Putting Families First
- Jul 25, 2012
Picerne Military Housing has built a portfolio of more than 20,000 units at Army installations across the country, serving both military families and single senior officers. By focusing on putting families first, Picerne Military Housing has achieved powerful results as far as resident satisfaction goes. MHN Associate Editor Michael Ratliff recently spoke with John Picerne, president & founder of Picerne Military Housing, about the benefits and challenges of running a fully integrated development and management company for our soldiers and their families.
Can you give us a bit of history on Picerne Military Housing?
Picerne Military Housing was originally founded in 1998 as an offshoot of my family’s development company, Picerne Real Estate Group. After living through several real estate recessions, I was looking for something that was unique, government-related and recession-resistant, if not close to being recession-proof.
Military housing did not seem like a field that every developer in the world was tracking. The barrier to entry was a little bit high, and the business itself was difficult to understand. From 1998 to almost 2000 the government was trying to figure out how to do it. Eventually, the Army issued a pilot program with four projects. They issued RFQs for those projects, and we bid on Ft. Meade in Maryland in 2002. That was our first win.
Is military housing recession-proof?
I would never say recession-proof, but perhaps extremely recession-resistant. One of the biggest challenges in any segment of our industry has been overbuilding. In privatized military housing, there is a built-in prohibitory factor against overbuilding. This makes it a safer bet from the start. We are also always going to need military housing because we are always going to be defending our nation. Furthermore, the markets that I have chosen to be in are all installations of high importance to the military.
Picerne Military Housing was ranked number one in terms of resident satisfaction on the 2011 SatisFact Annual Residential Survey. What is your strategy for ensuring happy residents?
Our slogan is ‘Families First.’ Our residents are families, and our families are first and foremost who we serve. That is where our mission lies. This really all comes down to three guiding principles: 1. To be the best provider of service in our industry, 2. To be the best place to work, and 3. To provide community outreach and a source of community pride. Every team member in our organization is focused on making us the best providers of service in our industry, which fosters being the best place to work. This becomes a flywheel principal that keeps spinning round and round all the way to our residents.
What are some of the major differences between conventional apartments and military housing?
In the general apartment industry, we typically expect to turn over 30 to 40 percent of our portfolio annually. At Picerne Military Housing, we are currently turning over between 50 and 60 percent of our total portfolio annually due to deployments and the market shifts of the military. Turning over 50 to 60 percent of a 24,000-unit portfolio is a pretty huge endeavor. And unlike normal apartment management—where the turnover takes place somewhat uniformly over the year—we transition about 80 percent of our total turnover in the months of June, July and August. Needless to say, the summer is a pretty busy time for us.
Can you give us some details on the single senior officer housing program? How did you identify that niche?
The military is all about leadership, training and positive reinforcement by senior officers. One of the things I noticed was the seniors, at least on the company side, were all forced to live off the installation because there was no place for them to live on the installation. They couldn’t live in our housing because they didn’t have families, and they couldn’t live in the barracks because they were already full with young junior enlisted. Basically, single senior officers had fallen through the cracks.
We were able to convince the Army that it made sense to have dedicated housing for single senior officers. It was something they wanted but never thought was possible to do. We convinced them it was the right thing to do, and we developed Randolph Pointe—our first project on Ft. Bragg. It is 350 units of housing with just over 500 beds.
It took about four months to lease up and we have been running at 100 percent economic occupancy for the last two years. I have been in the apartment industry my whole life; I never before had a project that ran at 100 percent economic occupancy. It has actually been so successful that we are planning to break ground on a Phase 2 of the project in the next couple of months. In addition, we are working with the Army to develop an overarching policy for this type of housing at hopefully all of their installations.
What has been your greatest accomplishment over the past year?
In April, our foundation Our Family for Families First was named the ‘People’s Choice Winner’ of the Joining Forces Community Challenge put on by First Lady [Michelle] Obama and Dr. Jill Biden. It was a way for them to honor foundations and charities doing work with military families. I got to meet the First Lady at the White House and it was just great to see how many folks in our country are really trying to help military members and their families. I would say that is the greatest thing to happen to me in the last year.