Shelton-Cook Seeking Prudent Growth

Principal Thomas Shelton discusses the Phoenix-based property management firm’s strategy for growth and response to current multifamily market conditions.
Thomas Shelton

A 36-year veteran in real estate, Thomas Shelton, principal at Shelton-Cook Real Estate Services Inc. in Phoenix, Ariz., runs the firm along with partners Pamela Shelton, his wife, and Scott Cook. Since acquiring the company in 2010, the trio has increased the firm’s portfolio from 4,400 units to more than 24,000 units.

Shelton previously served as president of Western National Property Management in Irvine, Calif., and worked as a regional partner at Greystar in Phoenix for 11 years.

At Shelton-Cook, the three partners share equal responsibilities: day to day operations of the firm’s more than 125-property portfolio and working hand-in-hand with 13 regional portfolio directors that directly supervise these assets. They also help clients in the budgeting and forecasting process, projecting capital expenditures and analyzing daily, weekly and monthly activity. And they work with the firm’s renovation and purchasing teams to ensure that all renovation and rehab work is executed correctly and on budget.

Talk about the genesis of Shelton-Cook Real Estate Services. What led you to owning your own firm?

Shelton: The firm was founded in 1984 and acquired in 2010. It was an excellent opportunity that presented itself and I was fortunate to have the resources to execute the transaction. I was with Greystar here in Phoenix for almost 11 years and was responsible for most of the Western U.S. and moved to California for two years, from 2008 through the early part of 2010. Pam and I decided to move back to Phoenix in 2010 and I was looking for an opportunity to continue my career. I knew the lady who owned it at the time (Vicki Allison), and she was looking for someone to come in and be her partner and stabilize the business so it could grow. When we got here, the portfolio was about 4,500 units and almost nine years later we’ve grown that to where we are today, which is about 24,000 units.

How did your past experiences prepare you for this role?

Shelton: I’ve had excellent mentors and teachers, who have helped me with my decision-making ability, showing me how to hire the right people and do the right thing.

What’s the secret for strong management teams?

Shelton: Strong people with a passion, clear direction and communication and recognizing performance. It’s about providing the right tools and resources. You need “list makers” instead of “list doers.”

How would you characterize 2018 and the growth the company experienced?

Shelton: It was a solid year. We added 17 communities and almost 4,000 units. The prior five years saw 15-20 percent annualized growth. We track our NOI growth relative to several market indices, and we continue to outperform the market. That success drives clients to monetize that increase in value.

What is the company’s strategy for 2019?

Shelton: To continue to provide best in class services to our clients and continue to get better at what we do. We will explore ways to be more efficient, be relevant and make tough decisions when necessary. You need to understand the demographics, understand the neighborhoods, understand what the comp set is doing. In this business, sometimes it’s easy to over-improve real estate. I think there’ll be a cap on renovations. It’s just a question of making sure that you check all the boxes and that you’re making a strategic determination about how much money you spend and where you spend it and making sure that you’re going to get a return on that investment.

What does it mean to be a Shelton-Cook resident?

Shelton: A clean, well maintained, caring and responsive staff and value for their dollar. People are happy that they chose one of our communities and would lease from us again.

How would you characterize 2018 and the growth the company experienced?

Shelton: Viability of renovations property specific, an underserved market, comp analysis and an understanding what the resident perceives as valuable and important.

What other growth do you foresee in the years ahead? 

Shelton: More of the same. We will continue to look for companies to acquire and add additional markets—possibly in the West and Southwest—and create new strategic partnerships. Our growth has been fueled 100 percent by referrals and word of mouth recognition. We neither advertise nor employ a business development person. We operate in five states now (Arizona, Texas, Colorado, New Mexico and Florida) and the reason simply is our clients have taken us to other states, and we expect it to be a trend that will continue for 2019. We’ve had some overtures into Texas. We’ve had overtures to go to California and Las Vegas. We’ll just continue to weigh those options. We’re not going to grow just for growth sake, but if there are opportunities to expand and we can do it right and it can be capitalized correctly where the client benefits as well as our company, we will continue to certainly continue to do those things.

What is the company philosophy?

Shelton: To create value through our business practices and fair dealings with clients, to offer excellent and responsive service to residents and a positive, encouraging and growth-oriented environment for employees. We also offer a commitment to neighborhood and community where our properties are located. We are not as big as some, but bigger than others and better than most.