Audio:                    Welcome to AEC Marketing for Principals brought to you by [Smartigies 00:00:05] where we help design and construction firms navigate sales and leverage marketing to win more projects. Here are your hosts, Katie Cash and Judy Sparks.

Katie Cash:                    Hi everyone. Thanks for tuning in this week. Today Judy and I are talking with the founder and CEO of Highlands Residential, Dave Loeffel. Dave, welcome to the show. Thank you for joining us today. We're really excited to talk a little bit about multifamily and what's going on in the industry with you today.

Dave Loeffel:                Well, it's good to be here, thank you for having me on.

Katie Cash:                    Great, well, before we dive into the discussion and get into the details, can you share a little bit with us about Highlands Residential and what you're doing over there?

Dave Loeffel:                Absolutely. Highlands Residential is a apartment development company focusing on the empty-nester clientele. The communities are age restricted, 35 and older. The reality of who actually lives there is what I refer to as the recently retired grandparents.

Katie Cash:                    Okay.

Dave Loeffel:                Yeah, we positioned our marketing a little bit different, to be a little bit more aspirational than that. But at the end of the day, when you're talking about design, the person that actually is residing there is that individual. That's the archetype. The idea is to create communities where my mom would want to live, at the end of the day. And so, there's a lot of people like her in that demographic. And so this is an apartment community that focuses purely on them.

Katie Cash:                    Oh, that's great. And I'm sure using your mom as your litmus test is a little bit of a challenge, making sure that it'll appeal to her and her friends and her peer group. But that sounds like a really great product that you guys are putting on the market. I know Highlands Residential is a little bit new to the game, but you're not new to multifamily. Looking on your resume, you've been in the game for a really long time, serving for a number of years with Walton Communities, and before that, as an analyst, back at [Accenture 00:02:11].

Katie Cash:                    So I can imagine that you've seen a lot of trends come and go. Certainly we're seeing more and more of the development around this 55 and up, but any other trends that you're seeing kind of shaping the multifamily housing development here across the southeast?

Dave Loeffel:                I guess the way I would put it, so I've been in multifamily 16 years and I think that people really appreciate and experience more so now than historically. And so experiential living is, regardless of how old you are, or what stage of life you're in, having those experiential elements is important to provide. The great benefit that I have is that I can focus on one demographic. It's a bit of a protected class in the fair housing mall, but I can target a demographic and focus on providing value to them. So regardless of who you're building for, that element of experience is something that people are looking for in general. That's probably the biggest change that I see.

Judy Sparks:                  So Dave, the word customer experience or that idea has become front and center for most brands these days. It's really about the experience one has when interacting with your brand. And I would imagine when you are working with our target base, which are primarily architects, engineers and contractors, that mentality really needs to transcend down to your team and partners. Can you talk a little bit about how you've seen that relationship shape and change as the priorities go from brick and mortar, simple beds and units to, how do we create a destination that is unique and serves the need of the customer?

Dave Loeffel:                That's a good question. And really I guess I would put it simply as, when you go from product to program, what are you focusing on? And really, to a degree, maybe it needs to start with the program and then you're reflecting the product instead of it being afterthought. I think it's very important to understand how your customer interacts with your product and what it is that makes you successful as a developer, and for your entire team to understand exactly where the bullseye is. If your target market, or the profile of your residents, if it's every 18 months they're moving out of there and you've got ... If you got to have a lease every single day, then that initial experiences is incredibly important and you've got to nail it on that initial impression.

Dave Loeffel:                On the other side, I think everybody's more profitable as they maintain residents over time and then the question is, okay, once they're in ... Everybody, obviously, to get [inaudible 00:05:31] to work, you need to lace it up. But in order for a community to really thrive, you want to maintain that occupancy over time. So, trying to focus on what those things are, it'll have an impact over time, to me is highly important. And, you know, given the length of stay, even if it's, say, four years, that's a dramatic difference in the number of leases I've got to sign every month. And so the re-lease is the lease. You got to maybe tweak the product a little bit and tweak the .. Provide different programs in order to build that into the community.

Judy Sparks:                  So you just said something really interesting that struck me and that was this concept of thriving communities. And you were talking about the communities of, within the your properties. But something that is really top of mind for me these days is seeing multifamily product's going into thriving communities, in itself. You know, popular bedroom communities, suburban communities. And lots of times it's met with public opposition. So can you talk a little bit about how, in the world of development, how do you develop a place where your mother would want to live, but also satisfied and enhance the thriving community that currently exist?

Dave Loeffel:                Yeah, I think that ... Well, I'll tell you what I think helps to communicate and then the question is, how do you communicate it so that it's heard? I think what helps to communicate is, real estate in general, and communities, don't go down because of one specific real estate use. Everything is rental for the most part. Every grocery store or restaurants or office, the vast majority of real estate is rental. And so, people have this impression of rental communities being lesser than and that's a burden that I'm certainly aware of. I truly think, though, that municipalities, because of just a need to provide housing, needs to take on a role of raising the standard, if you will, and maintaining a standard.

Dave Loeffel:                Because at the end of the day, the municipality is the landlord and everybody pays a rent check through property taxes every year. And if you don't, you will be evicted. So there's a lot that I think municipalities have ... Some have, some haven't. But there's a role to play to create communities that are cohesive. Connections, parks, enforcing code on people. I mean, the good management companies enforce code on themselves, but municipalities sometimes stand around and just let community's rundown. And it's a super complicated topic, but because it's so complicated, it really needs to be discussed. And I don't hear that aspect discussed, I certainly do not claim to have an answer and certainly not the answer, but that needs to be part of the discussion.

Katie Cash:                    I think that's really helpful. And, you know, it is a deeper topic that has lots of levels to it. Lots of nuances depending on the communities in which you're going into, and some of the histories behind those communities. There was something else that you mentioned a little bit earlier around the idea of being a successful developer. And if we could, I'd like to pivot just a little bit and talk, maybe, to the partnership aspect in what you are looking for as a multifamily developer when it comes to selecting design and construction partners. Or maybe even program management partners. So, do you guys have maybe like a formal selection process that you use when you are determining which architect is going to design that new community for you or who might build it?

Dave Loeffel:                It's not incredibly formal. And a lot of times it's, obviously, quality is preeminent. Any business needs to have good sourcing of their inputs, period. And that's, design contractors that could be capital and financing, land residents, whatever it is they need to do the best job that they can sourcing those inputs. But when you're looking at the design professionals, clear communication of what you want ... And sometimes recognizing that that evolves over time, you can't just send somebody a white paper on your business and expect them to get it.

Dave Loeffel:                If you really want your design professionals to understand how you approach development, then that takes time. But in order for you to utilize that time, you need to have the time in your budget, you need to have access to the people that would matter. You need to have a quality of professional that can get it and there has to be some kind of resonance there where, regardless of how clearly you articulate what you want to do, that they have to identify with that some way. And so I would say all of that is very important. As far as the selection process, we can select and de-select. So that's, I think it's always good to strive towards a great relationship.

Katie Cash:                    So maybe on that topic of deselection or maybe running down a relationship, what are some things that firms could do that might actually lose your business for them? Like what are some of those nonnegotiable things when firms are looking to serve as Highlands Residential?

Dave Loeffel:                Sometimes I think people just are not going to connect, just like any relationship. And so there needs to be some allowance for that. Certainly. And sometimes I've made a bad choice about a designer to go with. And no matter how hard I tried to explain it, they just can't hear it, what I'm trying to explain. And you know, I like to say is, communication is co-mmunication. It's two people speaking, two people listening to each other. And that's true of businesses as well. You know, the other thing is, there needs to be ... The term "eye to eye." See each other eye to eye and I think it can go both ways where you've got one party essentially looking down to the other one.

Dave Loeffel:                And there's not an understanding that the designers getting ramped up, maybe the principle's doing a lot of work up front, creating a site plan. But at the same time, every site is speculative. There's business development both ways. And so you've got to acknowledge that on both sides and strive towards a relationship that works and is empathetic and you've got some trust that over time, everybody's going to be good.

Judy Sparks:                  So Dave, you mentioned this idea of eye to eye and as soon as you said that I thought, yeah, it's really not a owner/vendor relationship you're looking for. It's really a partnership. And the nature of what you do is highly speculative. So things like empathy and patience must be characteristics that are required in order to engage in the type of work that you do. So I know that a lot of our clients love to work for developers and are very active in the multifamily space of all different types of products, from affordable housing, student housing, senior housing. But what I hear often is, I don't know how to get my foot in the door because the development industry seems to be so relational. And if you don't have a preexisting relationship, how do I meet a new developer and earn his trust and earn his business on my first job. Do you have any advice for that?

Dave Loeffel:                Well, for one, you probably have to have come from somewhere that builds that book of business. So there's got to be some demonstration of having executed on the product site. Because when I started my new business, I've got 15 years behind me, but I also have partners that, together we're well over a hundred years of experience kind of thing. And I talk with them constantly and that builds people's confidence that they believe in me. And so it helps people answer the question of whether that person can believe in and what I'm saying.

Dave Loeffel:                The same is true with any professional, there's just only so much time in the day and you have to put together ... You have to put yourself out there in a way that answers questions without having to dig too deep. You've got to have experience. There's nothing around that. But then, even as you're starting, you're probably doing a lot of business development, design work, speculative design work, and demonstrating something that resonates back to the developer. Okay, that looks great, and oh by the way, I know it can actually be built. I think we all know designers who specialize in things that can't be built, quite frankly. And that's just a complete blind eye to the reality of your potential client. So you've got to have your eyes wide open as to my reality. And that is absolutely demonstrated through your design work.

Judy Sparks:                  So, let's fast forward and an architect or a contractor has gained your attention and they have a resume in the type of work that you do, and you're having a first meeting with them. What are three things that you want to hear them say?

Dave Loeffel:                That's a good question. Three things that I want to hear the designer say.

Katie Cash:                    Or contractor.

Dave Loeffel:                Yeah. Yeah. I think that I want to see the experience. This is what I've done, is obviously one thing. I want the contractor or designer, engineer, whatever, asking me questions about my business and what's important. So I want to hear him say what he's done, I want him to ask me what's important and throw a third one in there, something that tells me that he doesn't think he's got it all figured out. Because once you've got it all figured out, then you're closed off to hearing anything. And then I know for certain you're not going to hear me.

Judy Sparks:                  That is excellent advice.

Katie Cash:                    Absolutely. So a little humility goes a long way in understanding that you don't know what you don't know, but you're open to that kind of discovery process together.

Dave Loeffel:                Yeah. I'll add one more thing, the world changes so quickly. If you don't have an architect, or engineer, contractor even, that loves their craft enough to pursue new knowledge and techniques and ideas. If they're not interested in that, then chances are they're just going to be turning the crank. Which is fine for some that, that wouldn't resonate with me. But I want somebody that, at least in their shop, is not worried about every single hour being billable. I want them to think, how can I improve as a professional?

Katie Cash:                    That is a great advise. I think a lot of people in our industry sometimes get a little overburdened with all the sheer amount of work that just has to be done. That you really do have to take time to reenergize yourself and your passion and your craft. Stay up to date with what's going on and open your mind to the possibilities of advancement in both technique and materials and explore new vendor relationships, even, that might help you expedite that exploratory journey. That's been really helpful.

Katie Cash:                    So as I'm sitting here, I was trying to take notes about what makes up a great partner and a lot of it seems to be about the people that the firm might be bringing to the table. And whether or not there's a good chemistry. You mentioned a lot, do they listen? Do they abide by this co-communication, two way communication between the teams? Are they empathetic? Can you build trust with them? And then the other side of it was kind of the non negotiable, I'm not going to risk my development with a firm that hasn't either designed or built this type of product before.

Katie Cash:                    I need a multifamily expert here that has ... they've got the scars, they've got the lessons learned from it. Is there anything else outside of those two things? A lot of times when we're talking with developers their perception sometimes is, time is money so I need people that can get it done faster and then cheaper. I don't know that that's necessarily something that's come true with our discussion today. You seem to be really invested in this idea of creating something new and investing in that journey along the way, and realizing the value in that. But is there anything outside of the people and the experience that's important to you?

Dave Loeffel:                Yeah, I think sometimes it's just ... you've got to balance out your developer's weaknesses as well. So there's got to be a good balance or completion of my skillset. So if there is something that ... If I need a ton of capacity because capacity constraints, then I can't work with a one-person shop as easily as I can with somebody who's got some depth. I mean there's obviously knowledge gaps as well, you want them to come to the table with, which we kind of, sort of, talked about. But there's other things like, you're just too small and I'm going to worry if you get hit by a bus that I'm starting over.

Judy Sparks:                  Sure. Yeah. So Dave, it sounds like you're really looking for partners who can compliment you, where their strengths may be ... are your weaknesses and vice-versa. Our listening base is the C-suite of design and construction firms and I want to give you the final word in our interview. And if there's just a very high level C-suite advice you'd like to communicate to that audience when they are looking internally at their performers, and they're in your market, and how can they be more successful?

Dave Loeffel:                I think it starts with, I mean this sounds so cliche, but they're cliche for a reason, or they're often said for a reason, but be true to yourself. Clearly communicate who you are, because it does nothing to win a job that you can't execute on. If there's something that you need to work on, then figure out how to make that true and complete the puzzle internally. Part of that is be honest about it ... Don't make promises you can't cheap.

Dave Loeffel:                So, somebody comes in and win the business, just say that up front. I hire great people so that they can execute, but I want to make sure you understand the heartbeat of this firm, and so I'm talking to you today. Chances are you're not going to see me again, but I mean, if that's true, then just say it. That type of thing. Because if you're true to yourself then the person that's going to be attracted to you, they're going to be attracted to you based on an honest representation of who you are, and it's going to be a better partnership. If you're not a good sales guy, hire a sales guy and just sit there in the room with him and just be honest or whatever it is. That's what I would say.

Katie Cash:                    That is great advice. We really appreciate your honesty with us and with our listeners today, Dave, and wish you all the success as you continue with your venture with Highlands Residential. And thanks again just for speaking with us today, we really enjoyed it.

Dave Loeffel:                Yeah, absolutely. My pleasure.

Katie Cash:                    Great. Well for all of our listeners have a great week, we'll see you next time.

Audio:                    You've been listening to AEC Marketing for Principles brought to you by Smartigies. If you liked this episode, please let us know by visiting aecmarketingpodcast.com where you can learn more ways to position your brand and sell to owners.