Turning CapEx
STATE OF THE MARKET
In an environment of tightening margins, investors are
increasingly focused on cash
flow, exit prices, and cap rates
to protect returns.
STATE OF THE MARKET
At the same time, tenants are demanding updated, modern living spaces as new multifamily deliveries put pressure on owners to compete for occupancy.
STATE OF THE MARKET
Multifamily owners must meet tenant demand for high-quality renovations while managing tight budgets amid rising costs and labor shortages.
STATE OF THE MARKET
Where a lot is out of your control, agility in your capex project controls and delivery is critical.
Let’s walk through an example of how Banner gives you complete control over key CapEx decisions.
01
Guarantee at Least 3 Bids for All Projects That Matter
- Imagine that Coastal Properties is a multifamily owner with a 5,000-unit portfolio, is preparing to renovate a 200-unit property in a competitive market. They are planning renovations to the fitness center, pool, and dog run, among other things.
- On site, Coastal's construction managers start by documenting actual conditions and creating scopes of work, using Banner's mobile app. They later invite 5 vendors to bid using Banner's Bidding module.
- What would ordinarily have taken days of admin work and chasing, was reduced down to a simple workflow while on site.
- Having 2 additional bids gave Coastal strong negotiating leverage with its preferred vendor, leading to a 10% cost reduction, saving $100,000.
02
Decrease CapEx Spend with Flexible Cost Controls
- As the projects kick off, Coastal has a clear view of its remaining budget within Banner.
- Six months into the construction, the option for a better pool furniture package is proposed.
- Asset Management gauges that modern pools have become the driving force behind rent growth in the region, and approves Construction to move forward with higher-end options.
- Coastal is able to game plan various scenarios in Banner, and ultimately reallocate funds to cover the new furniture, with executive approval.
03
Eliminate Unnecessary Change Orders & Strengthen Key Vendor Relationships
- As the pool project advances, the contractor proposes one change order to add fancy life guard chairs and another to add a railing around the pool area, adding $50,000 to the project cost.
- Coastal's project manager double checks the proposal details and answers provided to the vendor in Banner, during the bidding process.
- He approves and immediately pays the required railing change order, to keep the project on schedule. However he rejects the fancy life guard chairs, as they are out of scope.
- By rejecting the unnecessary change order, the team avoids budget creep. The contractor appreciates the fast, clear decision making process.
04
Secure Funding Faster with Streamlined Lender Draws
- With the project progressing on schedule, Coastal submits monthly draw requests to their lender.
- In Banner, the budget had previously been uploaded and coded. All requests for payment were submitted and approved with supporting documentation, like invoice pdfs and lien waivers.
- What used to take days of work in formatting and reporting now takes 1 click in Banner.
- The faster funding keeps contractors paid on time and ensures no interruptions to the renovation schedule.
05
Fast-Track Unit Renovations, Shave 4+ Days per Unit Reno
- As the final phase of the renovation approaches, Coastal focuses on unit renos to prepare for peak leasing season.
- Historically, unit renovation times averaged 60 days due to coordination issues between property management and construction management. With Banner, the team gets notified of each next step, the second they need to take action—from reaching out to vendors, through make ready.
- During renovation, when a painter finishes ahead of schedule, the flooring team is notified instantly, allowing them to start work immediately.
- This reduces unit renovation times by one week, allowing Coastal to lease units faster and capture an additional $80,000 in rental income during the first month post-renovation.
Trusted by top companies
