Charles River Park, an apartment complex in Boston, is among the Massachusetts properties owned by Equity Residential. The Chicago-based firm has begun a nationwide “sweepstakes” to draw in new tenants and combat high vacancy rates.
The battle to attract new tenants and retain current ones has led many landlords and rental property owners to come up with appealing incentives in recent months – anything from rent-free months to paying for moving fees.
Last week, one of the largest apartment owners in the nation took it a step further by officially launching a nationwide “sweepstakes” to combat high vacancy rates and draw in new tenants.
Chicago-based Equity Residential, with about 50 rental properties in Massachusetts, launched a sweepstakes where prospective and current tenants and employees can win a $30,000 “salary,” $12,000 in rent, $4,000 in car payments, $4,000 in groceries and thousands of dollars in other gifts.
The sweepstakes is part of campaign known as “Take A Year Off … We’re Making Life Easy,” and is being offered at all of the 1,059 properties that Equity Residential owns in 36 states.
The idea for the sweepstakes came up during the second quarter of this year, said Chris Reilly, an Equity Residential area vice president who works out of the company’s Norwood office. Traditionally, the fourth quarter of every year is rough in terms of maintaining occupancy rates.
“We decided that rather than sit around and let things happen to us … we wanted to create some excitement around our communities,” said Reilly.
The sweepstakes comes at a time when Bay State real estate brokers and property owners, just like their colleagues in other parts of the country, are dealing with higher apartment vacancies.
For Massachusetts, the higher vacancy rate is particularly jarring because during most of the 1990s, the state experienced an extremely tight rental market – with vacancy rates dropping as low as 2.7 percent in the Boston metropolitan region, according to a recent report. The “normal” vacancy rate is considered around 6 percent.
The low vacancy rates and short supply of available apartments led to higher rents. According to the recently released Greater Boston Housing Report Card, which was prepared by Northeastern University’s Center for Urban and Regional Policy, median rents in Boston increased 39 percent since 1995, surging to a high of $1,076 in 1999.
But that has slowly begun to change. Boston real estate brokers point to various reasons for the rise in vacancies, including the economy, job layoffs, new college dorms and fewer international students searching for off-campus apartments. All-time-low mortgage interest rates are also making it more attractive for renters to become homeowners, further diminishing the pool of prospective tenants.
‘Significant Drops’
Equity Residential has felt the effects of the changing rental market, particularly in downtown Boston. Occupancy rates at Equity properties in Massachusetts vary according to location, according to Reilly. Rates have dropped in the last two years – anywhere from 2 to 5 percent, he said – and rents are also being cut at some locations.
Unlike the last recession, however, rents and occupancy rates in communities outside of Boston along the Route 128 corridor and in the western part of the state have remained steady, while downtown rents have suffered more.
“This time it’s the opposite,” said Reilly. “There have been significant drops in the downtown Boston market.”
The sweepstakes concept was tested on a smaller scale with similar contests in Atlanta and Southern California. Reilly said that participants in an Atlanta contest were able to win a home built by one of Equity Residential’s partners. The contests in Atlanta and Southern California provided impressive results. Traffic at Equity properties increased and the occupancy rate was boosted, according to Reilly. That encouraged Equity to broaden the contest and take it nationwide.
Participants in Equity Residential’s sweepstakes can enter to win prizes through Dec. 31. Current tenants can get multiple entries in the sweepstakes competition by renewing leases and referring other residents to Equity Residential properties.
Prospective tenants can enter the sweepstakes by visiting Equity apartment complexes or the company Web site and filling out an application. They can also enter by moving in to an Equity apartment.
Equity’s 7,400 employees also have a shot at winning the same prizes. Employee names are entered into the sweepstakes for a variety of performance achievements.
Equity owns units at Charles River Park and other Boston properties and in cities such as Quincy, Springfield and Lawrence. It also owns apartments in suburban communities like Needham, Canton, Franklin, Acton, Milford, Westwood and Agawam.
