Success Story: Cost Savings in a 5-Star San Diego High-Rise Association
“Together, our general manager and FirstService Residential provide excellent service to the entire high-rise on a continual basis.”
- Brian Lawler, Board Member, Discovery at Cortez Hill
High-rise associations have equally high expectations associated with them. And for good reason. Residents of high-rises typically pay a premium for resort-quality concierge services, exceptional security, best-in-class customer care and of course, the finest amenities. The question is, how do you continually enhance service to meet resident expectations, make capital improvements that improve the high-rise’s reputation (and property values) and maintain the building’s complex infrastructure in a cost-effective way? To start, you need a highly skilled team, with specialists in engineering, human resources and budget planning as well as knowledge and experience with the complexities of urban high-rises.
Discovery at Cortez Hill is a 22-story, 199-unit luxury high-rise located in San Diego close to popular attractions like Balboa Park, Little Italy and the Gaslamp Quarter. FirstService Residential began managing the property in 2003. The amenity-driven building features a 10th floor pool deck and spa with resort-style cabanas, fitness center, barbecues, a community social lounge with kitchen, 24-hour business center and a courtyard for gatherings. Additionally, residents have access to full-time concierge and security with 24-hour video surveillance.
Discovery faced pressure because of its already established reputation as a luxury high-rise and desire to maintain relevance in a highly competitive marketplace. Like many urban markets in the United States, the high-rise is located in a desirable metropolitan area, with growing competition from new and extensively renovated high-rises. Maintaining and improving its brand requires a commitment to investing in capital improvements, but the high cost of building renovations and additions can often prevent board members from committing to them. Additionally, continual investment in preventative maintenance was critical for Discovery as there are a number of common area mechanical components that affect the entire building (as opposed to a traditional community where fewer common area components are involved).
To keep the building working optimally and keep up with the competitive San Diego high-rise market, Lee Newman, regional director at FirstService Residential worked with the highly engaged board and the support of the FirstService Residential Urban Team to prioritize preventative maintenance and capital improvements, while keeping costs down. As part of FirstService Residential’s commitment to enhance property values and improve resident lifestyles, the community has undergone a number of improvements during its five years under FirstService Residential management, including:
- Installed a variable frequency drive to save energy costs
- Changed all 24-hour lighting to LEDs (including all lighting for hallways, stairwells and the garage)
- Modified its employee structure to rely less on third parties and more on FirstService Residential associates to raise consistency of service
- Repainted and re-caulked outside of the building and upgraded luxury pool area to incorporate resort-style cabanas
“While our board has oversight into the association by election, our GM makes it run. With the continual support of the high-rise team at FirstService Residential, he makes our jobs easier and life in the building more enjoyable.”
- Brian Lawler, Board Member, Discovery at Cortez Hill
Capital improvements like the luxury poolside area continue to be a critical part of the high-rise’s solid reputation and ongoing relevance in the community at large. In fact, other high-rise managers in the area have told Lee how they want to replicate Discovery’s pool and resort-style cabanas in their own buildings. Lee said, “Discovery has become a very desirable and reputable high-rise in the San Diego area, and the shared vision and wholehearted commitment from the board and FirstService Residential to preventative maintenance, capital improvements and exceptional resident service has brought us there.” Despite yearly investment in capital improvements, the association continues to maintain healthy reserves, and assessments have only increased by 5% in the last six years, despite a 6% to 7% increase in utilities. With the support of the board, Lee worked in conjunction with the FirstService Residential dedicated finance and budget team of experts to ensure that maintenance and improvements were not only cost-effective, but saved money in the long-term. Additionally, through their collection attorney’s recommendations and FirstService Residential’s collection efforts, delinquencies have declined since 2013. Some detailed results:
- After an initial cost of $25,000 to install, the high-rise has recouped all costs
- Installation of LED lighting has resulted in lower overall energy costs, despite regular increases in utilities
- Customer service is more consistent and in line with expectations of 5-star service due to FirstService Residential’s global service standards and ongoing customer service training
- Consistent improvements to the building, such as the repainted exterior and upgraded pool area have strengthened the building’s reputation in the community at large
- Delinquencies have decreased by more than $150,000 over the past five years, contributing to an improved financial state
“Discovery has become a very desirable and reputable high-rise in the San Diego area, and the shared vision and wholehearted commitment from the board and FirstService Residential to preventative maintenance, capital improvements and exceptional resident service has brought us there.”
- Lee Newman, Regional Director at FirstService Residential
Smart investments in amenities can enhance your reputation in the community at large. Complete the form below to download our free white paper, “The Lifestyle Driven High-Rise: How to Stay Relevant by Keeping Your Building Ahead of the Amenity Curve.”