Credit: Dero Sanford
With a gift for finance and an eye for potential, Trinco’s Joel Sanders is proving there’s yield to be had in secondary and tertiary markets.
Following his sophomore year in business school at the University of Arkansas, Joel Sanders decided he would use the summer months to get his real estate license—just to test the waters and see if it could be a career path that was right for him. He didn’t waste much time in showing people that it was, because over the course of the next year, while still a full-time student, Sanders managed to broker the sale of $7 million worth of property. That was enough to make him a CCIM (Certified Commercial Investment Member) and enough to convince him that real estate might be a good fit for his financial skills after all.
Following graduation, Sanders spent the next two years at a local brokerage firm until he started getting the entrepreneurial itch. That’s when, in 2009, he founded Fayetteville, Ark.–based Trinco Real Estate Management & Capital. As the firm’s president and CEO, Sanders leads Trinco’s NOI-focused strategy at its five multifamily properties near the University of Arkansas, two of which are student housing projects. Thanks to its proximity to the campus, Trinco has become one of the largest student housing owners in that market.
But student housing isn’t the only piece of Sanders’ pie. His bread and butter, in fact, is hunting down and increasing value in assets in the secondary and tertiary markets, specifically with Class B properties in Class A locations. Initially, Trinco’s portfolio consisted of 3,000 units spread across classes. But Sanders eventually decided to take a lean-and-mean approach, slimming down to 1,000 units. So far, he’s seen a number of metrics improve as a result of this strategy, including NOI, occupancy, and rent rates.
“We wanted to take one step back in order to take two steps forward,” says Sanders with confidence. Currently, he’s in the process of lining up new investments for 2012 and beyond. This year, Trinco is looking to expand into the Mid-South and Southeast regions, after previously having concentrated chiefly in the West South Central region.
“We’re focused on growing our footprint through acquisitions by working with private-capital partners in tertiary and secondary markets.”
Driving expenses down and bringing revenues up is the name of the game according to Sanders, who preaches the philosophy as the company’s mission statement. And he credits an array of business intelligence tools that he has successfully implemented with making it possible for him to do just that. “We really feel that the business intelligence tools that we use to assist with driving the financial performance of our properties help keep us from committing the sin of ‘amputation before diagnosis’ with regard to not only our day-to-day decisions, but long-term strategic planning, as well,” Sanders says. He points to real-time access to revenue streams, a cloud-computing initiative, and video conferencing with his property managers as especially helpful.
But perhaps more than anything, Sanders believes it’s the attitude he’s cultivated within his company that’s made the greatest difference in increasing NOI. You see, Sanders makes sure everyone, from the property manager to the grounds keeper, at each of the properties Trinco manages has a thorough understanding of what NOI is and how such simple changes as an “NOI Awards” incentive program for the staff members who best reduce property expenses can have a meaningful effect.
“The bottom line is, we want to be able to write the biggest checks to our investors,” says Sanders.