The opening page of the Metonic web site includes a statement that reads “we uncover value where others have missed.” I have the opportunity to visit dozens of apartment communities each year in search of opportunities to drive “strong risk-adjusted returns to our investors.”
I have learned through hundreds of property visits all over the country that creating value is all about management and the team that is closest to the customer. For an underwriting of an asset to be validated, an assessment of its management is more important than a cap rate applied to a trailing 12 financial statement. Metonic seeks to buy properties that have management inefficiency or are experiencing operational dysfunction.
As a real estate manager, it is terrific to meet professional property managers, leasing agents and maintenance techs that are the best at their craft. The best management teams are customer-centered and innovative in how they drive results. Metonic employs the best managers to run our properties. Professional property and asset managers know that customers will pay more for a top of market experience. That is what we seek to achieve after acquisition at Metonic.
Metonic has been successful at uncovering value yet to be discovered in circumstances where:
- The property has been managed by the owner. Local owners can do a terrific job maintaining their property but they often do not have access to management tools to keep pace with new leasing and marketing practices. Metonic has acquired several properties directly from local property owners.
- The property is located in a city without a scale level manager. We often find assets in communities of less than 200,000 people where local management companies do not raise rents as aggressively as the market will allow. Apartments residents in these markets pay less as a percentage of their income than they would pay in a larger market. Lots of “upside” for investors exist in this situation.
- Residents like the property but not the manager. Bad managers are in every industry including Apartment Management. A bad manager or a bad maintenance person are easy to identify and can be easy to correct if caught soon enough.
- The property needs fresh capital. Frequently we locate properties in good locations but the property does not present itself well. The property might need a paint job or fresh landscaping but it otherwise is in good shape. Properties in this condition are often an indication of an ownership situation that is ready to sell.
Metonic is blessed with a team of property operations experts. We are unique to the industry as a result of our ability to drive a better property result because of our operational history.