At the start of the current industry cycle (2009/2010), we began to see a meaningful consolidation of management platforms. It started with Riverstone Residential acquiring several regional operators, and later became an industry game changer with the 2014 merger of Riverstone and Greystar.
From the vantage point of the big national operators and supporters of the consolidation efforts, the marriage of Greystar and Riverstone was a defining moment. It would certainly make sense under the premise that size, scale and the implementation of new technologies would lower overall cost, increase efficiencies and create a “win-win” for all parties involved (operators/property owners /etc.).
As an experienced and tenured regional owner/operator, we watched these massive market changes and began to wonder where all of this was going. What would be the result of this seismic shift? How would the competitive landscape change? Would regional operators be swallowed up as rapid consolidation continued?
While we don’t have the hard and fast data on hand, it certainly feels as though there are fewer operators then there were five, 10 and even 20 years ago. This landmark deal solidified the industry’s trajectory as Greystar pulled ahead of the pack to quickly become the world’s largest multifamily real estate services company.
While we were confident that the same ingredients that ensured our past success would allow us to prosper in the future, the outcome of the consolidation was uncertain. Now that we are several years down the road, the irony is that this particular “disruption” has proven to be beneficial and even provided a competitive advantage for our company, as well as numerous other regional operators.
For example, a common theme we hear among many owners is that, while they recognize the advantages in size and scale of the large operators, and certainly appreciate some of the benefits, they fear “getting lost in the sea of client relationships” and often crave a higher level of customer service and one-on-one support. Being a valued customer who maintains a directly line of communication with company decision makers becomes even more difficult in the creep toward the commoditization of the business.
Additionally, there’s some failure to recognize that our business is about people. Yes, we do now live and work in an era where enhanced communication, technology, telecommuting and advanced dashboard monitoring can greatly assist a national and regional operator. However, at the end of the day, regardless of size, scale and technological offerings, the associates, from the site level to the executive team, are on the front lines of client and customer service and communication. We are still in the “business of people” and proactive, progressive and proper execution is no longer a “nicety” in property management, it’s a “must-have.” Technology and data-driven reporting have made monitoring performance and trends much easier, but it too is not a one size fits all solution to ensure (a) your associates are happy and motivated (b) your on-site staff is creating a true sense of community at the local level and (c.) that your company’s curb appeal remains sharp and ahead of the game. We have yet to see a dashboard that can accomplish this.
Regional operators can differentiate themselves by offering a client or partner the “best of both worlds”—an organization that has most all of the offerings of the large national operators (back office, technology, marketing, etc.) while providing a personalized level of service and partnership, local market knowledge, executive level access, input to your business plan and nimble execution.
The key for our company and many other regionals is to determine how to grow and scale while maintaining the level of service and results that make our companies unique. For a company such as ours, there is no point to grow for simply the “sake of growing,” especially if we cannot execute and perform at the high levels we have in the past. Finding this ideal balance is a constant discussion within our organization. We feel strongly that there will always be great demand for the services of regional operators as long as they continue to execute and differentiate themselves through a more personal touch.
As many of us know, property management is an extremely difficult business, one that involves thousands of small steps and processes that are executed by real people. At Fogelman, we pride ourselves on those people, the ones that have made us the “Best Places to Work in Multifamily” for several consecutive years, the ones who have the deep local market knowledge, and the ones who help us utilize our experience as an owner to be a great steward for our client-partners.
We’re not perfect, but we remain intensely focused on high-touch execution as this is our true “differentiator” in today’s marketplace.
Mark Fogelman, president of Fogelman Properties, oversees strategy and implementation relating to all aspects of the Fogelman’s property management division, corporate infrastructure, and growth initiatives while bringing the critical property management perspective to the investment activities of Fogelman and its clients.
Fogelman Properties is one of the country’s largest and most experienced privately-owned multifamily investment and property management companies. As a fully integrated company, Fogelman specializes in multifamily acquisitions, property management, construction management, and asset management.