HOUSTON – (Realty News Report) – Kate Good began leasing apartment homes when she was 19 years old. Right off the bat, she leased over 100 apartment units in one month. Amazingly, the leasing phenom didn’t receive immediate praise from her boss.
Today, Kate Good, principal with Hunington Residential, is developing apartment communities, including a very innovative new multifamily community near Houston’s Washington Avenue.
Kate Good was a guest on THE RALPH BIVINS PROJECT, a podcast produced by Realty News Report.
Here is an excerpt from Kate Good’s appearance on the podcast:
Ralph Bivins: Today we are talking about a field that is changing rapidly – apartments. Today’s apartments are not your grandpa’s apartments. Our special guest is multifamily developer Kate Good of Hunington Residential, which is the multifamily arm of Hunington Properties of Houston.
Kate Good: Thank you, Ralph. I’m an avid listener to the Ralph Bivins Project and an avid reader of your reports.
Ralph Bivins: Kate, I’m going to start with an easy question. What is the most surprising trend in the industry as we are coming out of this COVID pandemic?
Kate Good: I think the most surprising single topic that I’m becoming aware of is quality of life. How do we define this, both in the pre-COVID and post-COVID eras? What has changed and what are we carrying forward? I hear a lot of discussion about the fact that apartments are getting larger. This trend has been going on for more than five years. It’s not a change related just to COVID, but it’s something people are probably thankful for, because during COVID, they needed to add a home office or additional space to spend more time in. This is a quality-of-life issue. We are going through a bit of a renaissance; redefining what it is we need in a home. A lot of trends are showing themselves very strongly. How do we define that quality of life?
When I first started leasing apartments around 1989, we talked a lot about what quality of life meant to renters. The questions back then were: How close are you to a Starbucks, to a Blockbuster Video, to the grocery store? These are all there now but are considered from a different angle. Questions now are: How close is the access for an Instacart to deliver my groceries, is there a Grub Hub to bring me my meals, can I stream TV or get Netflix? The quality-of-life issues are still there. The Starbucks is still important, but now, what renters really want is a neighborhood where they can walk to a Starbucks and not take their car. The issues are there, the difference is how we are rolling them out. That’s the trend I’m seeing, and which is impacting us.
Ralph Bivins: It seems people have had to adapt with new delivery methods.
Kate Good: It seems each time we build a new apartment community, we have to design a new system of delivering packages because the last apartment community is still struggling with an issue. We try to solve it, but we improve every time. We still haven’t found the solution, the best way to deliver packages. I would put this in the top 10 quality of life issues. We are paying attention to these things; we are talking to our on-site teams, about where their pain points are and where the residents’ pain points are. We have to solve this. We are in the development stage for a lot of communities that are in my pipeline. But I know in my head that in two years, when we open, it probably won’t be enough to say we’ve solved the problem.
Ralph Bivins: Another thing I see: The garden-style, two-story apartment is not as prevalent as it used to be. You have to construct a bigger, taller structure to make it financially feasible. Then, you have tenants living in a five-story project. Is it a challenge to deal with a taller building?
Kate Good: In our portfolio, we offer three types. First is a three-story, garden-style walkup. The third floor is traditionally difficult to rent. We do not build a two-story product. Economically, it doesn’t make sense. The cheapest unit is usually the top floor apartment. We are currently incentivizing this apartment in an effort to encourage people to rent there. We are exploring the idea of longer buildings with elevators to make the third floor more attractive.
The second product is the 4- or 5-story wrap apartment. The parking is typically structured with some surface spaces available. What’s nice about this is you can park on your own level and access your apartment without walking up or down stairs or using an elevator, if you don’t want to.
The third is a mixed-use, micro project. We are really excited about this, and we are racing to get the first one open. This project offers retail on the ground level and on floors 2 through 6, it is 100% a micro-apartment community. There is also a six-story parking deck which allows you to park on the floor where you live. This way, you can avoid the stairs and elevators altogether.
The Micro Apartment
Ralph Bivins: The micro apartment. Tell us about it.
Kate Good: One thing I know from being in this business is that the smallest apartment is always the first to lease up. In every transaction, I say, ‘Give me the smallest unit’ and it will be the first to lease up. For us, the smallest apartment was about 600 SF. That’s a very efficient apartment, one that gives you the feel of a one-bedroom unit and which generally has sufficient square footage. So, we asked ourselves, what would happen if we took away some of that square footage? Is it still functional and can someone get all their furniture from another unit in there? In other cities outside of Houston, these are extremely popular. Call them micros, efficiencies or studios. The name is interchangeable. We called them micros because it was trendy. But when we talked to potential renters, the word ‘micro’ scared them a little bit, but ‘studio’ made sense. So why not do it? My business partner, Sandy Aron, (president of Hunington Properties) is a genius for finding great property. He located a wonderful site in the Washington Heights corridor of Houston that was too good to pass up.
Our company has made its mark in retail, so we knew this would be a great retail site. Because of the cost of the land, my business partner came to me and asked if we could also put in apartments. I said yes, but my feeling was to go with all micro units. So, we got with our architects, Sanford Steinberg and Steinberg Dickey Collaborative and worked on it. We asked ourselves, what does this look like if we scale back, maximize storage and place all the furniture one needs inside the unit? And keep it under 500 SF. Can we get enough livable space in there? So, I went to the owners of the apartment complex next door, and I asked them what they would do. He said if they did it again, they would do all studios. So, I felt my hunch would pay off. I liked the way it looked on paper. They liked it when we discussed it in focus groups and among renters. There were a lot of reasons to do it.
Leasing 100 Units a Month – No Good Deed Goes Unpunished
Ralph Bivins: Before you came in, I was reading your biography again and noticed an incident that took place early in your career. You leased 100 units in one month. That’s amazing. I imagine they immediately said, “This is a rising star.”
Kate Good: The truth is, Ralph, I actually got in trouble for that. Well, here’s the backstory. I got 53 leases and 48 renewals in one month. It wasn’t my first month, but it was during my first year. The property I was working at was bond financed, which means there’s a lot of paperwork.
Anyway, my files got audited, and there was a big bonus check – particularly big for me as I was 19 at the time. They held my bonus check because my files were not perfect. I said I couldn’t let this happen again, so I hired a temp to come to the office and do my paperwork. One day, the property manager came in and saw this new person working at my desk. He asked who she was, and she gave her name. She said, “I work for Kate” and he said, “No one works for Kate.” I was out working on a lease at the time – and thank goodness I got it.
When I got back to the office, the property manager immediately called me in and said, “I don’t know whether to fire you or promote you.” I explained the situation and told him I needed to get the paperwork done. There was a lot of paperwork.
That afternoon, he went to a meeting with the regional manager, and they talked abut what happened. He wasn’t bragging or anything, but when every manager there said, “I’ll take her,” he figured he’d have to find a way to accommodate me. The rest is history.
I’ve always loved leasing apartments and I’m good at it. It’s great to be able to build this new development. Nothing brings me more joy than visiting an apartment community on a Saturday and seeing people enjoying their balconies, putting out welcome mats, takng pictures of bringing their first child home, talking to neighbors and enjoying the pool. We are the makers of memories and it’s an honor to be in the housing industry.
July 8, 2021 Realty News Report Copyright 2021
File: Advancing Apartments: A Podcast with Kate Good of Hunington Residential
For more about Texas real estate, check out the book Houston 2020: America’s Boom Town – An Extreme Close Up by Ralph Bivins. Available on Amazon http://tiny.cc/4a2g6y
Houston 2020 Ebook version https://tinyurl.com/4xm7z8b5