- Nov 10, 2014
One company, two families, three generations. That’s the short story of Drucker & Falk, a noted real estate management and investment firm now in its 76th year.
With a 30,000-unit fee managed portfolio spread over seven states, this is no mom-and-pop property management operation although it is firmly rooted in family and tradition. In addition to multifamily management, Drucker & Falk also offers multifamily and commercial investment brokerage services and commercial property management, with an office/retail portfolio of 4 million square feet. Over the years, the company has turned down buy-out offers from major national players, preferring to continue on the path their grandfathers initiated.
“We’ve changed with the times, which I think can be one reason why companies rarely make it to a third generation. But we’ve held on to the core principles of the original founders,” says David Falk, Jr.
The three current Managing Directors of the company—David Falk, Jr., Wendy Drucker, and Kellie Falk, are the grandchildren of founding partners A. Louis Drucker and Emanuel Falk. They’re the children of Erwin Drucker and David Falk, Sr., who expanded the company from Virginia to North Carolina 45 years ago.
Privately held mid-size companies don’t always last past a second generation, and partnerships bring an extra layer of potential complications. But the managing directors of Drucker & Falk believe they may even make it to a fourth round of descendant ownership, and they point back to their grandfathers as one of the reasons why.
Louis Drucker and Emanuel Falk came from very different backgrounds. Drucker was a British immigrant to the U.S., who had served in the Merchant Marine before opening a grocery store in Newport News, Va. “Manny” Falk, a Newport News teen, met Drucker when Falk applied for a job as a fill-in clerk at the store. When Falk was away at college, Drucker was accidentally locked in the grocery’s walk-in freezer, significantly damaging one of his lungs.
This incident would prove significant for his family’s long-term future. To recover, his doctor recommended that Drucker go to a high-altitude climate. With funding from disability insurance, a policy he had the foresight to purchase, he took his family to Switzerland.
When they returned, he decided to sell insurance—after all, he could personally attest to its benefits. Manny Falk had attended the University of Virginia and returned to Newport News, where he was buying and selling property. They teamed up, and Drucker & Falk, offering insurance and real estate services, opened its doors in 1938, with an investment of $100 from each partner.
“Their ethics and values, like honesty and transparency, were ingrained in us as children. And once we joined the company, the guiding principles came from what we learned from our parents and grandparents. When we make decisions and lean upon those, it turns out well,” says David Falk, Jr. He and his sister,
Kellie, knew they wanted to join the company as children. Both spent large amounts of time in the office with their father, David Sr., who was a single parent.
“He was always dragging me along to the office or to properties, and we lived in apartments growing up. If there was a fire at 1 a.m., I got out of bed to watch it burn,” says Kellie Falk. Both she and David Jr. began working for the company as children, doing jobs like pool cleaning, grounds keeping, and apartment maintenance—so they began to learn the business from the bottom up.
Second generation growth
When Wendy Drucker decided to work for Drucker & Falk in 1981, after college and a first job on the West Coast, her father sent her to the company’s Raleigh office to learn from David Falk, Sr. He had aggressively expanded the company from its Newport News beginnings.
“They called my father (David Falk Sr.) the steam engine and (Erwin Drucker) the safety valve,” says Kellie Falk. “He wanted to take risks and see the company expand.” From the late 60’s onward, David Falk Sr. developed apartments around Raleigh and expanded the company’s range throughout the southeast, more than doubling the size of the fee managed portfolio. His other passion in life was dairy farming, and later in life he started a company that bred show cattle.
His partner, Erwin Drucker, was the company’s legal advisor—he earned his law degree at Harvard—and operations expert. His daughter describes him as a sharply dressed leader who set an example of working hard and maintaining strong client relationships.
Like the Falks, Wendy Drucker was first tasked with taking on entry-level work to learn the business, beginning on-site, cleaning and leasing apartments and solving day-to-day problems. Then she became a roving manager, tackling troubled assets and lease-ups, and moving to problem properties for short stints until they were turned around.
“I’ve really done everything that there is to do within the organization over these 37 years, except for perhaps the role of high-level corporate accountant,” Drucker says. She speaks fondly of her memories of moving from community to community.
“I was my own boss, and I had to produce my own results. That was fabulous from a standpoint of learning how to deal with different types of people, coming up with solutions to problems, and getting to know the resources within different communities. It was a fantastic experience.”
Today, Wendy and Kellie each oversee roughly half of the multifamily portfolio, Wendy focusing on the mid-Atlantic region from Newport News, and Kellie working south and east from the Raleigh office. David Jr. is the company’s primary investment broker, identifying assets that might be strategic deals for the company’s clients and working through the due diligence process to purchasing the asset.
All three partners say they entered the business because it was their choice. Not all of their generation was interested—the Falks have two other siblings who decided to follow alternate career paths, as did Wendy’s only brother.
“We had to earn the right of being an owner, and then buy in. We weren’t given our interest. I think that’s a huge difference than just being expected to join the firm,” says Wendy Drucker.
A 1,000-member family
Among the principles that have been passed down through the Drucker & Falk generations are respect and appreciation for the company’s employees. All three directors mention their executive and administrative teams, as well as their site staffs, as being vital to the company’s success.
“We’re well into our second generation of employees, and even though we’re a little bit big, we’re still a family style company. You can walk into my office and tell me you’re mad about something,” says Kellie Falk. Spread over multiple states, Drucker & Falk now employs more than 1,000 people. Many have been with the company for decades, and spouses and children of employees are frequent hires.
When it comes to hiring the next generation of Druckers and Falks, however, the partners want to make sure that they let their offspring decide for themselves whether or not to cast their career into the real estate domain. Each has two children.
“I don’t want to pressure my kids, who are the youngest. But nothing would please me more than seeing Drucker & Falk at 100 years old with another generation involved,” says David Falk Jr. Wendy Drucker adds that her son, a high school senior with an interest in sports management, may be a candidate to come on board. Kellie Falk, though, takes a different approach.
“My sons have asked for jobs, but I tell them to go work for somebody else first,” she says with a laugh.