Former MFE Executive of the Year and Archstone veteran David Woodward built one operating platform at Chicago-based Laramar Group. Now, he’s off to build a company from scratch with start-up CompassRock Real Estate from his home base of Denver. “I love building organizations,” Woodward said during a chat at the National Multi Housing Council Apartment Strategies Outlook Conference Jan. 17 in Boca Raton, Fla.

Woodward secured CW Financial Services as a financial partner, and his new company’s initial focus will be managing assets in CW’s special servicing portfolio. “There’s a significant opportunity to manage properties in CW’s special servicer portfolio,” Woodward says.

Woodward also draws on a deep relationship with many other key servicers in the business and says he has already secured business from other sources. He even sees potential opportunities to expand beyond multifamily. Jeff Elowe, president and founder of Laramar, will take on Woodward's CEO title.

Woodward will launch his operation in New York, where he has management contracts in place. CompassRock will begin operation in 15 markets this year and plans to add another 10 markets in 2013 to complete its national footprint.

A 20-year veteran of the industry who was at Archstone when the company built its management operations, Woodward has secured a significant number of property management, asset management, and construction management and receivership assignments in his career. 

Woodward acknowledges that there’s probably a short-term shelf life, maybe five years, in managing for servicers (though he thinks some servicers may see some “interesting investment opportunities”). Eventually, he thinks CompassRock can sustain itself with contracts from long-term institutional owners and new owners who buy assets that it manages.

“It’s an opportunity that is as big as I can make it,” Woodward says.

Matt Slepin, founder and managing partner of San Francisco–based real estate executive search firm Terra Search Partners, thinks Woodward, with a capital backer and pipeline of business secured, is in a great position to launch a new business. “It’s a dream scenario for a real entrepreneur,” Slepin says.

In many ways, CompassRock will resemble a traditional property manager. Woodward will lead the organization, with regional vice presidents reporting directly to him, for now. He’ll look to add vice presidents with some background in student and senior housing as he adds those property types to his portfolio. He’ll bring in a chief accounting officer instead of a chief financial officer.

Outside of this, Woodward would like a small, committed team of about 25 to 50 people in his Denver office. “I’m trying to break the traditional mold and outsource some back-office functions,” he says. “I’m converting a fixed cost into a variable cost. I think it will be a much more efficient and scalable model.”

Specifically, Woodward is looking for ways to outsource the human resources and information technology functions. Size is a key driver as well. “It’s more manageable with a small group,” he says. “With fewer employees, you can be selective about who you hire.”

Slepin says he wouldn’t be surprised to see others outsource back-office functions in multifamily. Already, many companies rely on outside firms to staff call centers.

“In a world where things are in the cloud, this line between outsourcing and in-sourcing is blurred,” Slepin says. “If you can take 20 people who are too expensive [in expensive areas of the country] and you can replace them with 20 people from less expensive places, it makes sense.”

Woodward thinks the small group will be able to help him control the company’s culture, but Slepin warns that it’s hard to develop a culture with a small number of employees in a top-heavy organization. “How do you maintain corporate identity or corporate culture [with so few people]?” he asks.