Asset Managers Bridge the Gap Between Multifamily Investors and On-Site Teams

A Q&A with Stuart Keller, SVP of asset management for Lloyd Jones, in which he shares insights on the role of an in-house asset manager, and how an asset manager can effectively bridge the gap between multifamily owners/investors and property operations teams.

Keller leads owner/operator Lloyd Jones’ asset management group, which monitors the strategic plans for each multifamily property to ensure business goals are being met. The team studies market trends and demographics while keeping an eye on the financial performance and capital improvement efforts throughout the life of each asset. Finally, the team helps determine the right time for asset disposition.


What are the benefits to real estate investors of having an in-house asset manager?

It’s being able to provide context and clarity to the day-to-day operations, and how that’s going to be reflected in the financials. An in-house asset manager can speak to the on-site team and get real-time answers about performance. This adds a layer of understanding to the financial reporting and its impact to the investors’ returns. We can track adherence to the business plan and make suggestions as to adjustments, or even course-correct when necessary. Knowing the ins and outs of the operation piece, plus being able to have that open conversation, is a real advantage. Investors really wouldn’t have that with a third-party operator.


What are the key differences between an asset manager and property manager?

The analogy that I like to use is that the asset manager puts the recipe together and the business manager cooks. The asset manager will develop the business plan, come up with the financial goals and what the end results need to be in terms of property performance. And it’s up to the operations team to execute the strategy and report any deviations or variances and provide feedback to the asset manager, who will then turn around and provide feedback to our investment partners. The asset managers are the financial planners and strategists for the asset, and operations teams are the “doers.”


How do you interact with the property management and its on-site teams?

Typically, interactions with operations are conducted through the regional managers. It’s up to the regional leadership to deliver or adjust any sort of directions to the property. But from a site visit, the asset manager can see firsthand the needs, the wants, and the critical items of the on-site teams and really be able to get that real-time feedback as to what’s working and what’s not working. And we can make adjustments.


How do you help make on-site teams understand the importance of their role of protecting and improving a multimillion-dollar asset?

We start by calling our team business managers rather than property managers to encourage them to treat the asset like a business. We do that by educating the on-site teams on the true impact of value to an asset when we ask them to decrease expenses or increase revenue, and how those dollars will later be reinvested into the property.


How has your experience as a regional vice president helped shape how you work with on-site teams as an asset manager today?

That experience gave me insight as to what actions and events can make an impact at the property level. I understand the people side of the business, and that a 300-unit property is home to 300 families, where kids and families live. I also know the day-to-day challenges of the on-site staff. For instance, unit readiness is probably the single leading cause of poor performance, because when units aren’t ready you don’t have the product on the shelf to sell. So I understand that it might be necessary to call in additional staff to help the maintenance team get the job done.


What should real estate investors look for when considering a real estate investment firm?

In addition to the firm’s strength in multifamily and its experience as an owner/operator, investors should ask about the investment firm’s approach to asset management. Is the asset management team in-house or outsourced? What’s their relationship to the property management team? An in-house asset management team brings value to any partnership by committing more time, energy, and local expertise to an investment.


Stuart Keller has a diverse background in asset management, financial analysis, and property operations. In his role as SVP of asset management, Stuart is responsible for working with property management teams to implement business-plan objectives and to maximize net operating income through enhanced revenue management strategies and cost-saving initiatives.

In a competitive, fast-changing environment, meeting client expectations calls for unprecedented sophistication about business strategy, finance and other areas. Experts name five key areas to focus on.
by Robyn Friedman

Waters Edge at Harbison, Columbia, S.C. In the midst of massive local layoffs that caused multifamily vacancy in the area to skyrocket, the community held the line through stepped-up resident engagement and new programs. Image courtesy of Lloyd Jones LLC
Waters Edge at Harbison, Columbia, S.C. In the midst of massive local layoffs that caused multifamily vacancy in the area to skyrocket, the community held the line through stepped-up resident engagement and new programs. Image courtesy of Lloyd Jones LLC

The days are long past when managing a multifamily community was primarily a matter of collecting rent, paying bills and maintaining the physical asset. Adding value is now a standard part of the job, because of the much-discussed evolution of the profession into a strategic role. In broad terms, the mission is to think like an owner, rather than a caretaker. But the question remains: What do owners and asset managers really want?
Answering the question is a high-stakes affair. “You’re taking somebody and giving them the responsibility of managing potentially a $50 million asset,” said Christopher Finlay, chairman & CEO of Lloyd Jones Capital, a diversified investor and operator. “If you don’t have the right manager, you absolutely will not achieve the business plan. And that could have drastic financial results.”


Strategies for meeting the needs of ownership stem from a handful of trends that are reshaping the property manager’s role.
Fee compression. Management fees vary widely depending on the size of the property, the size of the owner, the market and the size of the cashflow stream, so it’s hard to pin down ranges for property management fees.
But things are getting tighter. Twenty years ago, the fee for managing a typical 200-unit community was close to 5 percent of the total revenue generated at the property, recalled Walt Lamperski, president of Atlanta-based Stonemark Management. A decade ago, the fee was 4 percent; today, it’s 3 percent. “It’s the new competition,” he said. “Everybody is involved in third-party management.”

From left, Dustin Read, Virginia Tech; Kim Collins, CBRE; and Bryan Furze, Federal Realty Trust, at the 2018 IREM Global Summit in Hollywood, Fla.
From left, Dustin Read, Virginia Tech; Kim Collins, CBRE; and Bryan Furze, Federal Realty Trust, at the 2018 IREM Global Summit in Hollywood, Fla.

Labor squeeze. Good multifamily managers are hard to find, a fact exemplified by rising compensation. Ten years ago, the annual salary for managing a 400-unit asset in Atlanta was $40,000; today, Lamperski pays between $65,000 and $75,000 for someone to manage a comparable community. So competitive is the market for skilled managers that National Multifamily Housing Council members give their business cards to potential managers when they receive good service in other settings, reported Rick Haughey, NMHC’s vice president for industry technology initiatives.
Savvy clients. Institutionalization of ownership spearheaded by REITs and other investors have raised the bar for information gathering and financial reporting, noted Haughey.
Technology. Robust development has raised competition, held down yields and forced owners to sharpen their pencils. As some traditional property management functions are automated, a growing number of properties are eliminating the on-site manager’s position.  “A lot of that has to do with competition in the marketplace,” said Dustin Read, an associate professor of property management at Virginia Tech. “The market has been so frothy for multifamily that yields have been driven down.”


So how do property managers meet the rising expectations of the asset managers they serve? For service providers seeking to answer that question, step one is to recognize the headaches shared by both groups. “A lot of property managers think that asset managers sit on high and don’t feel the same pressure to do more with less and wring every dollar out of a property,” Read said. “The more property managers and asset managers understand what each other does, the more opportunities for collaboration.” Here are five essential qualities that asset managers expect today.
Create value. Managers should look beyond the physical confines of an asset in order to understand its place in the larger market. Yet Read’s research suggests that most asset managers think their on-site counterparts don’t fully understand the owner’s objectives. “They’ll say that their property managers are worried about the blocking and tackling on the ground and don’t have any idea what our investors’ long-term goals are,” he noted. A good start: reading the owner’s prospectus, which will help the property manager recommend steps that will help meet or exceed the client’s goals.
At Stonemark Management, Lamperski adds value for his clients by training his team in effective negotiation with vendors. “We’ve been able to create lots of savings without sacrificing the work,” he said. Stonemark renegotiated contracts or switched contractors at Barrington Hills, 376-unit Class B community in Peachtree Crossings, Ga., an Atlanta suburb. The effort saved $20,000 per month on maintenance-related expenses and advertising without cutting services.
To add value most effectively, property managers should be ready to think boldly and willing to take the initiative. So says Bryan Furze, senior vice president of asset management at Federal Realty Investment Trust. Speaking at the Institute of Real Estate Management’s Global Summit in September 2018, he elaborated: “I need someone who’s going to demand a seat at the table.”  And he issued a warning to asset managers that don’t provide that seat: “You’re setting yourself up for failure.”
As Furze reminded his IREM listeners, reducing expenses is much easier than driving revenue. Such was the successful approach at one Federal Realty property. After an ineffective, overpriced security contractor was dismissed, management set several cost-effective alternatives in motion. The staff asked local law enforcement to step up its presence and enlisted the property’s other service providers to watch for suspicious activities. All told, the change saved tens of thousands of dollars annually, Furze reported.
Speak the language of finance. Managers should always bear in mind that each decision they make has an impact on the asset, which is, after all, an investment vehicle that creates cash flow. For that reason, talking about cap rates, NOI, absorption, fair market rent and vacancy costs should be second nature. “Even if you are talking to ownership in really simple return metrics—things as simple as payback period or cash-on-cash return—it signals to asset managers that you understand this piece of real estate as an investment vehicle,” Read said.
Triage effectively. At almost any community, the staff could come up with a substantial wish list of upgrades and programs for residents. But before recommending any new items, managers must think about the economic payback. Apart from safety issues and legal mandates, every proposed expenditure should ultimately be tied to cash flow.
During the summer of 2017, the multifamily market in Columbia, S.C., took a major blow. The expansion of the V.C. Summer Nuclear Generating Station, a $9 billion project northeast of the state capital, was halted after years of delays and construction problems. The move cost some 5,000 local jobs. Occupancy at some communities slid as low as 30 percent. Waters Edge, a community owned by Lloyd Jones Capital, was among those affected.
Yet management’s efforts kept the impact in check and prevented occupancy from dipping below 85 percent. The key was investing in activities that promoted resident morale and involvement at the community. Highlights included a monthly breakfast bar; on-site and off-site activities, such as pizza night and an Easter egg hunt; and purchasing items like tennis equipment and air compressors which management made available for residents to borrow. The upshot of the strategy was a happy environment that encouraged residents to stay—and their friends to move in.
Serve as a resource. Property managers should aspire to to serve as the go-to information resource for ownership. Rather than merely reporting what’s happening at a community, it’s far more valuable for a manager to provide insight into the local market. Nor are facts and figures regurgitated from market reports what asset managers are looking for. Instead, they need what Read calls the water-cooler chatter—for example, “how are consumer preferences changing, how are tenant demands changing, what’s influencing whether tenants are staying or going.”
Read predicted that technology will streamline reporting and other management functions in the future, allowing managers to operate more efficiently. “That will free up time for property managers to engage in different things,” he said. “Technology will fundamentally change property-management expectations.”
Be creative and communicate clearly. Property managers must speak up whenever they have an idea about improving a property’s performance, even when the topic doesn’t fall within their stated job description. And when they do speak up, managers should take care to convey information effectively and deploy it in the field.
“Show up, be very confident, know your stuff and be part of the team,” Federal Realty’s Furze urged his audience at the 2018 IREM Global Summit. “If you’re not welcome at the table, it says more about the asset manager than it does about you.”
Defusing tensions between client and service provider is also vital to communication. Friction tends to arise most often “when there is some disconnect on the quality of trust,” said Kim Collins, associate director for asset services in CBRE’s Indianapolis office, during the IREM Global Summit. In one case, Collins’ team remedied a frustrating breakdown in communications by creating a master spreadsheet that provided an all-in-one tracker for functions at the property.
Read the March 2019 issue of MHN.

Before you entrust your funds to a real estate investment partner, ask some questions.
First: Is your real estate investment partner an Allocator or an Operator? There is a big difference.
Allocators distribute capital on your behalf to Operators. Allocators seek the best operators and invest, on your behalf, in whatever funds and deals operators bring to them. Allocators make sense if you are a pension fund (or similar) with no expertise in real estate investment. You are basically outsourcing that function and knowledge; however, it comes at a cost. You have no input in asset selection or fund strategy. And of course, the Allocator charges fees. This adds an additional layer of costs to you, and these fees come out of the investment thus reducing your returns. An Operator, on the other hand, is the preferred solution if you have the resources to analyze a specific fund or an individual deal. If you invest directly with a real estate operator, you will not only save a layer of expensive fees, but also get to choose a fund investment strategy, (or particular asset), its geography, investment term, and even the potential returns. But be careful how you choose an operator. They are not all the same.
Six questions you should ask your operator:

  1. Focus. What asset class do you specialize in?

If the answer is “retail, industrial, and student housing…” Run! An operator must be an expert in a specific asset class.

  1. Market. What markets do you specialize in?

The same applies to markets. A real estate operator must have a physical presence in the target market to really understand its nuances and trends.

  1. How long have you been in business? In the specific asset class? In the specific market?

Experience is priceless.

  1. How many economic cycles have you experienced? How did you weather the market crashes of early ’90s and ’08?

Real estate is great while the market is booming. Does your operator know what to do in a crash?

  1. Who manages your investment properties? Do you outsource to a 3rd party management company?

There is no substitute for your own, on-site management of your assets. As a wise farmer once told me, “The best fertilizer is the farmer’s foot on the soil.” This applies to property management, as well. You must have your foot – and your hands, eyes, and ears — on the property, at all times. The 3rd party manager has no skin in the game. It’s not his money at risk if there is a budget shortfall.
A word about property management: It is local, hands-on, and very difficult – and probably the most important aspect of a real estate investment. Your management team, especially at the site level, is critical to your property’s success. Few investors/operators pay enough attention to this fact. Let me assure you, it’s very, very difficult to assemble the right team. I can hire 1,000 financial analysts more easily than one, excellent on-site property manager. It’s that hard.

  1. How much of your own money are you putting in the deal?

Most sophisticated investors want to see the operator have money in the deal. It gives them comfort knowing that if the investment is not successful, the operator will share the pain.
At Lloyd Jones Capital, we always invest alongside our real estate investment partners, but, in fact, maintaining our good reputation and strong track record is what motivates us to succeed. With the transparency in the market today, an operator’s reputation is far more valuable than his money.
In summary, when choosing a real estate investment partner, ask these questions and remember:
Real estate is local and hands-on. Your partner should be, too.
Christopher Finlay is Chairman/CEO of Lloyd Jones Capital, a private-equity real estate operator that specializes in the multifamily and senior housing sectors. Headquartered in Miami, the firm acquires, improves, and operates multifamily real estate in growth markets throughout Texas, Florida, and the Southeast. Its affiliated management group is an Accredited Management Organization (AMO®) with a thirty-five-year history in multifamily real estate.

MIAMI –  Lloyd Jones Capital, a Miami-based multifamily investment firm, has purchased the Jackson Square apartment community in Tallahassee, the Florida state capital. The property is located at 1767 Hermitage Boulevard which connects Thomasville Road and Capital Circle, NE, just south of I-10. The 242-unit acquisition brings the Lloyd Jones Capital portfolio to 4,500 units spread across Texas, Florida, and the Southeast.

Says Chris Finlay, chairman/CEO of Lloyd Jones Capital, “This is a well-maintained property, with every amenity, in one of the best neighborhoods of Tallahassee.  We expect it to provide steady income and capital appreciation for our investors.”

Built in 1996, the property offers one-, two-, and 3-bedroom apartments; garages; and a modern clubhouse that includes an interior racquetball court.  Lloyd Jones Capital will continue a value-add program initiated by the previous owner. Finlay adds, “Our local teams scour Texas, Florida, and the Southeast for good investment properties; they are hard to find. Jackson Square is one of the best.”
According to Finlay, property management will be handled by Finlay Management, the operations group at Lloyd Jones Capital.  Finlay Management is an Accredited Management Organization (AMO®) as designated by the Institute of Real Estate Management (IREM®) and has a 37-year history in the industry.

About Lloyd Jones Capital
Lloyd Jones Capital is a private-equity real estate firm that specializes in the multifamily sector. With 37 years of experience in the real estate industry, the firm acquires, improves, and operates multifamily real estate in growth markets throughout Texas, Florida, and the Southeast.
Lloyd Jones Capital provides a fully integrated investment/operations platform.  Its property management arm partners with the investment team to provide local expertise in each of its markets.
Headquartered in Miami, the firm has offices throughout Texas, Florida, and the Southeast, plus New York City.  The firm’s investors include institutional partners, private investors, and its own principals.
For more information visit:

MIAMI, Fla. – Lloyd Jones Capital, a private equity multifamily real estate firm, has acquired the Pendleton Park Apartment Villas & Carlyle Court Apartment Homes near downtown Orlando. The two properties offer a variety of studios, one-, two- and three-bedroom, one-story apartment rentals.

The new acquisitions are adjacent properties located on Curry Fort Road, close to highway access, schools, major universities, dining and retail stores. Select units will receive partial internal renovations including new cabinetry, plumbing and flooring, which will complete the upgrades installed by the former owner. Finally, select amenities will be upgraded, which include a new clubroom. “These are very well-maintained properties in an improving neighborhood,” said Chris Finlay, Chairman and CEO of Lloyd Jones Capital. “They will produce excellent cash-flow for our investors.”

The two acquisitions add 310 units to the company’s growing portfolio. The company anticipates another closing this month with several more in the pipeline. “Good properties are hard to find in this market,” says Finlay. “It takes patience, local knowledge, and diligent underwriting to recognize a good investment. Then it’s up to our operations team to ensure it performs well. Property management is one of the most critical aspects of multifamily investing. We are proud to have a successful history of operations with our partner, Finlay Management,” said Mr. Finlay, who is also the Chairman and CEO of Finlay Management, Inc.

Lloyd Jones Capital is a private equity real estate firm that specializes in the multifamily sector. With 35 years of experience in the real estate industry, the firm acquires, improves and operates multifamily real estate in growth markets throughout Texas, Florida and the Southeast.

Lloyd Jones Capital provides a fully integrated investment/operations platform. Its property management arm partners with the investment team to provide unparalleled local expertise in each of its markets. Headquartered in Miami, the firm has offices throughout Texas and Florida. The firm’s investors include institutional partners, private investors and company principals. For more information visit

Samantha Savory
Director of Marketing/PR
Lloyd Jones Capital
O: 305.415.9910