THE CORNERSTONE THE CORNERSTONE PRG Real Estate Management Inc

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THE CORNERSTONE THE CORNERSTONE PRG Real Estate Management Inc Powered By Docstoc
					                         THE                              CORNERSTONE
                                      PRG Real Estate Management, Inc.                                                                              Volume 2, Issue IV
                                                                                                                                                   Fourth Quarter 2000
                                             Covering: Pennsylvania, Virginia, North Carolina, South Carolina & Florida




      Your mission, should you choose to accept it, is to find an under
performing asset, class A in quality, only four years old, in year ten of
economic expansion. It should be in a highly desirable market, and must
be purchased for less than replacement cost. Right! Talk about looking
for a needle in a haystack!

      Well, with the successful acquisition of Marlin Lakes in Sarasota,
Florida, that mission has been accomplished! To sum it up briefly, the
community is beautiful. It consists of 358 units, which are thoughtfully
distributed around a number of lakes which run throughout the property.
                                                                                        The Re-engineering Continues!
On the exterior, the buildings are constructed of stucco over concrete, and
feature Spanish style orange barrel tile roofs. The community is also
                                                                                        The engine which has been driving PRG has been a rather spectacular one
completely enclosed with courtesy gates, and features a fountain at the
                                                                                   which can boast of some substantial accomplishments. It drove the company to
property entrance.
                                                                                   “same store” NOI growth of 17.6% in 4th quarter of ’98, and then to 24.8% same
      The interiors have plenty to offer future prospects as well. The             store growth for the entire year in 1999. But over the past 28 months the company
community consists of a nice mixture of one, two and three bedroom                 has experienced explosive growth, going from eight properties to seventeen. And
apartments, and all units boast every modern convenience. Each one has             naturally with that growth has come the need to increase the number of Senior
a patio or a lanai. And the views of lakes with still more lighted fountains       Property Managers, who manage one property directly and oversee neighboring
can be simply spectacular. Finally, the clubhouse is richly appointed, and         properties indirectly.
we feel confident that future prospects will find it extremely appealing.
                                                                                       And to answer that need, we are pleased and proud to announ ce the addition of
    And if it is location that you want, you’ve come to the right place! The       two new individuals to the position of Senior Property Manager. On December
community is situated directly behind the Gateway office center, right at          4th, Susan Truesdale joined PRG to directly manage the 358 unit Marlin Lakes in
the junction of Fruitville Road and I75. That it is visible from I75
                                          -                                  -     Sarasota, and to also oversee the 416 unit Flagler Pointe in St. Petersburg. Susan
certainly ensures that it will have the highest rate of drive-by traffic of any    joins PRG after having gained a wealth of experience at three previous employers.
community within our portfolio.                                                    Since 1997, she had been employed as an A       ssistant Regional Manager for Lane
                                                                                   Company, Florida Division. In this capacity, she had directly supervised 1,000
    So how did a community with so much to offer ever qualify as “under-           units, and also assisted in the supervision of another 1,000 units. Long term, we
performing?” To begin with, the community was constructed by a firm                expect that Susan will eventually direct operations at all Florida communities.
which was based in Toronto, Canada. In addition to being a long way
from the home office, it was their first entry into residential real estate,           Joining the PRG team in Spartanburg to direct operations in South Carolina
having focused primarily on offices. Toss into this mix rent increases in          will be Tonya Stephens. Tonya has worked in the property management field for
excess of 20%, a staff which all left almost at the same time, and an              the past ten years. From 1990 to 1996, she was employed by Flournoy Properties
unsolved mildew problem, and you have a recipe for disaster. And given             and managed a community in Spartanburg, which is one that we now compete
the occupancy rate around 55% at the time that we took over, that is               with. We are certain that Tonya’s knowledge of the Spartanburg market will be of
exactly what occurred.                                                             extraordinary value. And from 1996 to present, Tonya had been working for
                                                                                   Summit Properties in Atlanta. In her most recent position, she had directly
   We first are intent upon repairing the irrigation system, which has been        managed a 252 unit community, and had directly handled the marketing for three
broken for many months. Once completed, we plan to embark upon an                  communities.
extensive landscaping plan of several hundred thousands of doll ars. We
then intend to repaint the exterior of all buildings a pleasant two tone              We are extremely pleased to have two people who have worked recently for such
color. This together with some exterior drainage work will solve the               outstanding organizations and with such fine backgrounds join the PRG team.
mildew problem. Add to this an even more luxurious redecoration of the             They join Jeff Shumaker, Regional Vice President, who runs operations in
clubhouse and a first class management team, and we are sure that we               Pittsburgh, Erin Murphy, responsible for operations in Virginia Beach, and Melissa
have the formula for success!                                                      Good-Gantz, our Corporate Trainer/Senior Property Manager, who performs all
                                                                                   training and supervises the lease-up at Silversmith Creek. Taken collectively, we are
    A final change will include a new name to the community, which we              confident that the expansion of the senior property management system will
anticipate will somehow relate to the Gateway office center. But whatever          provide the fuel for more explosive growth in PRG’s future.
that name will be, we’re sure you’ll be able to find us. Just look for the
most outstanding community in Sarasota visible from I-75!
                                                                                  Page 1
         “GOOD PEOPLE EQUALS PROBLEMS GO AWAY”
                                                     ...A Few Words From Bob Dominy

    Our organization is presently going         never last, tough people do,” and so on.     We had a management position open at          possibly less dramatic, certainly reflect a
through tremendous change as we                 But the one which I would like to focus      Hyde Park in Richmond, and the property       high degree of skill and effectiveness.
continue to grow and to expand. Since I         upon today is “good people equals            was experiencing a delinquency problem.       Once upon a time, Linkhorn Bay was our
joined PRG in July of ’98, we have gone         problems go away.”                           Sue was enthusiastic about having the         most difficult struggle in the portfolio.
from a company with 8 properties and                                                         opportunity to run both Treetop as well as    However, since Erin Murphy has arrived
67% of our portfolio situated in Virginia           I have felt recently that we have been   Hyde Park. She not only volunteered for       to take control, the community seems to
Beach, to one with 17 c   ommunities from       very fortunate here at PRG. We have had      the assignment, but also had to be told not   be almost an afterthought. Jerry Cook
Pittsburgh to Sarasota. Furthermore, a          some particularly difficult situations       to go to Richmond over the Thanksgiving       merits commendation here as well. At
new community will go under contract by         which we have encountered, and we have       holiday to do more work. As a result of       one point in 1999, Linkhorn’s outstanding
mid December, and several other strong          had some people really rise to the           her efforts, the property saw a 33%           work order count stood at over 400. Now,
acquisition prospects exist.       That’s       occasion to meet that opportunity head       reduction in delinquency in November.         each week the property completes all but
impressive, and we all can be proud to be       on.                                                                                        a handful of service requests under his
                                                                                                Melissa Good is also another fine
a part of such a success story.                                                                                                            very skillful direction.
                                                    Certainly there are more examples than   example. As our corporate trainer, she is
    As organizations evolve, their              I can list, but I’ll begin with Ronnie       frequently called upon to assist when we         This list is by no means
corporate culture tends to evolve as well.      Murdock, maintenance technician at           take over new properties. Recently, I         comprehensive.      But what do those
Frequently, a corporate culture takes on        Treetop in Raleigh.           We needed      requested that a c  omplete lease audit be    mentioned and others as well have to look
an identity which can be discerned by           maintenance coverage in Williamsburg         completed before month end at our latest      forward to within the organization? How
certain phrases and sayings which become        due to the abrupt departure of our only      acquisition, Marlin Lakes. In order to        about increased responsibility,
popular. As I have discussed in previous        maintenance person at that property. If      accomplish this, she came to work at 6 a.     promotions, higher bonuses and more
editions of this newsletter, I worked for       we had an emergency call, there was          m. one morning, which was the only way        income!
16 years for an organization which was          simply no one to respond. At a moment’s      that she could get the work done. She
directed by some very bright men with a         notice, Ronnie packed his tools and          also did not return home to Lancaster              So the questions remains. Are you
military background.         So I became        headed to Williamsburg at extreme            until nearly midnight that Friday night in    ready to step up and to be counted among
accustomed to the many sayings like             inconvenience to his family.                 order to get everything wrapped up.           those who qualify for the expression
“loose lips sink ships,” “if they are not for                                                                                              “Good people equals problems go
                                                   Sue Brennan, our property manager at         We have also benefited from a number       away.?”
us, they must be against us,” “tough times                                                   of other performances which, while
                                                Treetop, is another excellent example.




                                We’re not surprised            to be very successful in this industry, and a very          manager at two communities.
                            that when she isn’t                promising career began!
                            working, she enjoys                                                                                But it was not long before Jeff Shumaker
                            riding       Harley                    It wouldn’t be long before the opportunities for        discovered that Suzanne was living in his market
                            Davidsons with her                 promotion began knocking at Suzanne’s door. In              and extended the opportunity to become property
                            husband, zipping up                1986, she was offered the position as assistant             manager at Alcoma on the Green. And since she
                            and down country                   manager, and readily accepted. Not being someone            has become a member of the PRG team, she has
                            roads. For Suzanne                 who likes to move too quickly from one company to           already notched some impressive achievements. In
                            Hanovick’s approach                another, Suzanne remained in that capacity for three        particular, she won the coveted Top Gun
                            to managing Alcoma                 years. However, in 1989 she was approached by               Collections Award in September, and tied for that
                            on the Green is most               Mid-America Properties with an opportunity to               same award in November with a zero delinquency
                            aggressive, requiring              become assistant manager of The Sailwinds at Lake           rate!
                            agile movements,                   Magdalene, a 798 unit community situated in
having a firm hand in control, and always knowing              Tampa. The opportunity for advancement was                      Suzanne notes that she loves the buildings which
exactly where she is going.                                    extremely attractive, and Suzanne enthusiastically          she manages, which consist of two highrise
                                                               accepted.                                                   buildings situated in a pretty Pittsburgh suburb not
   Suzanne is native to the Pittsburgh area. She was                                                                       far from the golf course from which they take their
raised in the lovely North Hills area, and graduated               Suzanne remained with Mid-America at                    name. She also states that she is looking forward to
from North Alleghany High School in 1976.                      Sailwinds for nine years. In 1995, she became               the many improvements planned for Alcoma in
Several years thereafter, she was invited to visit             manager of the property, and directed a $2 million          2001.
Florida by one of her five brothers, and liked it so           renovation program which completely transformed
much that she decided to stay!                                 the community. During her tenure as manager, she               And when it comes time to close the office
                                                               also won awards for Greatest Increase in Revenue,           doors, Suzanne and her husband are excited about a
    Suzanne’s first serious position was working as            Greatest Growth in NOI, Highest Economic                    new colonial home which they are building. And if
an auditor for Honeywell, a position that would                Occupancy, and was also recipient of the Curb               they are not at the construction site, they can usually
seem like a natural one for her, given Suzanne’s               Appeal Award.                                               be found cruising the highways and byways on their
attentive approach to detail. Like so many of us                                                                           two Harleys, which Suzanne enthusiastically points
however, her decision to enter the field of property               In 1998, personal circumstances intervened and          out consist of a “49 panhead and a ’93 softtail.”
management was a bit unusual. In 1984, Honeywell               Suzanne decided to relocate back to Pittsburgh.
laid off 1400 employees, including Suzanne. She                Upon her return to the Steel City, she went to work            Sort of like work, Suzanne: firmly in control, no
had been considering a career change, and decided              for Gables Residential as a senior propert y manager        waste of time, and always knowing exactly where
to approach DBA Management Company for a                       running two communities.             However, the           she is going!
position. They quickly recognized that Suzanne had             communities which she managed were soon sold.
both the personality as well as the attention to detail        From there she joined NDC and was the assistant



                                                                                      Page 2
                                       T HE PRG HONOR ROLL

                Show me the Money!                                                             Superstar Award Winners
                                                                                   .


                                                                                                                      AUGUST
               THIRD QUARTER, 2000                                                                           Ronnie Murdock, Treetop
                                                                                                             Joe Chernay, Ambassador
                                                                                   August is traditionally our toughest month of the year, and this year we had
1. Marilyn Fields                McKee Place                  18,696               two great performances which more than met the challenge! Ronnie
                                                                                   Murdock, maintenance technician from Treetop, moved on a moment’s
2. Clarissa Prosser               Cascades                    11,034               notice to Country Club in Williamsburg to perform all maintenance
3. Joyce Kolk                    Flagler Pointe                9,837               responsibilities when that property was left with no coverage.

                                                                                   And Joe Chernay put on a spectacular leasing performance at one of our
Marilyn Fields from McKee Place in Pittsburgh                                      toughest properties to market, The Ambassador in Pittsburgh. In the month
surged into the lead with a great month in September                               Joe had 21 deposits on 68% closing! This is a leasing performance which we
                                                                                   suspect will be tough to beat for a long time to come!
to take home the hardware for the third quarter year
2000!      This was certainly an outstanding                                                                       SEPTEMBER
accomplishment given that she directs the oldest                                                           Marilyn Fields, McKee Place
property in the portfolio! Clarissa Prosser, always a                              The month of September brought us our second consecutive winner from
                                                                                   Pittsburgh! Marilyn Fields directs one of our toughest properties, the all
contender when it comes to making money, finished                                  student McKee Place. And in September, under her direction, leasing went
in second place. And Joyce Kolk from Flagler Pointe                                so well that occupancy rose to 98.6%! And her staff also did a spectacular
                                                                                   job in preparing all those units for move-in! This was a great performance
in St. Petersburg extended her run among the top                                   under extremely difficult circumstances. And Marilyn’s management style is
three!                                                                             so organized that she actually caused what could have been chaos to operate
                                                                                   as a smooth transition!                                          (cont’d below)




        Top Gun Collections Winners                                                                                  OCTOBER
                                                                                                            Howard Apgar, Chanticleer
                                                                                   Howard Apgar, maintenance technician from Chanticleer in Virginia Beach, was our
                            AUGUST                                                 winner in the month of October. Howard did a really fabulous job in not only
                                                                                   reducing outstanding service requests, but also did a great job in the quality of which
Shannon Danylo transferred from the Ambassador to Alcoma and seized                they were completed. Since his arrival at Chanticleer, call backs have been virtually
control immediately to win Top Gun Collections in her very first month!            eliminated at the property!
1. Shannon Danylo            Alcoma                   $1.86
2. Jennifer Percell          Country Club             $2.13
3. Michelle Riley            Lancaster Green          $2.16                                    Top Gun Leasing Winners
                                                                                   Linkhorn Bay continued its dominance in leasing with Ann Rhoads winning in August
                         SEPTEMBER                                                 and Scott Ferguson taking the title in September. But the property was not without
                                                                                   strong challengers! Shannon Danylo leased 22 at Hyde Park in August, Gisella Arias
In a continuation of the trend in August, Suzanne Hanovick joined PRG              finished third with 12 deposits in September, and then won the competition with 23 in
and immediately led the company with the lowest delinquency in                     October!
September!                                                                                                            AUGUST
1. Suzanne Hanovick          Alcoma                   $0.50                        1. Ann Rhoads                         Linkhorn Bay                           33
2. Jennifer Percell          Country Club             $0.65                        2. Tracy Seawell                      Linkhorn Bay                           25
3. Clarissa Prosser          Cascades                 $3.74                        3. Shannon Danylo                     Hyde Park                              22
                                                                                                                    SEPTEMBER
                           OCTOBER                                                 1. Scott Ferguson                     Linkhorn Bay                           22
Clarissa Prosser had a fabulous month in October with only $0.10                   2. Tracy Seawell                      Linkhorn Bay                           13
delinquent. Her performance was sufficient to finally break Alcoma’s               3. Gisella Arias                      Flagler Pointe                         12
winning streak!                                                                                                      OCTOBER
1. Clarissa Prosser          Cascades                 $0.10                        1. Gisella Arias                      Flagler Pointe                         23
2. Joyce Kolk                Flagler Pointe           $1.17                        2. Liz McIndoe                        Linkhorn Bay                           20
3. Michelle Riley            Lancaster Green          $3.97                        3. Scott Ferguson                     Linkhorn Bay                           15


                                                                          Page 3
                                          PRG versus the REITs
                     4th Quarter 1999 - 3rd Quarter 2000                                        Well, it happened again! Those poor
                                                                                            rumbling, bumbling REITs just couldn’t
                10
                                                           Post                             get out of their bureaucratic ways once
                8
                                                           Summit                           more. And because they got so caught up
                                                                                            in their red tape, we had to show them
      Percent




                6                                          Cornerstone
                4                                          United Dominion                  how a young, scrappy, agile organization
                2                                          Equity                           can really get results! This issue we survey
                0                                          Home                             year over year numbers, and the results are
                               1                           PRG                              the same. Unlike our national election,
                       Stabilized Basis                    AIMCO                            PRG wins in a landslide!


                                                             PRG Real Estate Management, Inc.
                                                        2701 E. Luzerne Street, Philadelphia , PA 19137
                                                          Phone: 215-744-1200 Fax: 215-744-4042
                                                              Website: www.prgrealestate.com



                       Meet the Team Behind the Scenes!
                                             They are the engine that drives the      Janie Shippen, Assistant Controller
                                         machine. When that flashy sports car
                                                                                          Prior Real Estate Management, Inc.
                                                                                         PRGto becoming an employee at PRG, Janie worked for the ABC Company,
                                                                                                   from E. Luzerne during
                                                                                      which grew270121 stores to 103 Streether period of employment. That was
                                         cruises down the road, everyone sees
                                         crisp design and first rate detailing, but
                                         no one sees the engine. You know it’s                                      PA 19137
                                                                                                 Philadelphia,PRG on May 5, 1997, less than a month before PRG
                                                                                      great experience for PRG, given our growth from 8 properties in July of ’98 to 17
                                                                                      at the moment. She joined
                                         there, and the vehicle sure wouldn’t be                  Phone: 215-744-1200
                                                                                      took management of its own properties in house. Her description of the early
                                         worth much without an outstanding,
                                         finely tuned engine to drive it.                           Fax: 215-744-4042
                                                                                      days within the organizatio n are particularly enlightening, with boxes and empty
                                                                                      desks everywhere, “it was crazy.” An avid Eagles fan, one is advised to seek
                                                                                           Website: Mondays following victories by the green and white!
                                                                                      special favors on www.prgrealestate.com
                                             In a sense, that is how we look at our
                                         accounting department. They are the
                                                                                      Holly Rosenberger, Payroll Supervisor
                                         people behind the scenes, and
                                         machinery that makes the vehicle work.           As import ant as are all others within the department, here is something to
                                         Now let’s take this opportunity to           remember about Holly: She’s the one who makes sure that you get paid! Holly
                                         introduce to all of our new employees        joined PRG on July 22, 1998, and previously had worked as payroll
                                         the best support group in the land!          administrator at U.S. Trust in Boston. Since becoming a member of the PRG
                                                                                      team, Holly has done a simply masterful job of helping us to absorb nine
Peter Yesner, Chief Financial Officer                                                 properties, with payroll having never experienced a glitch. Believe us when we
                                                                                      say that given her area of responsibility, if there were any problems, we are sure
    Peter joined PRG in April of ’97, and was the first new employee in a group
                                                                                      that we would hear rather promptly!
that evolved into the PRG management entity. His background prior to PRG
saw him move from Temple University to Price Waterhouse, Olympus
                                                                                      Dorothy Beattie, Accounts Payable Processor
Management, Rouse and Associates, and Liberty Property Trust. His joining
PRG was critical to the creation of our financial reporting system. In addition to        If your property is in Pennsylvania, Dorothy is the one who makes sure that
being the leader of our accounting team, the final word on PRG’s accurate and         your vendors are paid on a timely basis, and thereby ensures that the supply line
swift financials, he also is the master architect of our PRG’s entry into             is never cut. Dorothy joined PRG in May 1997 and was one of the original
cyberspace.                                                                           employees in our accounting department when it was first created. If your
                                                                                      property is within Dorothy’s area of authority, we are sure that the bills are
Bobbie Volpe, Controller                                                              always paid , and your questions are always correctly answered.
   She’s the person you speak with most often when Rent Roll just won’t let you
                                                                                      Judy Taitz, Accounts Payable Processor
do what you want. She never turns down a phone call from the field, and if we
took a poll, she would undoubtedly win every month as the field’s vote for                Judy is the most recent addition to the PRG accounting group, having joined
Superstar! Bobbie actually came to work for Pennsylvania Realty Group in              the company in November 1999. She is responsible for accounts payable at all
October of 1995, long before PRG Real Estate Management Inc. was even under           properties in Virginia, North and South Carolina and in Florida. And thanks to
consideration. Since that time, she is the one who works countless hours to           her diligent and accurate work, when you tell your vendors that the check is in
ensure that the machinery always works the way it was intended to.                    the mail, you can be assured that it really is. And when lunch rolls around, Judy
                                                                                      is Queen of the crossword puzzle. She’s great at them!



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