Multi-family developer increases NOI and portfolio value through cost reduction
- $620M commercial real estate developer
- Multi-family portfolio of 20,000 units across 13 states
Thinking it would save time and money, a multi-family developer used in-house staff to identify where to cut costs. However, the initiative was pulling staff away from high priority projects. The team also lacked the resources needed for a comprehensive review. Leadership soon recognized that bringing in cost reduction experts was a better path to driving profitability.
This real estate developer engaged Silverback to identify and help implement strategic savings with the end goal to increase NOI. The developer determined it made better financial sense to outsource the cost savings initiative rather than try to do it themselves, especially with Silverback’s significant expertise.
Silverback’s subject matter experts collected and analyzed expense data across the property portfolio — reviewing more than 10,000 transactions from the previous 12-month period. The entire review and recommendation process, along with monitored implementation, had little drain on the client’s time and resources. With a deep knowledge base and a fresh perspective, Silverback helped the client realize significant savings across many non-labor expense categories.
Silverback delivered considerable annual savings that totaled $1,208,352 and went straight to a more positive NOI. The CEO was thrilled with the results and is confident the company is poised for continued growth and profitability despite unpredictable real estate market conditions.
ANNUAL SAVINGS REALIZED:
- 37% on IT equipment
- 24% on office supplies
- 26% (plus $82K refund) on telecom
- 31% on janitorial supplies
- 22% on waste
- 7% on utilities
“We’ve enjoyed very meaningful and measurable savings because of Silverback’s services. They were so professional in identifying savings opportunities and assisting in implementing the recommended strategies. They brought great, fresh ideas to the entire process.”
CEO, CRE Development Firm