AFTER I GRADUATED from college, I worked as a stringer for a celebrity gossip magazine. A year into the job, I decided I'd had enough of the debauchery—I didn't care what former child star was addicted to meth or which celebrity couple of the hour was rumored to be parting ways. It was time to reinvent myself and my life. My plan? Chop off all my hair and go to grad school. OK, that sounds like a bad episode of The Real World and not at all “transformative,” but the process of uprooting myself from Los Angeles and moving halfway across the country to Chicago did help me put my priorities into perspective.
That was a long time ago. But I will say, there's something familiar about reinvention. That's probably why I find myself coming back to the idea again and again, both personally and professionally. Turns out I'm not alone. It seems that many companies, particularly those that are facing a striking change in the direction of their business—or witnessing an economic climate shift like the one the country has seen in recent years—also like to turn to the idea of reinvention.
Consider Behringer Harvard.Two years ago, the Addison, Texas– based firm landed on the scene armed with Dutch pension money to buy up assets left and right. Now, with the dust settling in the aftermath of its buying spree, the management team has decided to shift gears, launching an internal property management and operations division this past fall—an income-generating arm, if you will.
Perhaps this was Behringer Harvard's strategy all along (there were those rumors about planning for a potential IPO, after all), but whatever the reason, it was a departure into foreign territory.
And we've seen that happen again and again, both during the Great Recession and in the fragile months of the recovery that has followed. Chicago-based Equity Residential is determining its next move after spending 2010 as the No. 1 buyer of apartment assets— should the REIT continue to snap up high-barrier properties or should it shift gears to secondary markets? Meanwhile, Security Properties, like Behringer Harvard, launched a property management arm. Wood Partners deployed a $400 million development fund in late 2010 after swearing off new construction. Longtime apartment development titan Trammell Crow Residential ceased building multifamily projects altogether and is now strictly an asset manager. And Hunt Cos. announced a strategic alliance across its asset and property management divisions with LEDIC Management Group.
Indeed, the list of possible strategies when you're trying to reinvent is endless. Form a strategic alliance. Raise a fund. Try an IPO.
And every single one of these— along with others—has been considered or implemented this past year. The big question that remains: How will all of this transformation actually turn out? I don't know, but I do believe it's worth the risk.
We at Apartment Finance Today jumped on the “risk big, win big” bandwagon as well. A few months ago, our team decided that the magazine was in need of some new energy—a transformation in the form of a redesign. So we applied the formula first put forth by Edgar Degas, who said transformation is when “imagination collaborates with memory."
It's an interesting formula: Imagination + memory = transformation.
And very true. To shape our vision for the magazine's redesign, for example, we kept all of our favorite departments and sections from the previous incarnation and infused them with energy and an easy-on-the-eyes design aesthetic.
Speaking of which, let me be the first to roll out the red carpet and welcome you to the new Apartment Finance Today. Sure, it's no pixie haircut and cross-country move, but we like our transformation.
And we hope you do too.