Home Properties prides itself on its "family feel." This public real estate investment trust (REIT), formed by Nelson and Norman Leenhouts in 1967, is run more like a traditional family business than a corporation.
The company specializes in acquiring and repositioning older properties, typically from smaller family-run businesses that are looking to get out of the multifamily industry, says Nelson Leenhouts, co-CEO in charge of operations. The average property age of the company's portfolio is 30 years.
It upgrades and enhances older properties to at least class B quality, says Norman Leenhouts, co-CEO in charge of investor relations. "Most of our competitors deal with [properties] 10 years or less in age. When their properties are 10 years old, they get nervous about keeping them."
But not Home Properties; it has carved out a niche for itself. Seventy percent or more of the U.S. housing stock is more than 10 years old, says Norman Leenhouts. "We are the only public company focused on improving the country's housing stock over 10 years of age and using private sector funds as opposed to federal, municipal or state funds," he says. And, the Rochester, N.Y.-based REIT likes the fact that its game plan is distinct from other multifamily REITs.
Home Grown Home Properties is not typical of public companies which have Wall Street constantly demanding returns and looking toward the CEO to lead the company, and Home Properties prides itself on being different. It has a bottom-up approach to management.
"People like coming to work," says Jodi Falk, Nelson Leenhouts' stepdaughter and senior vice president of information systems. "We have a very open environment and we let the best decision-maker make the decision."
Home Properties boasts about the amount of training it offers its employees. Every other week, different on-site staff attend their annual week-long training programs at the corporate office. Alternate weeks have leasing and leadership training sessions for superintendents, community managers and multi-site managers. "We emphasize training, and give [employees] a tremendous amount of decision-making power," says Nelson Leenhouts. "We have them involved in the preparation of the annual business plan. We treat the community managers like they are the president, [allowing them to make decisions]." This approach works because on-site managers have direct contact with the property and know what is needed to be productive. They make daily decisions, such as purchasing supplies, without having to check with the corporate office first.
It's what the company calls "servant leadership," says Josh E. Fidler, general partner of Boulder Ventures Ltd., an investor in Home Properties. "That is a great phrase; it sums up a lot of their outlook. The senior management is the servant to the on-site staff and to its shareholders."
Servant leadership is the cornerstone of the company's culture, says Norman Leenhouts. "We consider the people who deal with our customers the most important part [of the company]; the rest of us are here to serve them so they can do their job and give our customers the best service possible."
As a result of this philosophy, Nelson Leenhouts believes that the company has the best trained and motivated on-site people of any real estate company.
"[But,] the best indicator of [Home Properties'] success is that [it has] made it comfortable for old-time property owners – who built up significant local portfolios – to become involved with a large public company," says Fidler. "The company has a very understandable game plan and a traditional approach, plus [it pushes] authority and responsibility down to local management."