TPCO's Property Management business plan is executed using the following strategies: Front Office and Back Office. Front Office involves improving the student living experience by targeted CapX improvements, technology upgrades and innovations and the creation of a vibrant student culture through the use of multiple social events. Back Office focuses on implementing TPCO's Management by Measurement (M by M) platform. The M by M platform involves setting targets for occupancy and NOI, holding team members accountable for results, and using performance based pay to reward goals met.
Although many of the macroeconomic conditions and the budget cuts facing schools are beyond the control of a property manager, the manager can still ensure whether or not the tenant's expectations are being met and exceeded. Current economic factors may limit rent increases at many properties, but occupancy and operating expenses remain very much within the control of the property manager. Over the past few years, the company has taken numerous properties and repositioned them within the market in order to grow net operating income. In 2013,the TPCO portfolio reached an overall occupancy of 97% and saw a 3.4% increase in rates. Our renewal percentages have increased as well, seeing a 5% increase from 35% to 40% across the portfolio year-over- year. Thus far in 2014, TPCO is achieving a 2.6% rent increase in 2014-2015 pre-leased rents over 2013 in-place rents and is currently approximately 57% pre-leased on average across the portfolio.