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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:

  1. Renew with mortgage debt restructuring,
  2. Renew without mortgage debt restructuring,
  3. 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 page

 

   

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info@danter.com
Danter & Associates, LLC, 2760 Airport Drive, Suite 135 Columbus, OH 43219
(614) 221-9096