Executive Spotlight: Todd Bancroft, Draper and Kramer
The 125-year-old firm’s new president & CEO took over for Forrest Bailey and was previously COO & general counsel. Under his leadership, the company is revisiting both its investment and asset management strategies.
As it celebrates its 125th anniversary, Chicago-based Draper and Kramer Inc. has promoted Todd Bancroft to president & CEO. Bancroft is taking the helm at the commercial real estate investment, financing and residential management company from Forrest Bailey, who decided to step down from his long-term positions.
Bancroft had served as the firm’s COO & general counsel since 2014 and has a deep background in law and real estate. Previously, he worked at Bancroft, Richman & Goldberg, a Chicago law firm he founded in 2010, and spent 13 years with Equity Marketing Services, a professional sales and marketing firm for condo development projects and condo conversions. It was there that he first formed a relationship with Draper and Kramer, partnering with them for a condo conversion way back in 1997.
In his new positions, Bancroft will be tasked with continuing Draper and Kramer’s legacy while capitalizing on new opportunities for investment and net operating income growth. In November, Draper and Kramer acquired North 680, a luxury community in Schaumburg, Ill., as part of a 1031 exchange following the company’s sale of Fieldpointe of St. Louis, a 318-unit property in Maryland Heights, Mo. In October, Draper and Kramer teamed with Edge Principal Advisors on the $131 million sale of Wheaton Center, a 758-unit community in Chicago’s suburbs, to FPA Multifamily.
What led you to working for Draper and Kramer?
Bancroft: I worked at Equity Marketing for 13 years and then the downturn was really its deathblow. There were no condominium sales, no new condominium projects, so its entire business model all but went away. So, at the beginning of 2009, I decided to open a small law firm and was targeting general real estate work as well as condo associations. A year later, we took space with Draper and Kramer as they had a bank of offices that were vacated. We were doing some work with them, but once we were invited in, that work grew. By 2012, I was named general counsel and, ultimately, went in-house as the chief operating office.
What are your new responsibilities as president & CEO?
Bancroft: I’ve been in the interim role since mid-August and it became official in early November. From a learning-curve standpoint, there wasn’t that much that I wasn’t familiar with since, as general counsel, I worked with all the divisions. What’s different though, as CEO, is getting closer to the real estate business and real estate operations. We have some really talented people on our acquisitions and asset management side of the business, and it’s great to help lead that group and be part of how we’re growing our assets.
You’ve known Forrest Bailey for a long time. Was there any advice that he gave you that helped in the transition?
Bancroft: We get together for lunch every couple of weeks, and I’m fortunate that he’s a very close friend of mine, remains active in the business, is a shareholder and is on the board of directors. Having that continuity with him has been very helpful in the transition. Having his continued involvement in all facets of the business has been great.
Looking ahead to 2019, characterize what the firm’s investment strategy is going to be.
Bancroft: Right now, we’re hard-charging to revise our strategic plan. We’re looking at the existing asset base we have and trying to determine the business plan for each one of our properties. And we are taking a fresh look at what markets we want to be in going forward. We have a significant amount of analytics going into it. We are looking at markets that from our standpoint have high-growth characteristics—job growth, population growth, a University project—and markets where we feel we can come in as a player and buy right. From our standpoint, that is probably not coastal markets. I think we are a better player in more of that middle-market Western region.
What’s on the company’s radar and why?
Bancroft: We’re active right now in San Antonio. We’re active in Chicago. We’re active in St. Louis. We’re looking at a variety of different markets and have things in process. From our radar screen, we really see going back to our existing properties and looking at what we want our portfolio to look like going forward. What we’ve done is refocus our efforts on our portfolio at large. We have a mantra that we want to double our portfolio in the next seven to eight years, and we are looking at what it will take to do that with an appropriate level of risk- return.
What are some multifamily trends that took root in 2018 that you think will carry over in the year ahead?
Bancroft: The biggest trend I see right now is that we are back to the nuts and bolts of true asset management and value creation as real estate people. We cannot rely on cap rate compression to make us all look smart anymore. We need to go back to the basics of making sure our properties run efficiently, making sure we are maximizing the NOI, and on a going-forward basis, actively managing our properties to maximize their value.
What else is important for investors to look out for in today’s multifamily environment?
Bancroft: From the standpoint of an investor, you want an operator or sponsor of a deal that you know has the experience, skill set and capabilities to do that blocking and tackling. What companies can do from a value-add standpoint is really important. The other thing I think is extremely important and another initiative of ours we are working on is the investor communication piece. You want to have an operator and sponsor who is transparent but maybe even goes the extra yard to keep you in the loop on how your investment is doing. What are the great things and what are the challenges?
What’s your biggest piece of advice with today’s current market?
Bancroft: We all need to refocus on making money on the buy. As cap rates go up, I think the opportunity for companies like Draper and Kramer is to come in and buy properties right. With that focus and the right plan going forward, that’s a recipe for success.
Can you talk about any key deals you’ve done recently?
Bancroft: We just closed on our Wheaton Center property, a seven-building property in Wheaton, Ill., that we bought in 2014 with a business plan to basically put (in) a $40 million capital program, which included reskinning one of the main towers and saving one of the buildings that had some structural problems. We had the right engineering team that came up with a terrific solution. Having sold that a few weeks ago, it was really a grand slam for the company.