Photographer: Mark Stevens Laurie Lyons
Laurie Lyons made her name in the apartment business by building BH Management from 300 units to 47,000 units in more than 17 years. But, after having a child, the weekly commute from Denver to Dallas was just too much of a grind. So, in 2005, she stepped away and thought she was done with multifamily for good.

“I retired and thought I would never embrace another company or get back into the industry again,” she says.

Then she was introduced to four young entrepreneurs who had started a multifamily company called Cardinal Group. In their first decade out of college, they had built the now Denver-based company to almost 5,000 student housing beds.

“They had focused on student housing and started buying properties 10 years ago mainly because they had just come out of living in the student sector,” Lyons says. “They started the management company to operate properties because they had a hard time finding a management partner who could execute to their level of expectation.”

Wanting to expand, the leaders of Cardinal Group starting meeting with Lyons for monthly lunches. “I started mentoring them in a lot of ways,” Lyons says. “That turned into more than once-a-month lunch meetings.”

Eventually, the principals at Cardinal asked Lyons to join their team, even though she never really wanted to work for anyone again. But she found their innovative approach and desire to reinvent the industry intoxicating. So she joined them.

With her return to the business at Cardinal, Lyons had the opportunity to finish some unfinished business.  

“I’m still proud of BH and what we accomplished, it’s a wonderful company that continues to perform at a very high level,” she says. “But the Cardinal approach is so new and refreshing. I truly feel we are building the model for property management companies of the future.”

Cell Service 

One of the common threads that joined Lyons with the Cardinal group was their joint belief in implementing a new path for advancement for property managers. Over the years at BH, she had grown frustrated watching talented leasing agents move up into regional positions literally within months and, in many cases, struggling in the new roles. 

Worst of all, leasing took a hit.

“Though there are always exceptions, that’s [often] not the right skillset [to be a regional manager],” Lyons says. “And, you lose great dynamic leasing people. Your leasing goes down.”

So, at Cardinal, the team set about providing compensation and career advancement pathways for property managers, while trusting the portfolio management function to people with a different skillset.

“Through a four-person cellular model, we operate properties from Denver,” Lyons says. “Within the cell, we have operation specialists who oversee leasing and marketing efforts of a dedicated portfolio of communities. This creates a position where talented leasing agents can move up to the next rank and make more money, but they stay in the silo of what their real skill set is.”

Inside each eight-to-10 community portfolio, Cardinal has a dedicated operating cell, which includes a staff accountant, operations specialist, assistant portfolio manager, and portfolio manager. 

“Those four people are dedicated to that portfolio and they work exclusively with their on-site property managers and their teams,” Lyons says. “One of the most intriguing parts of this structure is we can build dedicated operating cells for each client.”

Cardinal requires its portfolio managers to reside within its Denver headquarters in order to build relationships with the team members. This requirement is so important to the organization that it moved to the middle of the country from San Francisco. That meant portfolio managers could travel shorter distances to reach each coast.  

“Our portfolio managers have advanced degrees and they think strategically about assets and business decisions,” Lyons says. “They understand the business plan and objectives and are there to advise clients as a business partner, not a property manager.  They are more like asset managers.”

Portfolio managers are required to put boots on the ground at their assets once a quarter. Cardinal feels time is better spent in the office, rather than travelling each week, plus they can leverage modern-day video technology to meet “face-to-face” and get real-time tours of the assets. 

“We dedicated resources based on capacity, as opposed to overloading a team based solely on covering a geographical region," she says. “They have a lot more to gain being where the support is.”

There are other benefits too, at the corporate headquarters, Cardinal is doing things like studying consumer behavior and analyzing important metrics such as where leads come from, and when people sign leases. For instance, the company found that in the student housing sector their highest leasing activity is taking place between 11 P.M. and 3 A.M. 

“The student housing sector and the new renters don’t have printers,” Lyons says. “No one uses paper. They want to go onto their computer or phone and fill out the app and hit send.” 

Cardinal’s been doing this for four years, whereas some of their competitors are just now rolling out online leasing capabilities. 

Solid Results

Though Lyons had been out of day-to-day operations for a while, she hit the ground running on her return with Cardinal. She pulled out her “black book,” picked up the phone, and called owners she knew in the apartment industry. Her proposition was simple: she asked for their worst property and promised improvements. 

Slowly, she has picked up additional business from these clients. “We did a good job and we got two more, five more, seven more,” Lyons says.

With this kind of aggressive approach, Cardinal has more than doubled its portfolio in the past year. In early 2014, it controlled 4,800 student beds and 1,400 apartments, owning 75% of those properties. Now, the company has 10,000 beds and 3,000 apartment units and its owned-managed ratio has flipped. In fact, Cardinal, which is willing to take incentive-based work, is gaining so much work and positive momentum, it’s thinking of doing something almost unheard of in management today.

“We’re planning on raising fees instead of reducing them,” Lyons says. 

Ultimately, Cardinal Group wants to build a platform that could support 50,000, 60,000, or even 100,000 units with a select number of partners, but sheer size isn’t the goal.

“The goal is not to be the biggest in the industry, rather we want to be the best in the industry,” she says. “At the end of the day, we think we can make money for our clients and ourselves.”