Apartment developers should have the ability to adopt the perspective of property managers—and vice versa, says Mark Dambly, president of Pennrose. “Developers tend to consider entitlements, construction contracts, development budgets,” says Dambly. “They do not instinctively think about how the trash gets put out, where the maintenance shop is going to be, and the need for a file room and where that is going to go. We need to have developers look at the operational aspects of the post-completion property and how that affects the development plans.”
Dambly and the Pennrose team have had plenty of time in the past five years to think through these issues and inculcate an appropriate company motto—“We Bring It All Together”—as they implemented the company’s rebranding strategy. Pennrose has been known as a developer and manager of affordable housing in much of its 31-year history, but since 2005, the company has embarked on a repositioning, says Dambly. “We are rebranding the company and reminding people that we are one company—not Pennrose Development or Pennrose Management, just Pennrose.”
Under its rebranding and repositioning, Pennrose has embarked on a strategy to expand its business by launching into the market-rate apartment development and property management businesses. “You can get only so many tax credits in every jurisdiction,” comments Dambly, who says the company still develops about 800 to 1,000 units per year of affordable housing.
Pennrose now manages a portfolio of over 145 properties, representing more than 8,500 units, both affordable and market-rate, located in Pennsylvania, New Jersey, Maryland, Ohio, Tennessee and Alabama. Since it was founded in Pennsylvania in 1981, Pennrose has developed and managed more than 150 communities and 10,000 units. Developments the company has engaged in now include seniors housing, adaptive reuse, historic rehabilitation, master-planned communities, as well as market-rate apartments. The company has developed everything from a premier conventional property, The Vue in New Brunswick, N.J., to Saint Luke’s Manor, a rehabbed hospital turned affordable seniors housing located in Cleveland, Ohio.
Richard K. Barnhart, who began at Pennrose in 1985 as co-owner and president of its development company, took over after the retirement of Pennrose Founder John B. Rosenthal in 2004. Barnhart continues to lead the company in his capacity as chairman and CEO.
Under its rebranding strategy, Pennrose also planned to bring its apartment development and property management divisions, which had worked independently for the most part, culturally closer together to create greater synergies. “In the past five years, we have placed a lot of energy into working hand-in-hand on new developments from the beginning of feasibility all the way through stabilization,” says Robert Lampher, president of Pennrose’s management team.
Property managers, says Lampher, can take on more of the apartment owner’s perspective in managing apartments, and “get to the proactive and predictive sides of property management.” Predictive market benchmarks, for example, can be examined throughout the month. “Even if the property is performing above expectations now, there could be a decline in metrics that might not show up right away,” says Lampher. Property management, he adds, can be tailored to deliver on the owner’s plan for that asset, to reflect long-term hold, or even a change in hold strategy.
On the market-rate development side, Pennrose now has about 12 apartment projects, representing about 1,000 units, under development, in markets including Washington, D.C., Baltimore, Philadelphia and New Jersey, says Dambly. The company currently manages a number of market-rate communities including Skyline Tower in New Brunswick, N.J., as well as The Reserve at Summerset at Frick Park in Pittsburgh, Pa.
To implement its restructuring, Pennrose has added what the company describes as “a diverse” group of professionals who have expertise in market-rate apartment development and management. The company now has about 450 employees in property management and about 26 in development. The company has also created a new asset management department and enhanced accounting services, and added emerging trends analysis, which it says is vital to multifamily housing owners.
“Our new united front, along with the enriched client offerings, will deliver more value than ever before both to conventional and affordable properties and clients. This is an exciting new era for Pennrose,” states Lampher.