Volume 14, Issue 2 PRG Real Estate Management, Inc. Summer 2013

Elvis and AirplanesWhile we didn’t buy Graceland and we didn’t place an order for any of Boeing’s new 787 Dreamliner series, we came aw-fully close with our newest set of acquisitions: Church Lake Apartments in Memphis, TN and Churchill Commons in Charleston, SC.

Church Lake is a 352 unit garden-style community located in the Memphis suburb of Southaven, MS. Constructed be-tween 1997 and 1999 and very well maintained by previous ownership, the property provides PRG a stable property in a rapidly growing market. Southaven, located in DeSoto County, is considered a highly desirable place to live because of its easy access to Memphis, highly ranked school system and low cost of living. The population within one mile has increased by 47% during the past decade and is expected to increase by another 11% during the next five years.

Memphis, the home of Elvis Presley, the Blues and the Birthplace of Rock n’ Roll is the region’s economic-center anchored by FedEx’s world headquarters employing over 30,000 people. In addition to being home to the nation’s largest distribution center, Memphis is fast becoming a recognized leader in healthcare and bioscience. Memphis Medical Center comprises five major hospitals including St. Jude Children’s Research Hospital and employs more than 30,000 people with continued expansion contemplated.

PRG looks to capitalize on high demand and low sup-ply available throughout DeSoto County. Currently there

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“Quality Living is Our Passion”

are only 5,200 units serving a population of 170,000 with a moratorium on new multifam-ily developments. Church Lake consists of large one, two and three bedroom units and offers residents a leading amenity package including two pools overlooking the lake, fitness center, sports courts, covered parking and garages.

Three states and some 700 miles away, Churchill Commons is a 200 unit value-add garden-style community located in the affluent Charleston suburb of Summerville, SC. Churchill offers PRG the opportunity to enter into the expand-ing Charleston market, more specifically the highly desirable City of Summerville. Located 30 minutes north of Charleston, Summerville boasts the fastest growing population in the state over the past decade. Summerville offers upscale residential communities, popular shop-ping centers and one of the state’s top school systems.

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Charleston isn’t just “America’s Most Friendly City”. It has recently transformed into a globally-recognized high-tech business center in the Southeast. Anchored by a heavy shipping port and tourism industry, Charleston is also home to Boeing, DuPont and Alcoa. Boeing recently completed a $1B expansion at their 787 Dreamliner assembly facility bringing in 8,000 new jobs with further expansion contemplated.

Taking advantage of Churchill’s excellent location, PRG will rename and rebrand the property as Summerville Station Apartment Homes. Built in 1980, the property provides significant value-add opportunity as old own-ership left quite a few things to be desired. PRG intends to undertake a comprehensive interior and exterior renovation program. The $1,000,000 capex project will include cabinet re-facing, installation of new faux-granite countertops, brushed nickel plumbing and lighting fixtures, appliances, and new faux wood vinyl flooring and carpet. Exterior capital improve-ments will include: exterior painting and architec-tural improvements to the building facades, a new dog park, landscape upgrades and new property signage. In addition, we will redesign and remodel the clubhouse to now include a state of the art fit-ness center, an amenity not previously offered at the community.

Both acquisitions present opportunities for PRG to show off our skills in two new markets. Not only that, the purchases help some of PRG’s existing investors partici-pate in 1031 tax exchanges resulting from the sale of other assets, possibly saving them from quite the tax bill from Uncle Sam.

With nearly 50,000 unique visitors per year, we figured it was time to inject some silicon valley lift into our existing PRG corporate website. After researching high and low we realized we were already leaps and bounds ahead of the ugly duckling pages of our major Philadelphia based competitors. But being the region’s best was not good enough…we wanted to be Best in Show and an example to other midsize NMHC (National Multifamily Housing Council) member companies! Through several months of development (and one or two trips through Adobe Creative Suite) our new masterpiece pranced out of the web-developer’s server like a gold medal dressage champion. But in the words of Reading Rainbow’s Lavar Burton, “You don’t have to take my word for it”. Head over to www.prgrealestate.com and check it out. Contemporary and functional, the new website makes it even easier for all of our stakeholders: residents, employees, and investors alike to learn all about PRG and to find out why Quality Living is Our Passion!

Your New Favorite Bookmark

October

1. Governors Ridge 0.0% Brandy Carothers2. Cascades 0.00% Brandy Carothers3. Lake Johnson 0.39% Jay Rawls

November

1. Saddlebrook 0.39% Sarah Arnett2. Chinoe Creek 0.40% Danielle Porche3. Sawgrass 0.44% Erika Johnson

December

1. Cascades 0.04% Brandy Carothers2. Chinoe Creek 0.44% Shayne Martin3. River Oak 0.67% Danielle Porche

January

1. Governors Ridge 0..08% Brandy Carothers2. Cascades 0.08% Brandy Carothers3. Sawgrass 0.33% Erika Johnson

February

1. Saddlebrook 0.00% Sarah Arnett2. Chinoe Creek 0.04% Danielle Porche3. Governors Ridge 0.08% Brandy Carothers

March

1. Lake Johnson 0.05% Suzanne Maddie2. Governors Ridge 0.08% Brandy Carothers3. Cary Pines 0.25% Casie Miller

April

1. Cascades 0.00% Brandy Carothers2. Sawgrass 0.00% Erika Johnson3. Magnolia 0.07% Denise Reed

May

1. Cascades 0.00% Brandy Carothers2. Saddlebrook 0.07% Sarah Arnett3. Governors Ridge 0.09% Brandy Carothers

June

1. Sawgrass 0.02% Erika Johnson2. Huntington 0.05% Kim Ober3. Governors Ridge 0.07% Raynae Rojas

Titanium Tool BeltTop Gun Collections

October

1. Hampton Chase Tim Dickison2. Lake Johnson Walter Chavez3. Wellspring Luis Ocasio

November

1. Hyde Park Earl Brice2. Hampton Chase Tim Dickison3. Treetop Julio Ventura

December

1. Magnolia David Strain2. Country Club James Wright3. Lancaster Arms Jose Alvelo

January

1. Cary Pines Adam James2. Coquina Bay Drew Trayer3. Wellspring Luis Ocasio

February

1. Hampton Chase Tim Dickison2. Tate’s Creek Jonathan Milton3. Carolina Woods Chris Blevins

March

1. Hyde Park Earl Brice2. Palmetto Place William Parham3. Tates Creek Jonathan Milton

April

1. Huntington David Lasly2. San Pablo Robert Harris3. Country Club James Wright

May

1. Sawgrass Melvin Sosa2. Huntington David Lasly3. Treetop Julio Ventura

June

1. Honeytree Shariff Hawkins2. Hampton Chase Tim Dickison3. Treetop Julio Ventura

The Razzle Dazzle award is calculated based on the number of approved applications per total unit count.

October

1. Vera Sherrod Hilton Village 132. Matt Morrison Honeytree 63. Ashley Carroll Lancaster Green 22

November

1. Britany Haney-Jones Corners 142. Meghan Borkowski Palmetto Place 113. Christine Guimaraes Hyde Park 14

December 1. Giselle Santiago Cary Pines 142. Britany Haney-Jones Corners 113. Vera Sherrod Hilton Village 9

January

1. Matt Morrison Honeytree 72. Vera Sherrod Hilton Village 123. Katie Glovas Villas 13

February

1. Matt Morrison Honeytree 92. Ashley Carroll Lancaster Green 313. Meghan Borkowski Palmetto Place 15

March

1. Ashley Guy Corners 152. Vera Sherrod Hilton Village 113. Andy Singleton Chanticleer 20

April

1. Lacelia Newman Corners 192. Jan Mascola Saddlebrook 163. Christine Guimaraes Country Club 7

May

1. Raynae Rojas Governors Ridge 82. Matt Morrison Honeytree 73. Lacelia Newman Corners 11

June

1. Matt Morrison Honeytree 72. Michelle Smith Magnolia 73. Vera Sherrod Hilton Village 11

Show Me the MoneyRazzle Dazzle Leasing

4th Quarter 2012

In the final quarter of the year, Willow Ridge Apart-ments of Charlotte, NC wins the Show Me the Money award. Boasting an outstanding $115,000 positive vari-ance to budgeted net operating income (NOI), Manager Kelsey Cantrell and Maintenance Supervisor Raymond Judd have a lot to show for their hard work!

Pittsburgh, PA’s Cascades Apartments also had a great quarter, beating budgeted NOI by almost $84,000! Manager Brandy Carothers and Maintenance Supervi-sor Kenny Griffin finished the year off strong!

Also performing well was North Carolina’s Cary Pines, with a $41,000 positive variance to budget. A job well done for Manager Suzanne Maddie and Maintenance Supervisor Adam James!

1st Quarter 2013

The winner of the Show Me the Money award for the first quarter of 2013 is Staples Mill Townhomes! The 437-unit property in Richmond, VA is managed by Tracy Bobbitt, while the maintenance is headed by Fred Saunders. This team was able to beat budgeted net op-erating income by $83,000!

Similarly, The Village of Banyan Grove in Boynton Beach, FL beat budgeted NOI by over $55,000 in the first quarter. Manager Sandra Arriaga and Maintenance Supervisor Jay Madoo have increased NOI by a whop-ping 8.6% since this time last year.

Hyde Park Apartments in Chester, VA beat budgeted NOI by nearly $46,000 thanks to good work from Man-ager Matt Sugg and Maintenance Supervisor Earl Brice.

2nd Quarter 2013

For the second quarter in a row, Richmond, VA property Staples Mill Townhomes is the winner of the Show Me the Money award. Manager Tracy Bobbitt and Mainte-nance Supervisor Fred Saunders beat budgeted net op-erating income (NOI) by over $55,000!

North Carolina properties Willow Ridge Apartments (Charlotte, NC) and Cary Pines (Cary, NC) surpassed budgeted NOI by $37,000 and $33,000, respectively.

Who puts the E in Excellence? Andy Singleton, Property Manager from Chanticleer of course! Andy joined PRG in 2008 and became the Property Manager at Chanticleer in May 2013. She knows what she wants from her team, including from top-tier Maintenance Supervisor Jeff Hutchinson. One of our newest residents couldn’t help but send a glowing letter to tell Andy that he was thrilled with how the staff made what could have been a difficult move from Oregon to Virginia into a smooth and downright amazing experience. We have no doubt that Andy and her staff will continue to set the standard when it comes to excellent customer service.

Victor Jiminez from Sawgrass Apartments wins the 1st Quarter Excellence Award! Victor was nominated by both a satisfied resident and Property Man-ager Erika Johnson. Victor has been on the Sawgrass maintenance team for two years and has clearly contributed to the success of the property. This was exhib-ited in a letter received from a Sawgrass resident who complimented Victor on his timely and thorough service for an air-conditioning call. The resident called Victor a “very valuable addition to the Sawgrass maintenance department,” and we couldn’t agree more!

Mariano Calderon Jaimes from Park Ridge Apartments wins the 1st Quarter Rav-ing Fan Award! Mario works at Park Ridge Apartments in Durham, NC. He was nominated by Property Manager Rita Zepeda for his consistent hard work and strong customer service skills. Mario was recognized for his ‘above and beyond’ attitude by a current Park Ridge resident who commented, “Mario is always very friendly, polite and professional. He never fails to wave at me when we pass in the parking lot…During the past three years each time Mario has responded to a maintenance request he has always worked very hard and with a smile. Employees such as Mario are rare, so I felt it necessary to take a moment to bring that to your attention and to thank him for his hard, exceptional work.” While on a Saturday work order call, Mario even stopped and offered to help this resident when he no-ticed her struggling while bringing trash bags to the dumpster. Thank you Mario for going above and beyond the call of duty!

Everyday heroes….at PRG. Gail Collins from Louisville, KY found her hero in Main-tenance Supervisor Donnie Cook from River Oak Apartments, who has been in the PRG family since 2007. Ms. Collins, a resident of the community behind River Oak, was involved in a traffic accident outside of our property. Donnie was in the area and stayed with her directing traffic around her vehicle until the police arrived. When asked, this father of two said he thought the other driver appeared hostile and he didn’t want to leave her alone. When he’s not busy saving the day, Donnie loves to spend time with his teenage sons doing all the activities he loved doing as a boy – camping, fishing and flying remote control airplanes.

Several times a year the leading multifamily real estate executives gather at different venues across the country to discuss the “goings on” in the industry. The sessions I find most entertaining are the discussion panels that the powers-that-be form to de-liver expert opinions on various geographic markets and to opine on industry trends. Accompanying each panelist is a two page biography backing up the reasons why we should pay attention to their wise words. Around this time, the same thought always occurs to me: This business is not complicated. If it were complicated we would have all done better in freshman biology class and ended up becoming neurosurgeons or better, we would have joined Chris Hadfield on the International Space Station pro-viding backup vocals to his YouTube rendition of “Ground Control to Major Tom.”

Make no mistake, complication should not be confused with difficulty of execution. It is in the execution where PRG stands out from a majority of its competitors. How to keep a 300+ person organization focused on just a few things is indeed quite dif-ficult but it is certainly not complicated. The results of such laser focus are easy to

see. PRG has just achieved the highest resident retention rate over any six month period in its history. On an annualized basis, this equates to a drop of nearly 500 apartment homes experiencing resident turnover. The benefits are pronounced as a drop in resident turnover aids both top line revenue growth while also providing an opportunity to better control labor and contract repair expenses. Keeping our residents happy keeps our in-vestors happy; a simple lesson. No capitalization rate derivation, treasury swap analysis, or population growth forecast is necessary to reach such a conclusion. When I meet with our acquisitions team (there are three of us) we do indeed perform such derivations and analyses to ensure our new investments are sound. That said, the other 99% of the organization, our operational talent, is where the big money is made.

As of June 18th, PRG has joined the “Cloud League” and has migrated our in-house Microsoft Exchange email system over to a hosted, subscription-based online service called Microsoft Office 365. So, what’s this cloud computing that everyone is talking about these days? Cloud based computing can have different meanings but it usually involves moving a great number of storage devices and hardware along with their associated networks over to an internet or web based hosting platform. The cloud based network provides users with the ability to run a program or service on many connected computers at the same time from any location absent of any hard-ware needs on the company’s main server.

So, what does this all mean for PRG users? From an IT perspective, Office 365 provides PRG with a way to boost capacity while increasing flexibility without investing additional IT resources. This means that PRG can save money and not have to worry about adding extra storage and/or purchasing new servers or software licenses for email. It also saves PRG and its properties the cost and time involved with PRG’s IT Department maintaining an in-house Exchange server. The opportunity cost savings can be spent on other strategic initiatives impacting the bottom line. PRG users can access the new cloud based email thru any internet browser by going to http://mail.office365.com and signing into the system.

Holy Cumulus Nimbus Batman! - PRG Moves to the Cloud

The Business is Simple. The Execution is the Hard Part.