It’s All About the Dogs for Apartment Building Investment

[Insert latest cute pet pic from your Facebook friends]
It Is All About the Dogs for apartment building investment according to industry insiders speaking at a recent Bisnow conference: Woodbranch Management President Philip Schneidau says Market Square’s dog run was the best thing about the project. (The second-best part is the building’s liquor license. “What happens is you get home from work, walk your dog, grab a bottle of wine and meet your neighbors,” Schneidau said. “It’s a great life. That’s the magic.”)

Here’s my Exec sum of their salient points:

The Demographics:

  • Households with at least one pet jumped 35% during last decade to 74.1 million
  • Dogs are the favorite pet, with 43.3 million
  • Dog ownership surging among singles and renters.

The Competitive Situation:

  • Being pet-friendly has shifted from competitive advantage to

industry standard.

  • Competitive disadvantage to not allow pets.
  • Not being pet-friendly can be the tie-breaker or something that instantly rules out a property.
  • Estimated being pet-friendly can boost occupancy at least 200 basis points.

The Financial Aspects:

New Construction or Rehab Considerations:

  • Dog parks cheaper than other amenities like tennis courts
  • Dog runs and parks more flexible and space-conscious, can be in parking garages or on roofs.

Design with pets in mind:

  • Hardwood floors and tile eliminate carpet change after pet move outs.
  • Window shades: PVC or faux wood increases durability.
  • Higher cabinet heights make it harder for dogs to scratch millwork and countertops.
  • Access to service elevators is also a consideration as pets can have accidents.

Cash Flow from Pets:

  • Nonrefundable deposit between $250 and $500,
  • Pet rent of $25 to $50
  • A pet-floor premium of $25 to $35.
  • With soaring number of pet owners, premiums quickly add up.

Policy Issues:

  • The Environmental Protection Agency says dog waste is an environmental problem on par with toxic chemical and oil spills.
  • Providing bags and plenty of disposal stations can go a long way.
  • For complexes with chronic problems, companies like PooPrints and P.E.T can catch culprits with DNA testing. For $40 at move-in, dogs’ cheeks can be swabbed so property managers can keep the DNA on file, matching samples to catch residents who fail to clean up after their pets.
  • As to the question of if all breeds should be allowed no advice was offered.

Going All The Way:

  • Developers are starting to offer pet-friendly amenities like grooming stations, spas and boarding.
  • At luxurious Mercedes House in NYC, the 2K SF pet spa treats pets like royalty.
  • Dog City offering day care, training, vets and grooming, huge hit
  • $250 annual membership fee plus monthly add-ons run from $40 $750

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