ZRS Management, an Orlando, Florida-based third-party property management company, had a strong 2022. The company added over 16,000 units under management last year, marking its largest year-over-year increase on the National Multifamily Housing Council’s Top 50 Managers list.
Since it first made the NMHC list in 2016, ZRS has risen in the rankings each year—from No. 45 that first year to No. 19 this year.
Multifamily Executive caught up with president Darren Pierce to learn more about the company’s latest moves and what’s ahead for the remainder of the year.
MFE: What do you attribute your unit growth to in 2022?
Pierce: Growth has always been a byproduct of our clients having trust in our teams who remain focused on taking care of their communities. Repeat client relationships, word of mouth referrals, and the exceptional on-site team members being requested by name is how we’ve always grown.
2022 was no different. We have never acquired another company to gain market share and don’t have plans to. As an independent third-party manager, retaining communities that trade is also simply a factor of who the purchaser is. In past years, it happened to be more owners/operators who purchased assets. We were fortunate to retain more communities that were purchased by groups that are not vertically integrated.
We also expanded into Nashville, Tennessee, with an existing client who decided to make a change away from their previous operating partner. Expanding into a new market requires a significant amount of upfront investment and commitment from our tenured associates to relocate. We never believe expansion should be done without having established ZRS associates in the market building the teams. Florida and Texas remain our largest markets, but Tennessee, Georgia, North Carolina, and the Mid-Atlantic remain strong markets for us.
MFE: What move did you make in 2022 to become a better a company?
Pierce: We continue to invest heavily in technology that makes the on-site team’s job more efficient. Artificial intelligence (AI) platforms took on a larger role in our business in 2022, and we have had early success with centralizing some services.
Centralization is an important topic for multifamily as increased insurance and real estate taxes continue to put pressure on owner returns. We’re focused on how we can lower controllable expenses without sacrificing the high-level of customer service we must provide to our residents.
We have also stayed true to our strategy of keeping our regional managers’ portfolios small. Having regional managers who are the best in the industry oversee a smaller, local portfolio is a simple strategy, but one that benefits our clients and site teams.
MFE: What trends you are watching in the multifamily industry?
Pierce: The consolidation of operating companies in the multifamily space is a disadvantage for owners. There are very few truly independent property management companies like us remaining. We believe that larger managers with self-owned portfolios will always prioritize their owned communities over third-party-managed deals. Owners need to remain cautious of this and focus on who their local talent will be when selecting their operating partner.
MFE: What are your key strategies for employee retention?
Pierce: The most important strategy for employee retention is to take care of our employees. Every year we have found a way to improve the quality of our health plans, offer more wellness initiatives, and increase our mandatory minimum wage. We have also continued our paid vacation awards for our tenured associates where we sponsor a vacation to anywhere in the United States at their 10-year anniversary and anywhere in the world for their 15-year anniversary. Seeing the pictures and hearing the stories about these trips is always a highlight.
Continuing to do the little things right separates us in the industry, and we remain the employer of choice in our markets. This allows us to attract new talent for our growing portfolio. The longer average tenure of our associates also provides more internal promotion opportunities for our team members. When a new associate joins ZRS, we want them to see themselves staying with us until they are ready to retire. Providing a rewarding career is our promise to our team members.
MFE: How has the year started for ZRS Management, and what’s ahead for the remainder of 2023?
Pierce: Q1 started off very similar to 2022, but we are starting to see some slowdown in rent growth and occupancies. Renters now have more options and flexibility in where they can live and have more patience when making their rental decisions. The accelerated rent growth and occupancies that our industry experienced in the first half of 2022 is normalizing. and focusing on the fundamentals of customer service, curb appeal, make-readies, and expiration management are more important now than ever.
