At DLP Kutztown, detailed financial analysis and variance tracking surfaced inefficiencies expected to drive meaningful cost savings.
Through a comprehensive review of historical operating performance and current-year actuals—benchmarked against market trends—the asset management team, in collaboration with the property management team, Dream Live Prosper Community (DLPC), identified inefficiencies in utility expenses. Once mitigation strategies are implemented onsite by DLPC, these findings are expected to generate significant savings, underscoring how granular data analysis can uncover opportunities to enhance property-level performance.
These insights were identified through DLP’s disciplined budgeting and forecasting process, which evaluates actual financial results through the most recent month available, combined with projections for the remainder of the year. Forecasts are updated monthly as new actuals are published, and once mid-year financials are finalized, budgets are re-forecasted to reflect realized performance. Quarterly reviews highlight the largest variances, allowing teams to course-correct with precision rather than reaction.
The disciplined approach taken at DLP Kutztown reflects a broader commitment to stewardship and risk management. The budgeting process reduces risk by identifying deferred maintenance items early, allowing teams to plan and execute mitigating repairs before issues escalate. At the same time, it supports improved returns through projected occupancy gains, positive rental rate growth, and refinancing initiatives—including the successful debt refinances completed this past year—designed to reduce the fund’s weighted average cost of capital. Aligning asset management and onsite execution—daily, weekly, monthly, and quarterly—enhances predictability and reinforces operational discipline.
Budgeting at the Asset Level: A Cross-Functional, Months-Long Process
Budgeting is the most important task for the asset manager, as it shows how the strategic plan will be implemented at the property during the following year while accounting for past performance. DLP Kutztown demonstrates how budgeting serves as the first step in driving positive change, serving as the foundation for aligning strategy, execution, and accountability.
For DLP, the budgeting cycle begins with the May property walks, which identify deferred maintenance and anticipated capital improvements for the coming year. The process continues through year-end, sometimes extending into the new year as final adjustments are made following year-end close.
Performance reviews begin with leasing key performance indicators (KPIs), including leads, tours, applications submitted, leases completed, applications denied, and applications cancelled. Ratios between these metrics are analyzed to evaluate marketing effectiveness, sales execution, and market strength. Revenue KPIs include physical and economic occupancy, rental rate growth, concessions as a percentage of effective gross income, and delinquency. Expense performance is benchmarked using expenses per unit per year, compared against both the broader portfolio and market data.
These data-driven reviews are supported by a highly granular budgeting process. For every property—including DLP Kutztown—projections are built for every General Ledger account, for every month. Each assumption incorporates renewal expectations, lease expiration schedules, projected move-ins and move-outs, seasonality, and other operational factors that influence property-level performance. Asset management leads the process, alongside property management (DLPC) and accounting, to benchmark performance against internal properties and the broader market while forecasting interest rate movements and potential refinancing impacts. Property management partners—including DLPC, RREAF, Greystar, and Asset Living—are actively involved throughout the process, collaborating on revenue and expense targets, while accounting ensures consistency with internal policies and procedures.
Investor Impact: Budgets Guide Growth—Execution Delivers Results
Collaborative performance reviews conducted daily, weekly, monthly, and quarterly enable DLP teams to compare KPI ratios and financial results against budget, strengthening predictability across the portfolio. Currently, budgets forecast continued increases in occupancy and positive rental rate growth as current supply is absorbed, supporting projected Net Operating Income (NOI) growth in 2026. While budgeting alone does not improve NOI, successful execution of the strategies outlined in the budgets is what ultimately drives results. All teams play a critical role in executing these plans and building a thriving resident experience.
DLP Kutzdown is only one example of how data-driven insight, disciplined budgeting, and consistent collaboration across DLP teams exemplify stewardship in action. Together, these practices create a framework for effective execution and long-term portfolio performance—ensuring DLP Capital honors the trust placed in it by investors.