are done at
breakneck speeds. One open-
plan tenant found itself with
a sweeping lead shield in the
plenum to protect occupants
from x-rays performed in the
medical office above. Another
had to deal with hot-water
heaters nestled in the ceiling
corner for a tenant’s kitchen
on the second floor.
Some landlords include a
clause in the lease that calls
for the tenant to return the
space to building standard
condition upon departure to
account for the “flip factor”
associated with open-plan
conversions.
The point is, the property
managers can negotiate vir-
tually anything into the lease
or the work letter. So can the
tenant. Managers already are
paying top dollar for open-
plan tenants. In this market,
they should take extra care
in protecting their assets,
especially when such rapid
change is the new normal.
s
Beware
