Avalon Bellevue

To maintain itself in a year marked by high vacancy, Avalon Bay Communities preached rigorous financial management and customer service.

The $5 billion investment firm also tried to meet market rates on rents and concessions, said David Kirzinger, vice-president of property operations for the Pacific Northwest.

“We just had to accept the fact that our communities weren’t going to be as full as they were a year ago,” he said.

Avalon started developing in Seattle five years ago after taking over seven communities with 2,000 apartments built by Trammell Crow. It focuses on “high barrier-to-entry” markets like Seattle and San Diego — cities with less available land than Dallas or Phoenix.

Avalon has since developed 12 communities with 4,000 apartments in the Seattle area, including Avalon Bellevue and Belltown.

“We talk about homes, not units. We have communities, not projects. We have residents, not tenants,” said Kirzinger, offering Avalon’s mantra.

Things slowed for Avalon late last year. And with an 8 percent vacancy rate — the goal going into 2001 was 4 percent — Seattle sat near the bottom of Avalon’s markets, Kirzinger said, second only to the San Francisco Bay area.

“Two years ago it was the best; last year it was the worst,” he said. “The first half of 2001 was fine, but the market softened in the second quarter and continued in the third and fourth. Fortunately, a good start equaled a bad end of the year, so we were OK.”

Rather than push concessions to meet the previous year’s 96 percent occupancy rate, Kirzinger said Avalon lowered its goal to 92 percent. The firm offered rents that varied by floor plan. “The way we see it, we’d only be stealing residents from someone else,” he said.

To make the most of 2001, Kirzinger said, Avalon tried to add value: It had a third-party firm complete a customer service survey and finished a new property management software program. “You can’t control the market, but you can control your expenses,” Kirzinger said.

Avalon has plans for communities at Eighth and Madison in Seattle, in downtown Bellevue and in Kirkland’s Juanita area. As 2002 progresses, Kirzinger said Avalon and similar firms face rising property taxes and insurance costs.

“We believe the national economy will come around in the second or third quarter of this year,” he said. “It may be a little tough, but it will come back.”