Steven DeFrancis: Sure, well first thank you for having me, glad to be here. Cortland is the largest owner operator in Atlanta and Dallas as well as all of the State of Texas. Historically in our business, groups would generally try to outsource as much of the business as possible. As it relates to other types of housing, we have looked at whether student housing or senior housing. 10 free leads on us . Most of all, we got great consistency so when we were promising delivery dates on these units, we had much lower volatility than what we had seen previously, doing a more traditional model. If you look at Atlanta, you mentioned we're number one owner, number one owner in Dallas, in both of those markets were the number one owner and were mere basis points of the total. Cortland Locations. When we were starved for capital and so making investments in real estate made a lot of sense. The training that you've given them is sort of applicable across the Cortland platform. As a matter of policy, BBB does not endorse any product, service or business. One of the things we knew early on, if we were going to be best in class at creating a living experience and customer delight, what we had to do first was make this a best place to work. At least we were all one team. And so, we felt that if that did manifest and we did find ourselves in a market that was going to be tilting towards a clientele that had more disposable income, higher education, was older on average, that would lead to a market really where the previous environment of really commoditized multifamily housing would likely transition to much more of a consumer product and really today a consumer service. Because all of us can sit there and say airlines want to make the flying experience better but guess what they have a really tough time making the economics work to make the flying experience for all of us that much better, and so they don't make it materially better. We are probably a 50 some odd people on the investment team, and they are spread out across the markets where we are operating in the US. As it relates to the first part of your question, the fit and finish side and for our customers. And so, we researched really all things related to multifamily whether it was you know supply and demand in the markets that we were in at the time, the demographics market wise and nationally as it related to propensity to rent? Then the second piece is once they get in you've created a culture at Cortland that is very unique. That to me, Steven, is sort of where the genius happened, and I just want to understand during that period of time what was it that you were seeing, what was the conviction that you had to invest in those two different areas? And like a lot of things that worked great until it didn't. It's about starting with a process through testing, we use an industrial psychologist to do all this work. Steven DeFrancis: I will never say Id rather leave here to go there, but I do miss the closeness. Steven DeFrancis: Well, we had a lot of learnings along the way. We sort of felt like we had to assume the market would recover, because if that didn't happen, we had a much bigger problem. You've also standardized a lot as it relates to the if you will fit and finish of a Cortland property. So, lot of room to grow in the business that we're doing. The vision also prompted a focus on brand. Because it gives us less volatility on the outcome of the return. Once we brought that in-house, we then realized that we could do a better job on the material side and so Darla partnered with Clay Landers who runs our construction group and they started working with an importer, to again, we were not going directly to Asia to source materials were working with an importer to cut out some of the middlemen on this side. The other piece is just in SEO and online through branding as I mentioned earlier. Willy Walker: You talk about the people at Cortland, and Im privileged to know a lot of them, and Ive been to Mercedes Benz field to watch your team compete in a karaoke band competition, and that was actually quite something to watch. Cortland has processes in place to provide a high level of standardization across its business; this allows, for instance, residents to count on a certain standard of fit and finish across properties, and property managers to easily transfer between locations. It doesn't mean the right personality profile to work here or not work here, more typically it's the person that's going to be an interior design probably has a different set of personality profile than the person who's going to be an accountant in reporting. Copyright 2017-2020 Walker & Dunlop, Inc. BBB Business Profiles are subject to change at any time. Because of the challenge of getting really good design talent on a third-party basis early in the cycle and again that's because early in the cycle we were buying and renovating assets that were all foreclosures and many of those assets we paid sub $15,000 a unit. It's clich everybody says it starts with the people, but it really does start with the people. We're here to help our residents, clients, and communities across the globe. In order to accomplish this goal, Cortland began to vertically integrate. 22:17 - Steven comments on Cortlands approach to brand and recruitment. . The Business Office Manager oversees the Accounting and Human Resources functions as well as handles recruitment, retention, new hire orientation, benefits administration, payroll, and general. Additionally the **** system outside her window (was not disclosed to her the **** noise at time move in) disrupts sleep. Willy Walker: So, I remember walking into your offices, I want to say it was probably around 2015 maybe 2016 and there was a projection up on the wall in the analyst bullpen that had ships literally on the Pacific Ocean where you could track the ships that were bringing across them materials that were going to go into Cortland buildings that you were rehabbing. This was not the same type of profile we are working on today and, as you can imagine if you were an interior design professional getting the Cortland project to renovate a property that they had just paid $10,000 a unit to buy and we're going to spend $15,000 a year it wasn't the high glamour project. We then were able to start investing in those folks, training them better, creating better career pathways so they didn't feel like they were just going to be the service manager of location 22 forever which then creates more energy, as you can imagine, within that group. Need to find a different location? Over the last three years we've closed on 4% of the assets we've underwritten but, at the end of the day, if we take the learnings we're having through in our existing portfolio in each of these markets and the learnings we get from the 96% of the assets that we lose on, but we underwrote and got all the data from, and then maintain all of that in a dynamic database. Steven and his team manage a portfolio of multifamily assets located in 11 states, primarily in the Southeast, Midwest, and Texas. Our Company Our Company Our Story . You just raised your fifth closed end fund. Cortland Corporate Headquarters and Office Locations. Willy Walker: And anything on the downside, as it relates to anything from the small company touch and feel that you miss or anything that sort of says man, I wish I could go back to doing that, but my job today just didn't, allow me to do it? Today it's just a different type of fun because you can do more and do it better, because each thing is systemized so much better. While discussions, like the one I had last week with Matt Kelly of JBG Smith and with Steven today are primarily focused on the commercial real estate industry; the discussion with Kerr on culture and leadership is applicable across industries and contain lots of life lessons. They thought it was nuts to spend that much money on a renovation of an existing project. What's your view on the overall market right now as it relates to sort of supply and demand and where pricing is and the ability to continue to get the returns that Cortland has been so successful at producing? 10:19 - What about the companys change led to insourcing? Please select one of the markets below to refine your search. Founded in 2005 and headquartered in Atlanta, Georgia, Cortland Partners is a global, multifamily real estate investment firm. And part of being able to focus on that was stripping costs out and being vertically integrated. Neither one had ever been there, had no idea what they're getting into but we're going to go figure this out. staff definitely needs a to be looked at thoroughly. By progressively cutting out middlemen, standardization became easier and costs lower. We felt that was important because we did a lot of research before we did this and learned that our brand actually stood for high degree of service, customer living experience, a lot earlier in the cycle than we had anticipated. Headquartered in Atlanta,we own and manage apartment communities across the US with regional offices in Charlotte, Dallas, Denver, Greenwich, Houston, and Orlando. But to your point about all the stuff we've underwritten, what we decided a number of years ago was to invest in a bigger team so we could put an investment team in each of the markets that we're in, so we weren't trying to do all this acquisition from a central location where we really didn't have the local market knowledge that we would like to have. What is it other than to be honest your fantastic leadership that's allowed for the Cortland culture to build to be what it is? I think if we're really going to outperform in the new environment of multifamily going forward, that's the part where you got to be best. So, instead of calling in the more traditional model where if you're looking for an apartment in Denver and you call one of our locations in Denver, if they can't help you, which is fairly likely, because all the properties sit at 95% occupied. About Us. We think you will be pleased with the variety of quality rental property selections offered here, including student housing, studio apartments, 1BR, 2BR, 3BR, 4BR and single family housing. 3.7 (114 reviews) Verified Listing. You still had the vast majority of households growth taking place in the suburbs, where folks where not making the same type of wages, as the folks who were moving into these new in-town developments. Cons. Houston, Texas Office. BBB reports on known marketplace practices. We believe that fostering sharing and inclusion of all ideas, lived experiences, and world views in the residential community can provide transformative learning experiences for our . The market today is as white hot as we've ever seen it Steven you know that very well. We talked a lot about how we're going to make mistakes and that's okay, just try not to make them more than two or three times each. You can then attract higher quality folks. So, it's really two pieces; it's maintaining that ability to be the best to your customer, but also the ability to create the infrastructure to process a lot of throughput, and whether it's development or acquisitions or value add renovations, the whole process of creating product before you then manage and operate the product. We knew the first thing we needed to do was go build a team of really top-notch players that were passionate about working here, passionate about what we were doing here, felt like they were invested in and really enjoyed working together as a team every day. So, part of it is the intellect testing, that's more of the straightforward part, and part of it is the personality and making sure that we're getting folks with the right personality to meet the job that they're going to do. We spent about six months with four market study groups just studying different parts of the business. Then all the investment you put into that lead, your associate is like well, thank you very much for your interest, but we cant help you and call us next year when you need an apartment again. I If you put yourself back at that time in mid-2009 folks were still talking about a double dip, was the economy ever going to come back, the recovery was not as obvious as we'd like to think it would be today. There's huge value in that and this is just one example where that scale just creates a ton of value. He has looked at other product types within housing, and his main aim in each market is to achieve the desired asset base and scale. This is an overview of the Cortland Dallas campus or office location. So much of it is about putting people in the right seat on the bus. Five years ago, I knew every single person who worked here and could walk up and have a conversation and whatnot and knew them. So, clay and a wonderful gentleman on his team named Walter Hudson got on a plane and flew to China to find our missing cabinets and counters at the time. 270 S Watters Rd. But to your point about how we're going to grow, Im a big believer in taking a step back. All these different things that you have to line up when you have no control over your capital. Say yes to a career you love. Cortland Apartments. By controlling that process, you now could control the quality of the product, and the difference in a really high-quality fixture versus the lowest builder grade stuff we were used to seeing it was literally single percent cost difference because you spent so much of the landed cost in the US went to logistics and shipping the amount of cost that went into the actual product is really pretty small. As you know, Willy, we started a brand for 55 plus which we call the Tiva a number of years ago. The company employs more than 2,000 associates and owns and manages over 65,000 units today with a current acquisition pipeline that will push that number over 70,000 by the end of the year. I continue to receive emails and texts about my discussion with James Kerr author of Legacy from two weeks ago. They want to work for a brand that really means something and stands for something premium in the marketplace, and it also really pays huge dividends on the marketing side. It's less about buying them or renovating them, building them from that standpoint is really on the operation side. Argentina. In general, I always feel appreciated, I always feel I can speak my mind, and I always feel like I am growing. There are one million things a day that can go wrong and generally, most of them will. By 2011, we owned and managed 5,000 apartment homes and meaningfully accelerated our plans to build a company that could deliver unique value to both our residents and partners. Tue: 9am - 5pm. Before I introduce Steven and dive into our discussion, I want to thank Mike Altman, David Dixon, Brad Brown, Ned Stiker and the other members of the Cortland team for all they have done to make Cortland the amazing company and partner it is. Visit Website. Need to file a complaint? But I would argue that almost everybody has pride in where they live, and really wants to live in a nice place. But the reality was they were going to demand a lot more from a level of service and experience that we had been used to providing in the multifamily industry. Because it just takes so many people to do it well. I personally would not live there. So, what we began to do is say okay let's take those learnings and really pivot the platform to focus on this new environment where the client or our customer needs to be at the center of everything we do. 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