Acceptance of American Express Card Gives Properties the Edge in Hot Rental Market; New Independent Research Finds Credit Card Rewards Significantly Impact Rental Decisions

Business Wire, June 14, 2005

NEW YORK -- American Express today announced the results of an independent research study regarding consumers' attitudes towards automatic rent payments on credit and charge cards. The research indicates that just as Americans have embraced the cashless society, America's renters are equally eager for a checkless society as well.

Given the strength of its preeminent Membership Rewards program, American Express has worked with property managers to create the newest category of apartment rental amenity - the ability to automatically pay monthly rent on the American Express Card and earn valuable rewards. A new survey conducted by SatisFacts Research, a leading multifamily research firm, found that this particular amenity, the ability to earn miles or points by paying rent on a credit card, has a significant impact on resident retention, future leasing behavior and resident satisfaction.

The research focused on residents who do not currently participate in an automatic monthly rent payments program. In a ranking of various amenities offered at many luxury rental properties, the ability to pay on a card that offers rewards ranked second among all amenities, behind only recreational facilities and above concierge services or clubhouse and social activities. Almost one-third of respondents said that if choosing between two apartments, they would be extremely or very likely to rent one that offered automatic monthly rent payments on a card.

"We've known for some time that our Cardmembers have absolutely embraced automatic rent payments in the properties where we have introduced it," said Elizabeth Langwith, vice president, Emerging Industries, American Express. "This new research shows that choice in payment methods is increasingly going to be at the heart of a renter's decision to sign and to renew."

In the survey, 21% of respondents identified themselves as American Express Cardmembers. For this subset, average rents were 11% higher and household incomes were 46% higher than the overall survey group. These factors are obviously very attractive to property managers and of particular significance considering that 27% of American Express Cardmembers stated that an automatic rent program would have a major impact on their decision to renew a lease compared with 17% for residents without the Card. An astonishing 40% of Cardmembers in the survey stated that if choosing between two apartments, they would be extremely or very likely to rent one that offered an automatic credit card payment program compared to 29% for residents without the Card.

"Amenities are a key factor in a renter's decision to live in a Westdale property," said Ken Carlson, Chief Financial Officer of Westdale Properties. "For American Express Cardmembers, the ability to automatically charge rent and earn rewards is incredibly appealing. We're delighted to offer such a convenient option that insures on-time payment and customer satisfaction."

Automatic credit card payments clearly have a positive impact on renters' behavior. However, the introduction of a monthly convenience or service fee significantly impacts adoption rates. Adoption rates of those extremely or very likely to use such a program dropped by nearly two-thirds (61%) when a convenience fee was introduced.

"The uniqueness and value of this amenity is founded on Cardmembers' ability to earn rewards simply by paying their monthly rent," added Langwith. "American Express has chosen to prohibit convenience fees because they are not compatible with the goal of maximizing resident loyalty, retention, and acquisition through a convenient and more rewarding way to pay rent."

About American Express

Beginning in 2002, American Express developed a unique program to help multifamily property owners and managers differentiate and market their properties while enhancing resident loyalty, retention and acquisition by providing rewards to residents paying rent automatically on the American Express Card. American Express is a leader in this area with a dedicated multifamily industry team working with owners and managers representing approximately 100,000 units in more than 400 communities across the country.

Establishment Services is the merchant network of American Express which acquires and maintains millions of merchants around the globe and across industries who welcome the American Express Card. American Express Company is a diversified worldwide travel, financial and network services company founded in 1850. It is a world leader in charge and credit cards, Travelers Cheque, travel, financial planning, business services, insurance and international banking. For more information about American Express, visit www.americanexpress.com.

Methodology

In April 2005, SatisFacts Research surveyed 951 residents across 71 properties in 16 states by telephone. Properties were chosen at random from a sample pool of 160 Class A&B properties.