Over the past few years, centralization of leasing efforts has become one of the hotter topics in the industry. Much of this conversation has been a direct result of the COVID-19 pandemic, which sparked a period of evaluation for many companies as they both dealt with staffing challenges and looked to run their businesses and properties as efficiently as possible. At the fourth annual LeaseCon/TurnCon conference, which took place in December 2022 at the Hilton Uptown in Charlotte, North Carolina, a panel of owners and operators discussed their views on centralization, and the best practices they’ve picked up along the way.
Wesley Deese, owner of Providential Student Housing, moderated the panel and was joined by Jerry Wojenski, CEO of Varsity Campus; Gavin Short, regional manager with The Preiss Co.; Joel Brovont, COO of Granite Management; and Danny Hyche, director, centralized operations with Greystar. The following is an edited transcription of their conversation.
Deese: How have you approached the subject of centralization within your organizations? Do you have any advice for getting that ball rolling?
Hyche: At Greystar we rolled out centralization across 200-plus assets in our owned/conventional business, as well as student living. My focus was really on rolling out a successful program for student, because as we all know, student housing is very different. It is higher touch with parents and residents. Our approach was really about the people. We wanted to make sure that our community managers felt supported. We were seeing that many were overwhelmed and hiring was becoming difficult. Our approach really came down to the question, ‘how can we roll out a program where our community managers feel most successful?’ We didn’t want to take away a full-time equivalent position and cause more work. We wanted to take away all of the busy work from the community managers and allow them to focus on the resident experience.
Short: Ten or 15 years ago Preiss was a lot smaller. We probably had five properties when I started working here, and things were centralized out of necessity. There weren’t enough bodies in the company, so one person did all of the invoicing for all of the properties. As we grew, we were able to have all of the personnel needed to lessen our centralization. But as we’ve grown even further, we’re now seeing the value in pulling some of that work back into the office. If we’re investing in hiring really good people on the front lines of our leasing, we can afford to pull some tasks back to the corporate level and let the on-site team work purely on sales and marketing. At the site level, you’ll often see that the person who is in charge of back office tasks like paying invoices will also have to be involved in leasing or resident management to a certain degree. As the company has grown, we’ve trended towards keeping them in the leasing realm driving revenue, while shifting some of that office work to the corporate level to an employee that might have come from one of those properties and flourished in that position and let them handle multiple properties.
Wojenski: We come across times where major world events precipitate change. I think
COVID-19 was that for our industry. Everyone here on the operations side knows that student housing is a full speed ahead business — from turn, to move-in and getting the new leasing cycle going. December is really the only slow time where we get to rest and take vacation. We don’t really have that time to look at our model and platform and question if we’re doing it right. Or if there’s a way to break the platform and put it together in a different way. While we had some ideas prior to the pandemic, we never really had the time to explore them. Then, all of a sudden, we were working remotely and still managing our properties. Then, we had labor issues across the field and we still do! Building out quality teams on the site-level has become harder since COVID. The pandemic gave us time to look at the platform and question what if we did things different? What if we took some of the leasing and brought it in-house to corporate where we have highly trained professional leasing agents who are closing, know how to close and are increasing our velocity? They’re not replacing our site teams completely — just adding that extra juice to the leasing cycle and helping the site teams by going through the dashboards, inquiries and leads and getting those deals closed. And that’s all they do. They aren’t bothered by people walking into the office asking about a package or a roommate issue. They are only there from nine-to-five picking up the phone and getting that lease closed. It’s every leasing manager’s dream. And on top of that, this is their career. Their performance is measured by results, so therefore you have longevity with that person. You’re not having to train or replace new CA’s every 12 months. That takes energy, effort and time out of your leasing process. We just started a centralized leasing program in June and have seen tremendous results and have a fabulous group of people working with us to grow this department and change up our platform for the future. It’s exciting, and while we don’t want to go through another pandemic, I think it was a good thing for our industry in some ways because it made us revisit and made us more efficient.
Brovont: When we moved from West Lafayette, Indiana, and started managing more regional properties, we had to do an internal analysis and consider what tasks we absolutely needed to have someone on-site for. Having that positive resident experience is key, so we considered what work we could take off that local staff member and move to an office somewhere, whether that’s lease processing, turn organization or accounting. We want our local staff focused on what they’re really good at, and that drove our centralization efforts.
Deese: We’ve spoken a lot about removing the administrative burden. Jerry [Wojenski], you mentioned a focus on the sales aspect of the business. What is the data telling you regarding the program you started this summer? Are you seeing higher success?
Wojenski: We are. What I envisioned with the program is, if anyone has gone on vacation and been looped into one of those vacation rental pitches, they are highly effective sales people. They almost got me in Scottsdale, Arizona! And I thought to myself, ‘gee, if I had a team of these people, we would be unstoppable.’ But they don’t get paid CA pay. So I looked into making this a program within our company. We started and have already had an impact of 10 percent year-over-year pre-leasing velocity at the communities they’re helping. The director of the program said it’s because we are constantly mining and working leads. So we had an initial impact and it is going to increase because we just got started. They’re working to make the effort of working with properties seamless, where it’s not like two different leasing teams but an extension of the same team. I’m very proud of our team and the results have been great.
Deese: For a team working nine-to-five with a sole focus on leasing, is that from a call center? Are they able to work remotely? Give us a little bit of the logistics.
Wojenski: We’ve had a return to the office. I had an Elon Musk moment where I was calling everyone saying that they need to show up to the office because I believe deeply in collaboration. We learn from each other and move faster through the cycle that way. Everyone works from the office, including this department. Right now, it is not a call center and they’re not taking calls. We get all of the leads from the site level or online through Entrata, which is the software platform that we use, and they just open up the dashboard. At one property, there are around 60 leads a day, which is plenty of work for one person to mine through where we don’t need to start taking phone calls. Let the property still do some of that work. Our in-office team is just going through these leads and following up on them one at a time, but most importantly we’re calling them up with the purpose of closing the lease. That is a commitment where our team is focused on getting that lease to close.
Deese: Have you been able to get a sense of how much is coming through via chat versus phone calls?
Wojenski: It is getting harder and harder to reach out and communicate with every new generation of students that comes through. We have to use every avenue and vehicle to get a message out — email, phone call, text and now social media. We have closed leases and had negotiations via direct messaging on Instagram. We’re trying to figure out how to grow that experience because it has been very effective. We are using alternative channels to communicate with tenants and even parents now. Parents used to be so reliable about picking up the phone or answering email, and that is no longer the case. We’re texting parents more than we used to and having more results. It’s a learning process, but it’s harder than ever.
Deese: I know that Preiss utilizes a bit of a hybrid approach where efforts aren’t centralized in an office in Raleigh, North Carolina, for example, but you have a centralized team. Can you tell us a bit more about that?
Short: Over the years, we’ve had these rock stars that are slinging 1,000 leases per year. In addition to being great at what they do, clearly they’ve got some talent that we need to be able to share across our portfolio. We like to take our exceptional folks and send them to different properties that are struggling across our portfolio. And rather than tell those up-and-coming employees what to do, we like to have them watch and learn that way. These skills and talents are sometimes more caught than they are taught.
Deese: Is this role more of a traditional traveling leasing specialist?
Short: There are moments where they do act as a traveling, traditional leasing specialist. But there are times where they’ll be overseeing a number of properties from a home base following up on leads. That’s a bit of the hybrid approach. We’ve also set up six of our properties where, if you provide a valid credit card, you can go through a self-guided tour of the community and we’ll respond back to follow up on the lead. We’re trying a hybrid approach in a thousand different ways.
Deese: So Joel [Brovont], you’re working with a scattered site portfolio, which utilizes centralized leasing. You also have a pretty robust portion of your portfolio that is traditional purpose-built student housing. Are there any lessons you’ve learned on the scattered site side that you’re looking to apply to purpose-built student housing?
Brovont: We have probably 2,000 or so beds that are smaller purpose-built properties in smaller, tertiary markets, and we also have a team of regional property supervisors where their full-time job is to check in with properties in the portfolio that they have been assigned. These folks will be on a schedule with day-to-day check-ins and travel to the sites so that they can be in-person to provide training or during the really heavy leasing periods with the goal of providing a great leasing experience while increasing retention.
Deese: Danny [Hyche], Greystar has tried a lot of different methods as well, especially on the conventional side. Can you tell us a little bit about your approach?
Hyche: Greystar is actively utilizing centralized leasing on the conventional side. We have a team built in Dallas that is a hybrid model focused on different areas. We decided not to fast-track it for student. I’m not saying it’s never going to get there, but our on-site leasing teams are doing an amazing job and we did not want to mess with that while we’re taking away the admin functions. We want to see how we can stabilize operations at the site level before we look at any other operational changes. The goal of a centralized platform is really cost savings, and we’re really not seeing any cost savings in centralized leasing.
Deese: In 2018, I spent some time in the U.K. seeing operations on the purpose-built student accommodations side, and they’ve got centralization down to a science. There are really two reasons for that. One, those student communities are nowhere near the size of the properties that we build here. Very rarely are you going to see anything that is 500 beds. You’re never going to see anything that is 1,000 beds that is not owned by the university. The other thing is that students don’t have the same expectations from a hospitality and services standpoint that we have here in the States. Do you see anything in this process of centralization that you feel like absolutely needs to happen on-site that you’re not going to try to centralize?
Short: Preiss has been really hesitant on the leasing end. We put a lot of money into the payroll of the leasing employees that we hire. That’s our bread and butter; that’s what we do, we focus extensively on the leasing end of it. We’ve consolidated a lot in operations — that’s what we’re all basing this transition on. We’re pulling experts that matriculate through the site level to corporate as they mature through the company. At this point we have a lot of centralized operations and marketing. We have in-house IT and accounting, obviously. There is a lot that goes on at the corporate level outside of upper level management that has been centralized from the property. We’re even talking about centralizing more operational aspects of on-site work, like rent collection. We want the site level to be pure sales and marketing. Our main focus would never be to do away with face-to-face leasing. We’re happy to outsource part of the process like lease signing and paperwork. We’ve had the most success when you have an engaged on-site staff that knows the names of all of the residents and has the right parties. The difference is who you have in the office. That’s what we’re selling -— the Preiss way — so we want to invest heavily in those people. The marketing side of leasing we’re going to keep at the site level.
Hyche: We’ve got to get them through the door and love the experience, but once they’re living at our properties, we want them to love living there and we want them to renew. For us, it’s really just about making sure they have an amazing experience. We like to make sure we know how our residents are doing from a health and wellness perspective and making sure they’re successful in their student career. Having that on-site support to touch on all of those things is really important.
Wojenski: You can’t centralize the maintenance team. Someone has to go in there and fix the pipes, but on the site team, I’ll play a little bit of devil’s advocate. I love our site teams, but do they have to be so big? Can they be more efficient? If you have five CAs working on a property, you can’t tell me that every single one is excellent. And you can’t guarantee that quality every time. More than likely, three are consistently great and the other two were the best of the worst when you picked them and they’re filling office hours. Why not just have the three great people there? And some of the work of the other two place holders you parcel out to your corporate team. Those two CAs, nowadays, are making $15 per hour on average each, with benefits that’s $30. A fraction of that goes towards reimbursing the centralized corporate leasing department to do that role and then the other money helps to offset for your higher maintenance costs because your maintenance labor is more expensive. That’s why it’s becoming more expensive to operate in our industry — labor costs. We have to think of ways to have face-to-face connections and also make the properties more efficient with better quality control on our teams.
Deese: Some of you are looking at potentially eliminating on-site positions, which means that the payroll at those properties is going to go down. Does any of this help generate more revenue for the management company?
Hyche: Our goal is not to create revenue for the management company, it’s really to generate revenue for the ownership and the investors. We are eliminating positions where it makes sense to do so. For conventional, we’ve centralized maintenance as well. We typically do so by market. In Dallas for instance, instead of having a full-time maintenance supervisor at every single property in a two-mile vicinity, we have one centralized maintenance supervisor and techs that support them in all of the different properties. We’ve looked at it in every different way, but the goal is to increase the total valuation of the property.
Wojenski: We’re not actively targeting positions and eliminating them from our company. Some of it is organic, like in places where we’re having a hard time backfilling positions in the current labor market, we’ll consider whether there is a workaround where we don’t need to fill that open role. We are doing this for the clients and providing the best leasing platform to our clients that join us. If you’re buying into the Varsity franchise and letting us lease your property, we want you to have the best leasing platform out there. What we’re trying to provide is a high quality of service and great results, and to create a scenario where properties are running as efficiently as possible.
Short: At Preiss we’ve seen it as kind of a happy offshoot of the focus on leasing. Where we have two or three properties in the same vicinity, we’ve made area managers. Off the top, that saves an immense amount of money. We’ve done that with maintenance too.
—Edited transcription by Katie Sloan
This article was originally published in the January/February issue of Student Housing Business magazine.