When Nelson Leenhouts appeard on the August 2001 cover of MULTI-FAMILY EXECUTIVE, he and his twin brother Nelson were just a few months into a planned transition that would lead to their departure from the company they'd founded in 1967.
Only six months earlier, Home Properties had hired Edward J. Pettinella, a banking industry executive who had been tapped to replace the brothers in January 2004, when Nelson and Norman planned to step down. But before that happened, the Leenhouts twins needed to teach Pettinella the intricacies of running the $300 million multifamily REIT. While the new hire did have some real estate experience amidst his finance-heavy resume, Pettinella—the former division president for Charter One Bank—was a multifamily novice.
“Nelson walked me through the basic Property Management 101 right on up through what I needed to know,” Pettinella remembers. “I sat in on many of the budget meetings and the capital expenditures that were made. I saw what we spent money, how we spent it, and how we made decisions.”
He also went to school on the Home approach to apartment acquisitions. “I learned how we looked at a deal, how we analyzed the pertinent issues, and how we negotiated deals,” Pettinella says. “Then we went out into the field and looked at prospective candidates that we may want to buy. Norman would tell me the litany of reasons why he liked one. He then would look at another one and tell me why he didn't like it. After four years, I think I got it.”
On Jan. 1, 2004, Pettinella took over as Home Properties CEO, leaving Nelson and Norman as co-chairs of Home's board. “The biggest difference is that, instead of daily responsibilities, I can now spend most of my time doing work that I want to do—mostly research involving reading and Internet [surfing] involving strategy, corporate governance, and market analysis,” he says.
Nelson spends about half of his time in Florida, where he stays close to Home through a high-speed Internet connection and a phone extension that transfers his calls from Rochester. Among his responsibilities: two apartment construction projects at properties adjacent to Home communities. (The Leenhouts run Home Leasing Corp., which was sold by Home Properties after Pettinella became CEO. The firm specializes in building apartments, commercial buildings, and single-family homes in the Rochester area.)
Norman has remained connected as well. He still signs off on acquisitions and dispositions, handles communication with the board, and is involved with buying and selling strategy. “We tried to structure their relationship with the company so that technically they are still part-time employees of the company today,” says Cliff Smith, who sits on Home's board and is a professor of finance at the University of Rochester's business school. “They have the kind of insight and wisdom that you don't accumulate overnight.”
Employees agree. “It's great that I still have Nelson as a resource,” says Scott Doyle, Home's senior vice president of property management. “He's still available by person or by phone if I still have a question or want to bounce something off him.”
Still, it's not quite the same as running the show. “Leaving and not having everyone work for you is hard,” Nelson says. “I'm not the priority anymore. But that [feeling] diminishes a bit every day.”