The Century City-based real estate company, which specializes in multifamily housing, launched a Covid task force aimed at keeping rent collections as close as possible to prepandemic levels.
Chief Executive Henry Manoucheri and his son Aaron Manoucheri, who works in acquisitions and capital markets at the company, started focusing on the issue during the early days of the coronavirus pandemic.
Collections at the company’s 60-plus properties are now at 95%; they were at 99% prior to the pandemic, Henry Manoucheri said.
“If we did not have the task force today and didn’t pursue people, I think our collections would have been as little as 50%, or best-case scenario at 70%. I think we’ve added a 35% margin by being very diligent about this,” Henry Manoucheri said.
And Universe Holdings’ prepandemic setup has lent itself well to the current situation.
“We’ve always had a collection unit in the office. We’re one of the only companies that has an internal unit in the corporate office,” Henry Manoucheri said.
Before the pandemic, there was just one person handling collections. Now Aaron Manoucheri is involved in the effort, as well.
“Our first point of rent collection is obviously our managers at our communities. We saw this storm coming and said we have to really be prepared,” Henry Manoucheri said. “The days when the rent just came in and everybody paid on time are over.”
Aaron Manoucheri has worked closely with renters to get them to pay.
Henry Manoucheri said it helps having the corporate office call about late or missed payments, as opposed to someone living in the building making the calls.
And while some renters are hostile, he said others need some sympathy.
“When Aaron is on the phone, he’s almost offering people a free therapy session,” he said.
Henry Manoucheri said the company makes it clear to renters that they will eventually have to pay. Just because there may not be evictions, that does not mean rent will be forgiven.
Of those not currently paying rent, he said, 70% of them really can’t pay. In those cases, Universe Holdings works with the tenant to develop payment plans. Not all renters are receptive, though, with about 30% taking advantage of the situation and choosing not to pay.
“If it’s a chronic late payer, in an environment like this, many of these individuals take advantage,” Aaron Manoucheri said.
Henry Manoucheri added that many people who really can’t pay call back to work on payment plans and are genuine about working with the company.
The situation has also created opportunities. Henry Manoucheri said that in some instances, they have offered to buy out tenants in rent-controlled properties where rents are below market value and have even offered rent forgiveness to them.
“Right now, people need money,” he said.
Beyond rent collections, Covid-19 has caused other challenges.
“It certainly is not an easy business anymore. It’s a very challenging business. It takes a tremendous amount of energy to do it well,” Henry Manoucheri said.
Because of the virus, the company had to close down gyms, pools and other common areas. Some of the amenities have since reopened.
The company now has offices open at its properties, a cha
And despite Covid-related uncertainty, Universe Holdings is interested in other opportunities.
“We are cautiously still pursuing the larger deals. We are focused on buildings that have a unique story where there is some distress,” Henry Manoucheri said, adding that the company is now in escrow on a property that’s 80% vacant.
“We are more keen right now on buying larger properties outside of Los Angeles and in the suburbs,” he added.
That’s because many people have been moving to the suburbs, Aaron Manoucheri said.
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