Strategic Management in Downtown Detroit
After more than 20 years, Broder & Sachse ended most of its third-party property management contracts to concentrate mostly on property development. CEO Rich Broder discusses company’s strategy and the state of multifamily in the Detroit area.
By Keith Loria
As founder and CEO of Birmingham, Mich.-based Broder & Sachse, Rich Broder is responsible for all strategic activities of the company, which manages more than 70 properties consisting of over 6.7 million square feet and 10,000 multifamily units.
After more than 20 years, the firm recently ended most of its third-party property management contracts to concentrate mostly on property development, and has been very active in downtown Detroit in recent years, developing The Scott at Brush Park apartments and The Albert Apartments in Capitol Park, among others.
Broder recently took time to talk about the company’s strategy and the state of multifamily in the Detroit area.
MHN: What has been your strategy for 2017?
Broder: In January of this year, we got out of the third-party management business and are only managing our own, and we are concentrating on acquiring and developing for our portfolio. We’ve got some new, very exiting mixed-use multifamily developments, specifically in Detroit, and are in the process of developing some new ones with our eyes on delivering exceptional customer experiences. We’re really trying to hone our expertise in providing a high level of care to our residents.
MHN: What trends are impacting multifamily in Detroit today?
Broder: There’s a positive eye toward delivery of more quality market-rate units in the business, and I think that’s people who do what I do, all rooting for each other’s success as opposed to beating each other up as competitors. It’s a very collaborative effort to bring Detroit back and a very collegial effort as well.
MHN: How has that manifested itself in 2017? What have you seen?
Broder: Every day, people are sharing information, checking each other’s properties, giving one another feedback and bringing a level of product to the Detroit market that it’s really never seen before. We need a lot of density to make it succeed.
MHN: What does it take to be a success in this area when it comes to multifamily?
Broder: At our current level, we are successful, but the questions is Has the concept of what we’re trying to deliver to the marketplace taken hold and is it what our customers want? And I’d say the answer is yes. We are affecting the quality of the market here. It’s not unique as it exists in other major cities, it just did not exist here and it’s time it did.
MHN: What are the biggest challenges of the market?
Broder: Staff and talent. It’s really hard to find the people you need. Unemployment is at its lowest rate and it’s hard to recruit. You have to be on your game in a lot of ways as an employer to get the right people.
MHN: For investors looking to get into multifamily, what do they need to be aware of?
Broder: They have to really watch and understand the local market, understand demand drivers in the market and not be over-exuberant about future rent increases and being realistic about this. I think people generally believe we’re at or near the top end of the cycle.