The apartment industry benefits when new talent arrives from outside the sector to shake things up. When Tim Reardon left the sports retail business in 2012 to join Bridge Property Management as director of revenue management, he was tasked with launching the company’s first revenue management department. The operations arm of the Murray, Utah-based company needed to get up to speed with industry standards, which was not an easy assignment to tackle: The firm had a 30,000-unit portfolio valued at more than $4 billion in 16 states.
Early on, Reardon discovered that pricing services were the norm in the apartment sector, but he wasn’t afraid to challenge industry orthodoxy. In the meantime, results spoke for themselves. “In the first year, we realized a 9.4 percent increase on same-store sales on properties we owned for at least 18 months,” he said. Retaining this outside-the-box philosophy, Reardon now oversees the revenue management operation from the C-suite: He was named chief operating officer this January.
“There’s been a long-standing thought process that if you have a 95 percent occupancy or higher you’re doing well, and if you have less than 95 you’re not,” said Reardon. “We would love to never again ask for that occupancy stat.” He acknowledges that this day may never arrive. However, his team focuses on other metrics they consider more telling, such as overall growth rates and turn speed. That helps build a narrative around the data that complements the story coming from boots on the ground.
“Sure, you can use occupancy numbers to determine whether a property is a success or not—and there are a lot of things you can do to achieve that goal, such as really dumping your price to get to that 95 percent occupancy rate,” he added. “But then you’re not fixing the underlying issues, which could be leasing, maintenance or a number of things that are really the problem. We want to know where the squeaky wheel is.”
To illustrate the point, he noted that one property has never been occupied above 94 percent in the two and a half years Bridge has owned it. Nonetheless, the company was still able to drive rent growth by more than 25 percent; this was made possible by the company’s strategy of paying attention to where the market was going and understanding that it’s hard to make up ground once rents are dropped.
Channeling childhood passions
“Tim is a human calculator, and he never forgets anything,” said Greg Warner, revenue manager at Grand Atlas Property Management, who has worked with Reardon in different roles including senior revenue analyst and director of revenue management. “On top of being well-versed in the multifamily and revenue world, Tim’s detailed knowledge of each individual asset is exceptional and contributes to optimal performance.”
This passion for data and analytics can be traced back to Reardon’s childhood love of baseball; not only playing, but also collecting baseball cards. “I’d freak my dad out consistently when I’d sit in my room amongst a sea of cards. He’d pick up a random card and ask what that player’s batting average was in a particular season and I’d generally know the exact number,” he recalled.
Reardon says he was a pretty good athlete but was not blessed with size or amazing ability, so he always had to look for a different angle to compensate and become better. “If I could read a pitcher’s move and read his tendencies, I could be more successful as a base stealer. If I knew what pitch our pitcher was about to throw, I could position myself better based on a higher percentage of a ball being hit to a certain spot.” Not surprisingly, Reardon’s favorite book is Moneyball, Michael Lewis’ bestseller about the Oakland Athletics’ unconventional strategy for success; he loves the approach of looking for an angle overlooked by others.
After graduating from UCLA in 1995 with a degree in physical anthropology, Reardon worked in sports media, first TV—Fox Sports Network—and then internet content—Broadband Sports—until the dot.com bubble burst in 2001. “I was then in retail including licensed MLB, NFL, NBA product (jerseys, hats, T-shirts) and some sports memorabilia until late 2012, when I joined Bridge.” If he had not discovered real estate and property management, he might have become a baseball general manager.
“I did see myself ending up in this sector eventually, more so through individual ownership than the path that I am currently on,” he noted. “If I weren’t in real estate, I’d probably be stuck in a downwardly spiraling retail industry, constantly cursing about Jeff Bezos!”
Fueling investor success
In his role as COO, Reardon said, he is experiencing operations from the corporate side by determining which software solutions Bridge will be using and how they’ll get implemented, as well as overseeing departments such as training and revenue management and procurement.
Prior to the creation of his department, there wasn’t much emphasis on data-driven analytics. “I think the success that we were able to have throughout the revenue management implementation made everyone a lot more comfortable with a more clinical look at property management through the numbers. I don’t think that (interest in data) was happening prior to that—at least not to the same degree.”
The benefits of a data-driven approach have fueled the success of the parent company, Bridge Investment Group, which deals not only with multifamily but also commercial and senior housing debt. “Bridge Investment Group has been in huge growth mode,” he said. “What we’ve been able to prove in the multifamily sector over the last five-plus years has given us the ability to go back and acquire more investor money that’s allowed us to really put that growth into play.”
Bridge will now be running three funds at once where previously it only had two. “Our (multifamily) unit count has been fairly static for the last three or four years just based on disposing of two of our initial funds: Fund I and Fund II,” he noted. “We’re now in Fund III and we’re launching two more multifamily funds: Fund IV and then Workforce and Affordable Housing Fund I.”
The biggest success enjoyed by Reardon’s team in the last year has been the implementation of Bridge’s business intelligence platform and getting buy-in on it from all levels of the company. As other newcomers to the apartment industry have discovered, Reardon said, the challenge is trying to bring technology into a sector that is generally slow to adapt to it and allowing people to feel comfortable with resulting changes.
Concessions seem to remain very minimal in most markets and rental rates are still on the rise, he noted. “There’s obviously a lot of talk around the country about rent control and part of that is due to the increases in the rental rates over the past three or four years,” he observed. “I think everyone understands at this point that the recent run the apartment market has been on can’t last forever.” There’s money still actively flowing into the sector and purchasing remains a tough task. At the same time, there’s no room for error because cap rates are low enough that even small market turns can have a huge impact.
To be competitive when things start to turn downward, you have to have your processes in a place that’s not necessarily mistake-free but is edging toward perfection. “The returns at your fund level may not be where you had promised them to be, but with streamlined operations you can hit the numbers you’re promising your investors and prove you’re the best in your sector,” he added.
Reardon meets these challenges by fostering a collaborative environment. “Tim is an exceptional leader. He is extremely personable,” said Warner, who attributes Reardon’s success to his ability to teach and persuade.
According to former colleague Courtney Lowe, a national operations executive at JRK Property Holdings, Reardon is a leader whose brain works faster than most—but he is humble about this attribute. “Tim leads and teaches by making you laugh uncontrollably while discussing and analyzing numbers and percentages which can be boring to some and completely incomprehensible to others,” she said. Lowe added that Reardon will not leave a conversation unless he believes the person he is speaking with understands the discussion and the reasons for the decisions made.
“I’m not an industry veteran. I came in not knowing the lingo—and I still don’t to the most degree,” admitted Reardon. He remains unafraid to ask the “dumb” questions that some people might be embarrassed to ask. The result is open and honest dialogue within his team and with other teams in the company. “It lets our analysts really be creative about what they’re doing,” he concluded.
Images courtesy of Bridge Property Management
You’ll find more on this topic in the September 2018 issue of MHN.