Organization Experience/Transaction Costs
The organization that comes to mind is one of my old workplaces. I used to work for a company called CA Ventures, a company specializing in the leasing/building of luxury student housing all across the Untied States on various college campuses, including the University of Illinois.
Their headquarters are located in Chicago Il, but you may recognize them for their properties in Champaign.
HERE, another one of their many properties, located near the UIUC campus off of fourth and Green. Boasts a rooftop terrace with hot tub, gym, sauna, golf simulator, electronic self-park parking garage, etc.
I picked this organization because it was the first company I worked for with a structured hierarchy of employees. At the bottom sat the Leasing Agents and Brand Ambassadors (I was a leasing agent). Next on the totem pole were the Leasing Professionals (pretty much just full time Leasing Agents). Above them was the Leasing Manager, and above he/she was the Property Manager. All these people were crammed into one office, having different jobs while also knowing where they stood in the lineup. This created some interesting relationships among the employees, mainly because we were all so different in age and power (when it came to the company).
After some time, I left CA Ventures and moved onto another company. In the time I was gone, being from the end of the 2015 school year and coming back this fall, an entirely new staff had been implemented. When the buildings were finally finished, I stepped into one of their offices (HERE's) to say hi to some old employees but much to my surprise, none of them remained. Aside from that, the building was in utter chaos. The walls were not finished, the elevators still had plastic wrap on them from the factory, the hot tub was not running yet, the automatic parking garage was far from automatic, meaning not working, the list goes on and on. Along with the unfinished building that looked nothing like the 3D renderings we had see oh so many times at work, the employees had absolutely no idea what they were doing.
It may have been that the new staff were still getting their bearings in a new workplace, but it just seemed like the entire building and staff in it were shaky and unprofessional, nothing like what the residents had been promised. You would think that a company with such a high success rate of opening properties at other colleges would know exactly how to open up a new property on this one. But then I thought, maybe it was the structure of this branch of the company that failed. Everyone was constantly in each other's space and needing to meet nearly impossible deadlines, and when push came to shove (meaning the opening of this new building) they cracked under the pressure.
Aside from that, some transactions costs included commission. Each and every employee, no matter what title, got commission if they sold someone on a property, specifically 25% of one month's rent. Shockingly (sarcasm), they have gotten rid of this incentive, yet another example of how this company is drastically restructuring the way it is run.
Luxury apartments for students! Does that make sense? If so, what sort of student rents such an apartment? I will return to that question after making some other comments.
ReplyDeleteYou might have spent a bit more time on what it is that a leasing agent does versus what it is that a brand ambassador does. Both of those are just labels to me. Does one show the apartments to students and the other works on getting them to sign a contract? Or is the division of labor something else?
There is a lot of seasonality to the rental apartment market in CU, particularly for apartments within walking distance of campus. Does that mean that the work you did also has a lot of seasonality in it? If so, you might have talked a little about how the staffing adjusts to whether demand is high (in season) or low (out of season). A little bit on that would have been interesting.
Enrollments on campus are at an all time high this semester and they may go higher in the future. Further, international student enrollment is on the increase. Those demographic factors are likely driving much of the new housing construction.
Finally, let me note that there is an obvious risk to renting an apartment in a building where the construction is not yet completed. There is then the question of who bears that risk - CA Ventures or the renters. Perhaps you don't know who bears the risk in this case, but if you do it might have found its way into your post. The (sarcasm) sentence that you concluded with I interpreted as the company being stingy with its employees. What about how it treats the renters?
Luxury apartments for students? Yeah it sounds ridiculous, but is this actually "luxury," or just a really nice dorm with a kitchen thrown in? I have had the opportunity to spend some time at HERE Apartments and what I have noticed is that most of the students who live in these luxury apartments are international students. Which makes sense simply because the majority of these students (or student's parents) are paying upwards of 40-50 thousands dollars for tuition already that the price for these apartments is within their budget.
DeleteAnother perk when it comes to living in these types of apartments is the fact that these students do not have to worry about separate bills. There is one lump some (including water, electric sewage, gas, etc.) that they pay monthly and that is it, giving off this vibe that they are living in a luxury dorm. This is great because many of these parents on the other side of the planet can link their accounts and not have to worry about anything besides their child succeeding at the University of Illinois.