The good part about working for a media title whose audience is its name—Multifamily Executive—is that, from time to time, we get to be unabashed cheerleaders. For, at least some of the time, we give a big thumbs-up to one who seems to “get it” in a way that you wish you could catch in a bottle and spread around for all. That’s part of the need we feel we fill for a housing industry sector that tends to take its lumps, even now, when the needle of fundamental demand seems to be pushing into a red zone of opportunity and expectation. But you’d hardly know that if you talked to a number of players who’re frantically trying to line up capital for deals in a secondary or tertiary market for properties that don’t fit the mold investors are tripping over one another to get a piece of.
As you know, mostly, we’ll challenge you to step it up a bit and be your best because that’s a bigger part of our jobs, to make sure you’re not overly sweet on your own brilliance. We all need challenge, just as we all thrive when that much-deserved vote of confidence comes through.
So, for an issue whose focus is investing in renovations and building long-term hold opportunities around them as a strategic business model, it’s only natural that the story of Albert M. Berriz and his team at McKinley should come on our radar.
When it comes to looking at the occasionally great opportunity that’s often locked up in hairy, complex, problem-laden value-add deals and properties, Berriz’s alchemy is as simple and as intricate as this: He is obsessive when it comes to talking directly with his customer, so much so that thousands upon thousands of them can e-mail him in a flash if they so choose.
It’s through this unfiltered, unvarnished contact with customers that Berriz forms his assumptions about valuations, about pro formas, about when a particular project—once renovated and leased up—may claw its way into break-even and start generating upside. For Berriz, a maestro of “hold school” multifamily investment, the second decade of ownership is perfectly acceptable, as long as it then performs as it should.
Oddly, “boots on the ground,” which is literally the case for Berriz’s officeless regional managers, emerges as a management imperative that works in sharp contrast to other firms’ algorithm-driven revenue management executions.
Berriz doesn’t denigrate organizations that choose revenue management systems; he simply defies anyone to prove to him that a practically countless data bank of direct contacts with customers isn’t the best way to strike the elastic balance between what a unit should price at and what residents will pay, which is the game he’s shown he can win over and over again.
At Multifamily Executive, we, too, have revenue-pegged Web analytics that tell us what topics are tracking and, depending on the velocity of a trend, what amount of Web traffic we should shoot to hit.
We’d be foolish not to embrace the algorithms of our Web performance and lever them to build value around terms and topics that gather interest. We’d also be idiots not to talk to you directly about what you value and how we can deliver more of it.
So, it’s especially gratifying for us that here, the stars align, and you can take part in a fascinating deconstruction of the McKinley business model through the questions of senior editor Les Shaver and the candid, colorful, conviction-filled perspectives of Albert M. Berriz.