Kramer Properties visited the Reno Tahoe Tonight Show on 11-05-2019.
Topics discussed:
- Multi-family housing in Reno, NV.
- Contributing to the demand.
- Mayor’s initiative to build 1,000 homes in 120 days.
- Development Fees.
- Kramer’s House Midtown.
- Kramer’s House Downtown.
Click Here to view on The Reno Tahoe Tonight Show.
Transcript:
Oliver X:
We are joined by Chris Foti, Vice President of Kramer Properties, and Joe Kramer, the namesake of Kramer Properties. Good to see you guys.
Joe Kramer:
Thank you.
Chris Foti:
Thank you.
Joe Kramer:
Thank you for having us.
Oliver X:
Michelle Roberts, friend of the show. Good to see you, Michelle. Good to see you. Alright, let’s get into some… let’s talk about what you guys do. Kramer Properties has been moving the meter in multi-family unit housing in the much-needed Downtown and Midtown corridors. Talk about what you guys do.
Joe Kramer:
Well, you know, looking at the housing and everything that’s going on here, it’s kind of a complex problem. So, Chris and I, we have two business plans we try to really focus on. The first one is our bread and butter where we go in typical developer multi-family guy. We go in, buy a property, renovate it, put it back on the market, increase the rent, and then provide that to the people that are at that level.
Joe Kramer:
The second piece is that we have boarding houses, and the boarding houses is probably the most fun we have, right Chris?
Chris Foti:
Absolutely.
Oliver X:
It’s got to be, right?
Joe Kramer:
So much fun. Yeah, so it’s a shared living where you’ll have… each person will have their own bedroom, but then in the middle they’ll have basically their shower, and their water closet, and then outside in each room, they have a vanity sink, so that they can get ready and really have… a little bit of privacy outside that area.
Joe Kramer:
And it provides us a luxury to have the rents where it’s very affordable, between the four and six hundred dollar mark. And we’re having a lot of fun with that. It’s amazing. Right, Chris?
Chris Foti:
Absolutely.
Oliver X:
That is amazing. That happened at Dwight-Derby at UC Berkeley where you had a common space and then bedroom units around, and then individual bathrooms. Very cool, very cool. Innovative Joe Kramer and Chris Foti on the Reno Tahoe Tonight Show. Lots to get into with you guys. We’ve just got about a minute. Reno was forced to transition from a gaming-based economy during the recession to now a tech industrial manufacturing information, informed economy. Did Reno fail to anticipate the demand for housing that this workforce, this influx of people would actually bring? Did we just fail to anticipate that?
Joe Kramer:
I don’t know if failure is the word. It’s just a supply and demand ratio. The supply wasn’t here, the demand came in. It’s fortunate Reno was able to diverse like that, because you don’t want all your eggs in one basket. It’s the best thing that happened, but the repercussions of that from the infrastructure, the housing, everything else is not able to keep up. So I don’t know if failure is the right word. It’s just it grew so fast, which is probably a better problem to have than not growing, right?
Oliver X:
Yeah. For sure, for sure.
Jenes Carter:
We’re like, “Oh, we’re not ready. No.”
Oliver X:
First world problems. First world problems. Reno was the fastest growing city in America in 2018. I think Salt Lake City is that now. How do you guys address that influx? It must be exciting times for you.
Joe Kramer:
It’s exciting, but the same thing. It taps everything. It taps labor, it taps materials, it taps everything that we try to keep up. So, as a result of that, the trickledown effect, everything goes up.
Oliver X:
Everything does go up.
Joe Kramer:
And it gets passed on to me, then I got to pass it on to everyone else. And Chris, you know, he’s right hand guy. He runs all the economics. We do all the performance. Every day, what happens? Prices go up.
Chris Foti:
That’s right.
Joe Kramer:
Prices go up. I got to do something about that. I can’t just eat everything.
Oliver X:
No doubt.
Joe Kramer:
So there’s a little bit of an issue. Do you agree, Chris?
Chris Foti:
I agree, absolutely.
Oliver X:
Guys, the mayor’s initiative to build 1000 new homes in 120 days is quite ambitious, and it’s also very necessary. We are in a housing crisis extraordinaire to deal with the influx of new Nevadans into our town. How is this initiative, you think, is going to impact the market, and what’s your take on it?
Joe Kramer:
Well, I think, you know, the initiative is fantastic, it’s very aggressive. 100% needs to be done. I wish it the best. I think it’s something that, when we look back, that if she’s able to pull this off, or when she’s able to pull this off, it’ll change the whole vibe of the city and help everyone get some affordable housing, and hopefully maybe change that supply and demand ratio, so it maybe balances out a little bit so everything will kind of neutralize a little bit.
Oliver X:
What she’s doing is for the next four months Reno will delay developers fees on new buildings with 30 or more units. And I’m not sure… I know some of your units are 20 and 10 units. There a little smaller than this, but certainly it must be a great gift to developers who have been… You know, in a project you’re going to encounter so many different things. In certain parts of the town, the water lines are only two and a half feet down, or there’s root damage to foundations. All these things that developers encounter that delay the process and drive fees up for the price of the project. So I think this is going to really impact things like sewer and infrastructure payments that can run up into the five figures.
Joe Kramer:
I think she hit the nail right on the head. The impact fees are something that’s a fee that’s an upfront fee-
Oliver X:
It’s an upfront fee.
Joe Kramer:
-so I don’t care how you slice it. It comes out of your pocket before you buy the land, before you get your building permits, before you get your certificate of occupancy. So, when you look at it, it’s actually a deal breaker. And by her reducing that or limiting that, opens the whole field up where, again, more people are going to come in, they’re going to take a chance. It’s a fair number. We can go in, we can build, and then the impact, it’s on the backend of this. The city’s not getting the upfront fees, but when they allow more building and development, more jobs, more people, more growth, everything will trickle in the backend. And I think it’s really a tremendous idea.
Oliver X:
Yeah, I spoke with Lance Gilman about permitting things and fast-tracking development, and some of the EIR, environmental impact report things and studies that delay big infrastructure projects. So, this type of streamlining is really going to impact us, and let’s get into a little bit about what your research has told you about the incoming labor force and their make-up and needs. What are people needing when they move to Reno?
Chris Foti:
Well, housing, I think.
Oliver X:
Yeah, for sure.
Chris Foti:
And affordable housing. I mean, there’s a lot of people that come here from outside the area that are used to higher rent so it’s not too bad. But for a lot of the locals too, they need more affordable housing. So, everything that you were talking about before, I think, goes into that. So need to keep coming up with ideas like that, and need guys like Joe to keep building and create housing.
Oliver X:
No doubt.
Joe Kramer:
The rate limiting step is very simple. It’s the labor force. All this sounds great, all this is going to work, all the reducing the impact fees, opening the market up, having everything that we talked about. But if we don’t have the labor force to pull this off, it’s going to stop cold, and I think that’s really important, is attracting people to come here. But again, it’s kind of like a snowball effect. The only way to attract them is you got to have the housing. You have to have the housing, then you have to have the employees to come in and do the labor for, so, I think if it all comes together, everything should work out okay.
Jenes Carter:
So I was having a conversation with someone yesterday, one of my gals, and she was actually complaining a little bit and venting to me about how she feels that locals are being punished because other people are moving in and getting good housing, and maybe has something to do also with what you were saying about how they’re used to paying these higher rents.
Oliver X:
They are.
Jenes Carter:
It’s like hey, whatever, forget about it. But then there’s the people that have been living here that are used to how things have been, and they’re like, “We feel like we’re being punished, because we’ve been living here, but we want to live in a nice place too and be able to afford houses.” So they complain, oh, these people are coming from out of town and they’re taking up all our homes. I’m like, oh gosh. I’m sure they could find a home, but how do you guys feel about that? What’s you guys’ take on that?
Joe Kramer:
Well, you know, the local population, obviously they’re here, and as people continue to move in it’s going to change, and there’s nothing we can ever predict besides change. And when these things happen, it’s just going to have to adapt, because I have to adapt every day. You know what? They’re just going to have to adapt, and at this point, that’s just something out of our control. But I always think there’ll be a niche. There’ll always be a place, so you’ll always be able to find something, some decent good affordable housing. But at the end result is if it’s come, it’s come. It’s kind of hard to stop progression.
Jenes Carter:
Yeah, exactly. So are you guys going to be doing anything that might help to make those people feel better? I mean, because I think adapt is the right answer, honestly. It’s like, hey, you got to grow and go with it. If someone increased your taxes, you can’t not pay them.
Joe Kramer:
Exactly.
Jenes Carter:
So, but is there anything that you feel that you guys are-
Chris Foti:
Yeah. So we do a lot of affordable housing as well. We have a new boarding house that’s in the construction phase right now. But when that opens up that’ll be rent from $650, right around there. There’s definitely some more affordable options that we have, and they’re really unique, they’re cool. There’s a lot of nice features in there that you don’t see at normal housing. So that’s kind of our way that we’re trying to get involved with that.
Jenes Carter:
Okay people, so you just got to look.
Oliver X:
Yeah, exactly. Check out Kramer Properties. We’re here with Joe Kramer and Chris Foti of Kramer Properties. Let’s talk a little bit about those… how you choose an area to develop. What are you looking for in an area like, say, in Midtown over at 620 Tahoe Street.
Oliver X:
620 Tahoe Street is right next to my favorite street in Reno, which is Saint Lawrence. Coolest little street, little enclave in Reno in my opinion. It takes you right into the old southwest where it looks like you’re in Vermont. Canopy trees, it looks beautiful. You see the change of seasons, great neighborly vibe, people walking their dogs, white picket fences.
Oliver X:
And just down the street is where you’re at, at 620 Tahoe Street. Let’s talk about that property and how you choose neighborhoods.
Joe Kramer:
Well, it’s a simple question. I have to use the old cliché: location, location, location.
Jenes Carter:
Three times.
Joe Kramer:
How do you go wrong on Virginia street and the beautification that they’re be doing?
Oliver X:
Sure.
Jenes Carter:
I love that you just said that.
Joe Kramer:
The vision and when you see the plans is Virginia Street is going to be like gas lamp district of San Diego. So, my business plan is buying everything and working anywhere around that location of Midtown and Downtown area. I mean, that’s where the vibe and the thrive is coming, I think. Our first project they did there, I threw everything I had into that. It was called the… it was a motel, and I just went ahead and bought it and Kramer 1, Kramer Midtown, put that nice mural on we talked about-
Oliver X:
Oh, yeah. Yeah. Right there. Right next to SÜP.
Joe Kramer:
SÜP, yeah.
Jenes Carter:
Crazy. Just like Casey.
Joe Kramer:
It’s been great. That’s probably been our trademark, our flagship, and beyond that I’m looking at different options. There’s a motel that I recently just purchased in that area, and that’s another business plan of maybe taking a little bit unique approach to the housing problem. Looking at maybe buying and converting some of these motels into some apartments and some affordable living for people. So we’re looking at different ways to help out the community.
Chris Foti:
Absolutely.
Oliver X:
That’s a great idea. I love that.
Jenes Carter:
Nice.
Oliver X:
620 Tahoe Street. The price range, the rent range is between 600 and 750. That is definitely affordable for folks. Let’s talk a little bit about your place at 527 Nevada Street. As I mentioned off air, that was one of my first places that I ever lived, briefly, like a month, when I was back and forth. I just came back from Hawaii and had moved from the Bay Area, was working for Charter Davis Engineering, and we were developing projects downtown. It was great little row house, but you guys have flipped that and made it into something really spectacular. Talk about that property that’s right near Saint Mary’s.
Chris Foti:
Yeah, that was definitely a fun one. That one came together a little over a year ago, same idea and strategy as the Kramer house Midtown. Just kind of took that idea and brought it over to that new house. Went in there and did amazing renovations, it came out really great. The tenants are loving it. We get a lot of attention from the UNR students over there, because it’s within a mile of the university.
Oliver X:
Right.
Oliver X:
That was pretty much a traditional row house. Talk about what attracts you to these type of shared little modules.
Chris Foti:
Well, they’re fun, they’re unique. Yeah, they’re fun. They definitely… there’s a lot of people looking for that type of housing. And it’s just a fun project to work on.
Oliver X:
Killer. We’re talking to Kramer Properties. Joe Kramer and Chris Foti on the Reno Tahoe Tonight Show. What’s next on the horizon as far as what you guys are doing?
Joe Kramer:
Well, you know, just kind of keeping the machine rolling, kind of keeping up with the economic times, which I think are very good. Everything’s moving. The mayor’s doing her thing. Everything’s trying to kind of come together. I briefly touched on it, but looking at some of these motels and working with the city. You mentioned something, working with the city and the permitting and plan check, they’ve been absolutely fantastic with me.
Oliver X:
Very good.
Joe Kramer:
I’ve built a very good reputation down there. They all work with me very well, and I can’t say enough good things about how they’re trying to expedite things, but yet at the same time not just force things through that there’ll be problems later.
Oliver X:
Right.
Jenes Carter:
Yeah. Do it right the first time.
Joe Kramer:
Got to be careful both sides of the fence.
Oliver X:
Prudent growth, yeah?
Joe Kramer:
Yep.
Oliver X:
I love it. Kramer Properties on the Reno Tahoe Tonight Show. Let’s talk a little bit about the finishes in your units.
Jenes Carter:
Yeah, who chooses your finishes?
Oliver X:
Yeah. Who does that?
Jenes Carter:
Who does that?
Joe Kramer:
The best designers. It’s called Spaces. Kim and also Camille. They’ve worked with me for several years. She just pretty tells me what to do and got to go ahead and move forward. She’s fantastic. She’s the heart and soul of what we do and brought a great vibe to our properties. I mean, she puts the whole thing together and as a result of that it kind of gives us the whole finished look from the back of the curb all the way through to the curbside appeal, to the inside that flows all in just one nice vibe.
Jenes Carter:
That’s beautiful. So you guys worry about all the paperwork and everything like that, the presentation, she works that out, and then you guys bam.
Joe Kramer:
I worry about everything. But from the design, she does that.
Jenes Carter:
All right, well she helps to take a little worry off of that.
Joe Kramer:
100%. Oh, yeah.
Jenes Carter:
Okay. That’s good.
Oliver X:
Let’s give some love to your team. I know, Chris, your wife works with you as well.
Chris Foti:
That’s right.
Oliver X:
Very cool.
Jenes Carter:
Hi, wife.
Oliver X:
Let’s talk about your team and what they do, and how instrumental they are in your success.
Joe Kramer:
Well, you know, that’s where the buck stops right there. My team is my family. Some of them I’ve known for about ten years. I mean, from Marcus & Millichap, Ryan Rife’s been my broker who’s worked hand and fist with me all the way through. Willie from Willie Falcon Construction. Great contractor, meet with him every time up here, works with me on a day to day basis, whatever I need. Then we talked about Kim, designers, and then obviously Chris here. I mean, he’s got my back all the time. We talk about 100 times a day. We’ll get into a new office, and he can kind of explain a little bit what he does for me. But the buck stops where the money is, and he’s following all the economics, the financials, the accounting and the marketing.
Chris Foti:
Yeah. We have a great team.
Oliver X:
Guys, if people want to reach out to you and get information about your company, how do they do that?
Chris Foti:
You can find us on www.kramersgroup.com, also can call us at 775-360-3855.
Oliver X:
Awesome. Talk about that open house. Was it delayed? You had a little bit of delay. When is that coming up?
Joe Kramer:
Well, we’re kind of looking at trying to balance of when the house is actually done. It’s actually a boarding house right in front of the 527 Nevada Street, brand new.
Oliver X:
Okay, yeah.
Joe Kramer:
We were kind of do a kind of quasi pre-open when it wasn’t quite finished, and the team got together and decided based on several factors and some construction delays to pull that back. But that’ll be probably first, second week of January. It’s going to be all done. We’re going to do another big, huge mural that’s going to be on it. It’s going to have a great common area, a great vibe through the designers, and the shared living, and it’s going to be a fantastic project that we’re so excited about.
Chris Foti:
Absolutely.
Joe Kramer:
But we’ll keep you updated about that.
Oliver X:
Please do.
Joe Kramer:
We’ll do a promotion for us. We’d like that.
Oliver X:
Thank you so much. Guys, Kramer Properties. Thank you so much for joining us. This is the Reno Tahoe Tonight Show.
