Patricia Hutchison, president of Mission Rock Residential, just returned from a weeklong trip to Houston, surveying the damage of apartment communities her Denver-based company manages in the wake of Hurricane Harvey.
Thankfully, only two of the communities suffered any damage, it wasn’t as bad as she feared, and she returned to Denver.
Colorado is the biggest market for Mission Rock, which in five years has gone from managing zero apartment units to 24,000.
Together, the value of the properties tops $2 billion.
If you think property management involves sitting behind a desk and fielding questions and complaints from residents, think again.
Take a deep breath before reading the next passage describing the role played by Hutchison, who founded Mission Rock after a long career at Legacy Partners Residential.
She is involved in the planning, coordination, transition, development and performance of the apartment communities she manages. Mission Rock implements policies and procedures, puts together metrics to track the performance of communities and uses best industry practices regarding things such as the management structure, compensation, training and use of technology.
Even though she was just getting her feet back on solid ground, so to speak, after a week in soggy Houston, Hutchison was kind enough to answer questions for Rebchook Real Estate Corner, brought to you by the Colorado Real Estate Journal.
Rebchook: After a long career with Legacy Partners Residential, what made you decide to launch your own company?
Hutchison: Legacy is a great company and I learned much from working there. I was approached by Mark Hamilton, the CEO of a large real estate company in San Francisco, and asked if I would be interested in running their management operations. I worked with Mark Hamilton prior to working with Legacy Partners, and I gained an understanding of his goals and objectives for the Hamilton Zanze portfolio. Since the formation of Mission Rock Residential, I now work very closely with Tony Zanze. Subsequently, we have performed very well on the HZ properties. We are proud, today, to manage not only the Hamilton Zanze portfolio properties in 11 states, but we also have many additional third-party clients.
Rebchook: Do you remember the moment when you decided to take the plunge?
Hutchison: It was a very difficult decision to make a change after being with Legacy Partners for 20 years. I’ve always dreamed of a company that shared my specific ideals and cultural values. After much thought and meeting with Mark Hamilton, Tony Zanze and Kurt Houtkooper, it became clear to me that our ideals and values were fully aligned … and this was my destiny. I remember the moment I decided to make the leap of faith very well. It was about four months after I had met with Mark. I had lunch in Phoenix with the Hamilton Zanze principals and their CFO, Charlie O’ Connell. It became clear to me that these gentlemen were the kind of human beings I wanted to be partners with. Over the years I have been approached by management firms that have mission statements on paper only – this was an opportunity to create a mission statement that resonated with my partners, team members, customers and investors.
Rebchook: What and where was your first management contract?
Hutchison: We opened the doors in August 2012 and transitioned our first properties (a total of 10 properties) in October of 2012, all owned by Hamilton Zanze. I knew at the start that the task before us was monumental, that there would be a huge ramp-up and we prepared accordingly. We had transition plans and contingencies in the event we experienced the unforeseen.
Rebchook: What is currently your largest assignment?
Hutchison: Recently we were awarded the management of one of the most desirable assets built in Colorado. It is a new construction development in Highlands Ranch (featured in a recent Rebchook Real Estate Corner column) that was built by an innovative developer out of Southern California named ReyLenn Properties. Many of us on the executive team have worked on several lease-ups, but this is our first one under the Mission Rock Residential flag.
Rebchook: How does Mission Rock Residential rank in size compared with other third-party multifamily management companies?
Hutchison: Mission Rock Residential currently manages 24,000 units. There are third-party management companies that are larger and manage up to 400,000 units, however, most of the “Top 50” management companies are in the 30,000- to 90,000-unit range. We are growing but at a rate that allows us to manage each property with focus and success. Each new property that we roll into our portfolio gets 100 percent of our attention so we can ensure that the team understands our programs, processes and culture.
Rebchook: To manage 20,000-plus units in five years seems like quite an accomplishment. Did you expect to grow this fast? If not, what were your initial five-year growth projections?
Hutchison: We did expect to grow rapidly, so in advance of onboarding properties, we had people in place even before our doors opened. This allowed us to develop handbooks, policies, collateral material and other necessities. We also created a strategy for the transition process, using best practices and experienced “transition teams,” so that each region was smoothly shifted into the Mission Rock Residential company. We then proceeded to onboard over 14,000 units in eight months. We knew we would have a fast growth period at the beginning, given the Hamilton Zanze partnership, but it truly has not slowed down. We have developed an A-Class team that I am very proud of, and I am grateful to have the honor of leading. I have never enjoyed working so hard in my life.
Rebchook: Along the same lines, what are your growth projections moving forward?
Hutchison: Our company goal is to manage 37,500 units across the country by 2020 – we are well on our way to accomplishing this goal. We do not aspire to be the biggest property management company … just the best.
Rebchook: What are the biggest challenges you see in managing properties today as compared to when you started in the business? I imagine it would include things like delivering packages to residents, but feel free to be as specific and detailed as possible.
Hutchison: There are some areas that are more challenging now compared to when I started in the business. Today’s employment environment is one of those challenges in terms of attracting and retaining talent. We have recruiters and a great human resources team that helps us, but it is more difficult than it used to be when I started in the industry.
There is an inordinate amount of data in today’s management business. Owners’ expectations include that property management firms provide ad hoc information routinely.
Package delivery has also become a challenge as residents expand their online purchasing. We are currently working with Amazon’s Universal Locker Program to ensure our residents receive packages and reduce our staff’s time of managing packages in the leasing office.
Repositioned projects are more commonplace than when I first started in the business. As a result, we undertake a lot of ‘value-add’ projects. Everything from unit renovations, to exterior upgrades, to the addition of clubhouses and other amenities, our capital projects team is regularly under pressure to deliver on time and within budget. In the environment that we are in, ensuring we have the best vendors to execute these ‘value-add’ projects is essential.
Rebchook: How do you keep residents happy, so they don’t post nasty comments on Yelp and similar sites? And when someone snipes at management on social media sites, how do you deal with it?
Hutchison: We have a culture of providing the highest standard of care to our residents. We provide the best possible customer service at each property. In many cases, we exceed expectations, but there are always people who will not be satisfied. Reviews will happen, and we always hope they will be more positive than negative. When a negative review is posted, we respond as quickly as possible to show that we take our customers’ feedback seriously and to promptly deal with their concerns. We genuinely look at each review as a learning opportunity of how our entire team can improve. We also empower our team members with the ability to make decisions in order to keep our residents happy and resolve issues that arise. This is an important part of our employee retention strategy.
Rebchook: Is multifamily property management a predominately a male-oriented business, like so much of commercial real estate? If so, do you ever dealt with a “boy’s club” type of atmosphere?
Hutchison: In the multifamily property management business, it is comprised of mostly females, until you get to a certain level. Higher-level positions have been predominately male, but women are making great strides. Forty seven percent of the American workforce are women, so many companies that were a “boy’s club” are slowly changing to a more equal playing field.
I have been in companies early in my career where the “good-old boys club” was certainly prevalent. Mostly that was before my career began in the property management field. There are still elements of that in this industry as well, though, for sure. For me, I never allowed sexism to affect me, as I always took gender out of the equation. I learned quickly that I needed to educate myself to be an excellent performer to excel and be respected by peers of all sexes. That is how I gained respect from the “good-old boys.” Then they began to ask and rely on my expertise in the business.
Rebchook: What advice would you offer to a woman who wants to get into this business?
Hutchison: Property management is a wonderful industry with a lot of opportunities. Many executives started at an individual property, which allows for opportunity and the understanding of basic property management administration. It helps greatly to learn the most you can about each and every position so you have a well-rounded knowledge of the industry. For women specifically, my advice is not to be intimidated by their own gender. Through participating in women’s’ networks, listening to how others have handled similar issues and mentoring others so that over time gender becomes a non-issue, I have a lot of optimism when it comes to gender equality. Most of all I encourage women to be confident in their own abilities, speaking their mind and remaining passionate about their well-founded decisions.
Rebchook: Thanks for your time, Pat.