2. FREEMAN WEBB COMPANIES
Founded in 1979 with one multifamily property and 1 employee
Currently Freeman Webb has over 450 employees and
owns/manages a long-term portfolio of income producing properties
comprised of 16,000 apartment units under ownership/management
as well as 1,000,000 sf of office and retail space
Annual Rent Collections of $100 Million
Properties owned are primarily in Tennessee, but previously the
company owned multifamily properties in
Alabama, Indiana, Ohio, Missouri, Mississippi and Texas
Freeman Webb Companies is comprised of the following divisions:
Acquisitions & Investments
Property Management
Construction Services
Mortgage Services
Residential Real Estate Brokerage
3. FREEMAN WEBB:
Acquisitions & Investments
Focuses on the acquisition of multifamily properties for our
investor clients
Historically have acquired 1970’s and 1980’s vintage assets
Perform large-scale rehabs, reposition and stabilize assets for
long-term holds
Through asset management, Freeman Webb looks to
maximize investor yields by many methods including
reduction of individual property operations, namely reducing
property operating expenses
Business strategy has helped the company to grow by 50% in
the last three years
4. FREEMAN WEBB:
Property Management
Management company provides property management
services for Freeman Webb-owned multifamily and
commercial properties
Also provides property management services for clients;
has roughly 6,600 apartment units and over 500,000 sf
of commercial space in our management portfolio
Named the 2010 National Property Management
Company of the Year by the National Association of
Home Builders
5. FREEMAN WEBB:
Construction Services
Manages large-scale rehabs of new
acquisitions and/or current assets that are
looking to be repositioned
Typically has over $20,000,000 worth of
rehab in process at any given time
Based on rehab scope and property
needs, rehabs will include full interior and
exterior renovations
10. FREEMAN WEBB:
Construction Services
Interior Unit rehabs include cabinet replacement, counter
top replacement installation of new flooring, among other
items
There are also a number of opportunities for installation
of energy efficient appliances, windows and doors
Repositioning of properties through extensive interior &
exterior rehabs provides more quality housing
opportunities for individuals and families while also
extending the useful life of the asset
11. DEMAND FOR MULTIFAMILY
HOUSING
Multifamily properties (5+ units) make up approximately
20% of the nation’s housing supply but that percentage
will increase
Apartment demand is at an all-time high for several
reasons:
I. Demographics
II. Shift in Psychology
III. Declining Homeownership Rates
IV. Difficulty in Getting a Mortgage
V. Pent-up Renter Demand
12. M U LT I F A M I LY
D E M A N D
I. DEMOGRAPHICS
Number of People Turning 30 Years Old vs. Homeownership
Rate
13. M U LT I F A M I LY
D E M A N D
II. A SHIFT IN PSYCHOLOGY
Young peoples’ attitudes towards homeownership have
changed
One reason is they are seeing people trapped by
“underwater” mortgages and millions of foreclosures
They believe that a home is no longer the biggest
investment of a person’s life, but rather that they can
rent and still live how they want
They are free to pick up and move if they get a job
opportunity in another city
Source: “Renter Nation”, Gene Epstein, Barron’s Magazine
14. M U LT I F A M I LY
D E M A N D
III. DECLINING HOMEOWNERSHIP
RATES
The homeownership rate has fallen to 65% from its peak of 69% in 2004
It is likely to fall below 64% by 2015, if not sooner
Conversely, it is anticipated that the national rental rate will rise to 36% by
2015
Every percentage point increase in the rental rate = 1.3 million households
joining the renter pool
Average household size is greater than two people, so analysts estimate
10 million extra renters could be moving into the market over the next five
years
Apartment supply being delivered is, in most estimates, less than half of
what is necessary to meet the expected demand (Marcus & Millichap, 2012
Apartment Outlook)
Source: “Renter Nation”, Gene Epstein, Barron’s Magazine
15. M U LT I F A M I LY
D E M A N D
III. DECLINING HOMEOWNERSHIP RATES
(continued)
16. M U LT I F A M I LY
D E M A N D
IV. LESS LIKELY TO PURCHASE A HOME
First-time home buyers (the bulk of which are under 35 years of
age) now account for roughly 30% of home sales, down from as
high as 50% in 2009
The question becomes “how many renters can actually qualify for a
mortgage?”
Many in this generation have gone back to school for more
education and have taken on large student debt obligations
Stricter mortgage underwriting standards, which were much
needed, are also making it more difficult for many in the younger
generation to qualify for a mortgage
17. M U LT I F A M I LY
D E M A N D
V. A GENERATION LIVING AT HOME
%
%
%
%
Source: “The Boomerang Generation:
Feeling OK about Living with Mom and
Dad”, Pew Research Center Report
(March 15, 2012
Put into
Perspective: the
highest the young
adult rate has ever
been was in the
1940’s when it was
27.7%. At its low
point in the
1980’s, this rate
was right at 11%.
18. MULTIFAMILY DEMAND LEADS
TO DEMAND FOR ENERGY
EFFICIENCY Freeman Webb and firms like it are examples of multifamily
investors who are looking to retrofit properties with energy
efficient technologies
Multifamily investors are hoping for want to utilize and implement
public and/or private programs that will provide assistance in that
effort
Other programs, such as Low-Income Housing Tax Credit
programs, can provide equity to incorporate energy efficiency in
property rehabs
Demand for multifamily units is at record levels, so the need for
these programs is greater than ever before
In the wake of the Great Recession, apartment renters are much
more price-sensitive than ever and more mindful of their monthly
expenses
Younger generations are more mindful of the environment in
general and desire to see energy efficiency and eco-friendly
properties
19. BUSINESS STRATEGY:
Combating Implementation Challenges
Ignorance of available programs and how to access/implement them
on the part of owners: educational events like today are essential
Some programs, like those that offer energy tax credits, are difficult
to qualify for or are cost-prohibitive
Owner’s need convincing of the merit of spending money on energy
efficient upgrades as opposed to other property upgrades or general
maintenance
Problem of Renter Perspective:
utility reductions are not yet realized by prospective renter
which makes it difficult to use as sales tool
Prospective renter’s are largely drawn by property condition
(curb appeal), property amenities (pool, playground, etc.), and
condition of unit
Owner’s reluctant to make upgrades where returns may not
be realized for years to come
20. BUSINESS STRATEGY:
Conclusion
Demand for multifamily units is at an all-time high
Multifamily owners currently have opportunities to incorporate
energy efficiency into their properties for new development
but also in property rehabs
Energy efficiency can reduce operating costs for properties
which typically lead to higher property cash flows and higher
investor yields
Data shows that the economic benefit for energy efficiency
can be substantially and it can be attained with the help of
existing programs
Energy efficiency can be an effective marketing tool with
respect to the leasing of multifamily units
Energy efficiency, aside from being the right thing to do, is
simply good business