Supply for multifamily housing is in high demand in nearly every market across the country, which could make it the best time in history to be a developer. However, developers face so many pressures that are forcing business as usual to recalibrate—to think about how to expand to widely diverse markets while maintaining core competencies.
Developers are taking different approaches to make sense of this new and evolving environment—many of them clocking in on the unemployment rate and driving development to tight job markets. In today’s economy, many markets have incredibly low unemployment rates, making themselves targets for new development or value-add.
Kimberly Byrum, managing principal, multifamily advisory at Meyers Research, shares that Phoenix and Las Vegas have 4.3% unemployment rates; Los Angeles has just over 4%; Portland, Ore., and Seattle are both in the high 3% range; San Diego is at 3.3%; and Salt Lake City and San Francisco are both in the high 2% range.
These are exactly the markets that investor and operator TruAmerica Multifamily has targeted. While they all similarly have low unemployment rates, the markets are varied in terms of housing supply, described as emerging markets, cost-burdened, and growth markets, according to Byrum.
We chatted with Bob Hart, CEO of TruAmerica Multifamily, a multifamily investment platform based in Los Angeles, at the Multifamily Executive Conference in October. He shares what he sees as strong strategies for his organization.
TruAmerica’s expansion from California to Florida in just six years is a testament to the company’s great success paying attention to some of the most critical housing themes today—local labor and affordability—and across the diversity of the markets that the company has entered, it is finding ways to stay true to those two core objectives.
Recently rated by Real Estate Forum as The Best of the The Best Bosses in the Business, Hart has built a strong culture at TruAmerica; his unique leadership has created a team that works hard to support his direction and deliver housing that is affordable, comfortable, and sustainable.
In the video, Hart discusses the importance of finding and hiring local talent, but that’s just the start of TruAmerica’s process. Eryn Mack, director of cultural and organizational effectiveness at TruAmerica Multifamily, says it’s a three-pronged approach starting with measurable results that create internal brand ambassadors.
“For example, in 2019 we expanded our team with 11 new hires,” Mack says. “Of the 11 new hires, 10 were internal referrals.”
The second aspect of the company’s approach is flexible opportunities. Mack says TruAmerica captures talent through internships and transitioning military personnel to work with the company, which both lead to additional creativity and global innovation.
“TruAmerica currently employs three prior service military colleagues and eight year-round internships that are broadly focused to support acquisitions, portfolio management, and organizational development,” Mack said.
The third prong is standardization. Mack has created a hiring process that starts before recruiting to create efficiencies, which has reduced TruAmerica’s time to fill positions from a three- or fourth-month process to around six weeks.
“We are also exploring other innovative ways to complement the hiring process by requesting video submission of interview screening questions to relinquish the burden of traditional screening,” Mack adds. “This method enables teams to discuss more than predictive answers, but engage as a team in reviewing answers and assessing candidates.”
All of this process helps TruAmerica focus on another goal—delivering affordable solutions, which are in high demand in all of its markets. The company not only looks at cutting costs and creating efficiencies to offer more affordable product to a broader population but has a science to make it effective.
“Through the years our contractor base grew to over a thousand active vendors,” said Amir Eshkol, executive managing director of capital improvements at TruAmerica. “Our construction managers are deployed in markets nationwide and continuously source additional local and national contractors. By obtaining competitive bids from a large pool of contractors, we are able to obtain the best pricing for our construction improvement scopes of work.”
TruAmerica also has developed a proprietary software to generate contracts that streamline the process with built-in job costs—another way that Hart is able to achieve his goal of delivering quality, affordable rental housing for every family.