Since it was founded 25 years ago, LEDIC Management Group, a third-party investment real estate management firm, has built a reputation for successfully managing newly constructed properties. But the company has made its name in the multifamily real estate industry by repositioning distressed properties for its clients.

LEDIC, which currently manages approximately 35,000 units in 13 southeastern states, is one of the few fee managers that is completely third party; it does not have a controlling interest in any of the properties that it manages. This unique situation presents its own set of obstacles.

“One of the challenges we face daily is with consistency across our portfolio since our clients drive many of the business decisions on-site. This affects everything from information technology equipment to employees,” says Brent Garrett, LEDIC’s president and CEO. Many of these clients — including such prominent companies as Bank of America, Freddie Mac and GE Capital Realty — also have very different goals for their real estate investments, whether that means seeking long-term appreciation or regular cash flow from rent income. “Obviously we want long-term relationships with our clients. However, it is the nature of this business to have clients that hire us in order to produce a quick stream of revenue for them,” says Garrett. Regardless of clients’ investment goals, LEDIC prides itself on researching all physical, marketing and financial aspects of each new multifamily property assignment.

Bethany Huffman, the company’s senior vice president of finance, explains that prior to the initiation of a management contract with a client, LEDIC’s integration specialists usually work with its operations and financial services team members to prepare financial analysis, marketing plans and capital investment schedules. “One of our greatest contributions is the level of intensive and sophisticated analysis for all clients and assets,” says Garrett.

The company casts a wide net over Southeast apartment properties. Managed properties range in size from 50 to 1,000 units each. Developments range from low-budget multifamily housing to luxury high-rises. Each end of this property spectrum presents a unique array of challenges. Recent low interest rates have led luxury apartment dwellers to buy their own properties instead of renting. “This is when it is most important to study the competition and understand the concessions that are being given with each new lease,” says Pete Kinsella, chief operating officer. In this vein, LEDIC relies on aggressive lease-up, lease renewal and resident retention programs to maintain and increase rental numbers. LEDIC-sponsored programs, such as its 24-hour Guaranteed Maintenance Response Program and Preferred Vendor Program, also keep tenants coming back. “With the record-low interest rates, we know that resident retention is the most cost-effective form of marketing,” says Debi Raffanti, senior vice president of corporate support.

Low-income housing introduces its own intricacies to LEDIC’s management framework. LEDIC currently manages 10,000 units in properties that are bond-financed, tax credit or require regulatory compliance. The company’s compliance unit monitors and analyzes all the affordable housing properties it manages. “We have a very important obligation to our clients to ensure that not only are the employees we hire fully following the Federal Fair Housing Guidelines, but it is also important to LEDIC that we offer quality living to people of all socioeconomic backgrounds,” says Raffanti.

Garrett notes that affordable and luxury multifamily housing projects are not mutually exclusive. The two types of investments can be combined — LEDIC has had success with a number of mixed-use communities. The company is currently partnering with the city of Memphis, Tennessee, private investors and the Memphis Housing Authority on a development for the revitalization of the city’s downtown. The community will feature public, tax credit and conventional housing. “This is the best of both worlds for LEDIC,” says Kinsella.

Whether managing low-income or luxury properties, good property management for LEDIC involves the same set of procedures. “Our operators focus on the basics of property management and effectively handling the day-to-day operations of a property — walking the property each day, monitoring all vacant units, studying and knowing the competition, thorough and frequent communication with our clients, following a well-planned budget and taking care of residents,” says Garrett. “Because of the diverse talents we have in our operations group, we have the skills to manage all types of multifamily real estate assets for our clients,” adds Kinsella.
LEDIC has an in-house staff of more than 1,000 employees with capabilities that seem to rival those of companies five times its size. LEDIC itself wears a variety of hats — property manager, market researcher, rehabilitation contractor, pre-development advisor — and also provides a plethora of services, including risk management, loss prevention, human resources administration, marketing support and technology support. How is it possible to juggle so many roles?

“In order to meet the needs of our clients, we simply must have the very best team members who specialize in each of these fields — property management, market research and construction. When this group of high-energy, dedicated team members gets together on a development, they determine the best way to position, or in many cases, reposition a property,” says Garrett. LEDIC also provides special project assistance, including due diligence, acquisition analysis, acting as representative on financing workouts, coordination of financing and re-financing and coordination of closings. LEDIC is proficient in turning over and transitioning properties on a moment’s notice. The company can prepare properties for sale by physically preparing the properties and working with potential buyers. LEDIC, also a licensed general contractor, has an in-house construction department that offers new construction and rehabilitations management for customers. LEDIC has managed construction or renovations at more than 90 properties.

LEDIC has an effective way of training its employees to shoulder these varied responsibilities. A special program called LEDIC University trains the company’s team members in subjects such as leasing, customer service, retention and financial analysis. “LEDIC University is a comprehensive training program that concentrates on the core competencies needed by our on-site operations staff to be the most successful they can be in this industry,” says Raffanti. A mold-awareness training program was added to the program this year for all field operators and corporate management. The program also stresses the importance of following fair housing and sexual harassment guidelines.

One of the company’s selling points is that it often transplants its personnel at a moment’s notice to meet the needs of a project. “With our diverse geographic presence, we are now offering Web-based training to ensure we have consistent quality of education for all team members, regardless of their location,” says Raffanti. “Our training and development objectives are a priority with this company. This is a major component of the career-pathing process for our employees.”

With this kind of intensive training, it comes as no surprise that LEDIC continues to grow in spite of current economic trends. “We believe the Southeast in general is set for a recovery. We firmly believe that clients of LEDIC will see a maximum return on their investment,” says Raffanti. Expense control is currently an important part of the company’s philosophy.

When revenues are low, expense control is key. “Our cutting-edge information technology professionals are hard at work implementing initiatives to increase efficiency, thereby decreasing costs,” Raffanti says.

Memphis-based LEDIC, which currently has regional offices in Atlanta; Charlotte, North Carolina; and Nashville, Tennessee, and regional property managers based throughout the Southeast, hopes to soon strategically expand its presence in Texas and Florida. The company won’t, however, grow simply for the sake of adding units to its portfolio. “We now have a carefully designed integration process to ensure that any expansion we do is the right choice for our clients, employees and investors,” says Garrett. “Being able to meet the goals of our individual clients is our daily mission. We look at each individual property we manage in a different way. Our teams work to maximize profitability — for the client and for LEDIC!”

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