Mark-to-Market Services offered
by The Danter Company
The Danter Company can help owners with expiring Section 8
contracts who are considering participation in the
Mark-to-Market in several ways.
Comparable Market Rent Analysis
Participation in the Mark-to-Market program is limited to
properties who are charging rents higher than comparable market
rents, so the key piece of information to begin with in
identifying whether your property is eligible is to identify the
most accurate comparable market rent for your property.
In our nearly 30 years of real estate research experience, we
have developed methodologies to scientifically
identify comparable market rents for a subject property at
any amenity level based on the market conditions, not on
guesswork. Appraisal methodologies are designed to
identify value--we have developed methodologies specifically for
market feasibility study that measure expected market response.
The process starts by identifying a true Effective Market
Area (EMA)SM based on the area that will really
provide the most support for the property, rather than guessing
by using radial analysis. We then do a 100% database
field survey of every market-rate and government subsidized
modern apartment in the EMA. We rate each property based
on its unit and project amenities and curbside appeal, and then
use regression analysis to identify true comparable market rent
for the property. Our rating system also allows us to
identify most accurately the properties most comparable to the
subject site.
We can provide a 100% database field survey with an
identification of comparable market rent as the most basic level
of analysis. Or for those who need a more complete
analysis, we have a more comprehensive level of analysis that we
call the Repositioning Study
Repositioning
When faced with Section 8 contract renewal, owners have three
choices:
- Renew with mortgage debt restructuring,
- Renew without mortgage debt restructuring,
- Opt out and convert to market-rate operation.
In order to help owners make an informed decision, we have
developed a market repositioning study specifically for the
Mark-to-Market program. This study includes a complete market
survey, identification of comparable market rent, and an
evaluation of the property's potential to function as a
market-rate property.
More specifically, the study includes a thorough examination
of the property from a market perspective,
identifying the current condition of the units and grounds, a
market-based evaluation of the floor plans and their ability to
compete within the market, and interviews with on-site
management. We can also provide a shopping report as part
of the evaluation process for an additional fee. Any qualified
inspector can identify necessary maintenance and potential
improvements. What we do is identify the market impact
of these potential improvements, and also suggest additional
improvements or added amenities that will enhance the property's
ability to compete within the marketplace.
Conclusions of the repositioning study include the following:
- An evaluation of unit mix, number, and size
- An evaluation of the existing unit and project amenities
package, including a discussion of potential improvements
that could potentially increase the gross income of the
property
- A comparison of existing/proposed rent to market-driven
rent based on the Comparable Rent Analysis
- An analysis of 'step-up' support for the project (research
indicates that a large component of market-rate apartment
support consist of tenants already in rental properties who
'step-up' their rents to move to the subject site) Our
100% field survey allows us to quantify this support data..
- Improvements necessary to the property to restore the
project to its original market standard as an affordable
market-rate driven apartment community
- An analysis of potential turnover vulnerability for the
project. Just as support typically comes from other
apartment communities, tenant loss is generally the result
of tenants leaving for other projects priced within
'step-up' range that they consider a better value.
- An analysis of rent gaps, or the pricing differences
between unit types. Proper rent gaps are used to even
absorption and maximize return from units offering premiums.
- An analysis of the potential for tenants to find housing
in the local market should the property be converted to
tenant-based assistance. Since our 100% database
identifies all apartments within the market area with
vacancies, we will be able to project the availability of
affordable housing with the market area.
- Competitive analysis--when necessary, potentially
competitive properties are compared with the subject
property and analyzed, including an evaluation of unit sizes
and rent per square foot.
- An analysis of the project's long-term financial stability
comparing population and economic trends in the market area
with current market conditions.
For more information on how The Danter Company can provide
you with key information that you need to make the critical
decisions, call us at (614) 221-9096.
More on The Mark-to-Market Process
A detailed
examination of the process
List
of Participating Administrative Entities (PAEs)
As updated weekly by
HUD in PDF format
Mark-to-Market Links
Sites for additional
information on the Mark-to-Market program
Back to Danter Mark-to-Market Overview
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