David Deitz, co-founder and president of Birchstone Residential, Ashcroft Capital’s in-house property management company and construction affiliate, is a big believer in using a strengths-based culture to build a company. Multifamily Executive recently got a chance to talk with Deitz about the benefits and impact of such a culture. We also gauged his thoughts on the status of the apartment market.
MFE: Explain, in a nutshell, what a strengths-based culture is.
Deitz: Broadly speaking, a strengths-based approach is one in which an organization identifies and focuses on an associate’s strengths and aims to maximize the use of those strengths. A company using this approach doesn’t focus on trying to shore up an associate’s perceived weaknesses and try to turn them into something that they’re not. To use a sports example, an NFL team wouldn’t draft a quarterback and try to turn him into a linebacker.
The underlying idea is that associates—and, by extension, companies—thrive when team members are allowed to do what they’re good at and to be their authentic selves. At Birchstone, we use Gallup’s CliftonStrengths assessment to be sure that a potential new hire’s talents and personality align with the role we’re seeking to fill. After a team member is onboarded, we continue to use strengths-based exercises and conversations to coach and develop associates.
MFE: What are the benefits to team members of implementing a strengths-based culture in a multifamily organization?
Deitz: Simply put, associates are happier and more productive when their roles and responsibilities suit their personalities and strengths. They look forward to going to work. They treat prospects and residents better, which has obvious business benefits. They’re bound to be more creative and to tell others in the industry that they’re happy with their job and employer, which can definitely help when it comes to recruiting new employees.
MFE: Can a strengths-based culture translate into business results?
Deitz: Absolutely. There’s ample research showing how this approach can benefit a company’s performance and bottom line. For example, according to Gallup, people who get to use their strengths every day are six times more likely to be engaged in their jobs.
Gallup research also shows that a strengths-based approach can lead to a 10% to 19% increase in sales, a 14% to 29% increase in profit, a 9% to 15% increase in engaged employees, and up to a 72% decrease in employee turnover in high-turnover companies.
MFE: Switching subjects, what is Birchstone's outlook for the apartment market in 2023, and how is your company preparing for any potential softening in the market?
Deitz: On the investment sales front, we certainly anticipate the acquisitions of apartment communities continuing to slow down until the credit markets get their footing. Once that happens, we feel good acquisition opportunities will be out there, but there is a lot of capital sitting on the sidelines just waiting to pounce on the right opportunities. In the meantime, we are staying focused on our platform to streamline efficiencies and bringing greater customer enhancements to our resident base.
As for renter demand, we believe that will remain strong, in part because the rise in interest rates is making home buying more expensive, and our parent company Ashcroft Capital remains active owners and buyers in Dallas-Fort Worth here in Texas as well as Central Florida, Atlanta, and now the Raleigh-Durham-Chapel Hill area in North Carolina.
However, we do feel the market rents for 2023 will begin to more normalize, so we are anticipating a more conservative approach on our gross potential rent side of the equation, but we do believe we will continue to see total revenues rising over the next 12 to 15 months as we begin burning off the loss to lease from the prior year’s incredible rate growth. We hope that as the Fed continues to forecast rate increases, we should start seeing inflation rates begin to trend lower toward the end of 2023. The wild card to the degree of success in 2023 will be largely contingent on the slowing economy and the potential impacts on the labor market and subsequent unemployment rates. If only we had a crystal ball.
