Mr. Fix It: Meet Dave Woodward

Not too long ago, Laramar Communities had a major problem on its hands. The firm decided it was a smart time in the real estate cycle to maximize investor returns by disposing of a majority of its 20,000 apartment units. This move, however, presented a major obstacle: The disposition significantly impacted management fees, and the firm faced the imminent possibility of dramatic layoffs and restructuring to compensate for the lost revenue.

Enter Dave Woodward, problem solver extraordinaire. Laramar's CEO and managing partner quickly crafted a masterful plan to avoid losing his team members. The winning solution: the 2004 rollout of a fee-management division to offset revenue losses. In less than six months, he personally attained more than 4,000 units of fee-management business. To ensure the division's profitability, the companies must meet Woodward's carefully selected criteria, which limit the clients to institutional owners with a portfolio of at least 1,000 units in markets where Laramar already owns properties. Plus, Laramar insists on implementing all of its own operating systems and programs.

Woodward's ability to step in with a solution comes as no surprise to his industry colleagues. “In many ways, Dave is fearless,” says Connie Moore, president and CEO of BRE, who worked with Woodward in the '90s at major REIT Archstone-Smith and its predecessor, Security Capital Group. “He continually exhibits the attitude, ‘Throw something at me, and I'll try to figure it out.' Dave has always pushed for innovative ideas in the areas of technology, energy efficiency, and finance that have been at the forefront of the business.”

Give the 2007 Executive of the Year any problem—big or small—and he will find a way to fix it, often by soliciting the advice of both corporate players and on-site property managers. You'll frequently find him running in and out of his colleagues' offices or driving from property to property in search of ways to improve the company's operations. This hands-on approach helped Woodward, in seven short years with the company, transition the Greenwood Village, Colo.-based Laramar Communities from a small, niche player with inconsistent business practices across 12,000 units to a national value-add real estate firm with a solid industry-wide reputation. Today the firm, which operates under The Laramar Group moniker, owns and manages about 10,000 units and fee-manages another 10,000 units in a total of 20 markets across the country.

Woodward, 40, has always had a penchant for fixing things. His first big project: A red 1962 Alfa Romeo Giulietta Spider convertible he bought when he was 15 years old. “My first car was literally in mothballs, all covered up in a garage with the wheels missing,” he recalls with a chuckle. “I fixed it up, got it painted, got the engine working, and that was my car all through high school.”

Though Woodward has upgraded his wheels over the years—he now drives a fully accessorized Land Rover—he still loves a good challenge. That's why, in 2000, he traded the security of a senior vice president title at Archstone-Smith for a chance to rebuild a promising company. (Prior to his seven-year stint at Archstone, Woodward was one of the first employees of Security Capital Group.) Why make the audacious move? “Building a culture, hiring people, putting systems in place, and leveraging technology is exciting. And you can tell I get all ‘nerd-ed out' about this stuff,” he explains with a smile.

From day one at Laramar, Woodward was tasked with solving a major problem: Rebuild the company into an organization with the professionalism, structure, and systems of a large REIT but without the slow decision-making and layers of bureaucracy. During the past seven years, he has done just that. Woodward moved the company's headquarters from Chicago to outside Denver, hired a senior- and middle-management team—several who he wooed from industry titans such as Archstone and Equity Residential—and implemented a host of new policies and programs, many of which he originally developed and executed during the early days of Archstone.

These detailed programs, which range from an in-house employee training program called Laramar University to a recently launched revenue-management system, are at the heart of the company's success, says Woodward, who loves lists and is known for his extreme attention to detail. To say he's organized is an understatement; not a piece of paper is out of order on his large, walnut desk, and he even sorts his home pantry by sweet and savory foods. Woodward channels this energy into improving the company's operations and profitability, and he constantly solicits ideas from all levels within the firm.

“Feedback is key to the whole culture here,” says Tom Klaess, senior vice president of operations. During Woodward's frequent on-site visits, he won't leave until the employees give him one thing the company can improve upon, Klaess adds. This strategy, coupled with Woodward's infectious enthusiasm, works. “You hear Dave speak, you see the sparkle in his eye, and you can't help but be engaged,” says Erin R. DiPaola, vice president of multifamily investments for Transwestern Investment Co., a Chicago-based real estate investment firm with 1,226 units fee-managed by Laramar. “His enthusiasm, given how long he has been in the business, is really inspiring and refreshing.”

Indeed, when Woodward stops at a property, he often does more than the standard CEO's 5-minute power walk through the leasing office and clubhouse. His favorite way to spend an afternoon? Grabbing lunch with all of the on-site employees at a newly acquired property and sharing what he dubs the “Laramar story.” In fact, he's explained how the company works and where it's headed so often that colleagues often tease him about it. “One of the best things about Dave is his communication style,” Klaess says. “He gets a lot of grief because you hear the same story over and over again, but it's really great because people feel like they are important enough for the CEO to take time and explain exactly what we are doing with programs and initiatives.”

LARAMAR COMMUNITIES Founded: 1989 Headquarters: Greenwood Village, Colo. Employees: 500 2006 Revenue: $200 million Units Owned and/or Managed: 20,000 Geographic Coverage: Nationwide, with strongholds in Chicago, Minneapolis, Tampa, Fla., Atlanta, Dallas, and Houston (for both owned and fee-managed units)

Mention the word “fund” to Laramar employees, and their eyes immediately light up. Woodward is no exception. His passion is undeniable as he talks about his latest, and perhaps greatest, fix: finding a way to efficiently raise capital that will fuel the company's growth. Since Laramar was founded in 1989, the firm has sought capital for acquisitions from a steady group of investors on a deal-by-deal basis—typically a slow and inefficient financing method. Two years ago, just as the company started its major disposition program, the senior management team decided it was also the right time to raise its first capital fund.

Woodward, along with president Jeff Elowe and executive vice president Keith Harris, hit the road. The trio met with institutional investors in the United States and abroad with the goal of raising $250 million. The team exceeded its goal, raising $350 million with the help of its placement agent Credit Suisse. “Raising a fund is very difficult; if it was easy, everybody would be doing it,” Elowe says. “We were on the road every week for about a year.” The long days away from home paid off. The fund, when leveraged, has the buying power of $1.4 billion.

Laramar, now in full growth mode, has already invested approximately $100 million of the fund's equity with the purchase of eight apartment communities across the country, from Los Angeles to Washington, D.C. “I think the new Laramar fund is an excellent vehicle for the company to expand its relationships with significant institutional investors, which should put the company on a path for continued expansion in the years to come,” says Scot Sellers, chairman and CEO of Archstone-Smith, who worked with Woodward in the 1990s.

Woodward expects the majority of deals in the fund to match the prototypical value-add Laramar deal. The firm targets 300- to 350-unit, 1980s buildings in C to C+ condition located in B+ to A, supply-constrained markets. Laramar renovates the properties and elevates them to Class B communities, with an average hold period of four to five years. “It's the dog on the block,” Woodward says. “It's the deal that is run down because the owner didn't put money into it or they managed it poorly. It's always competitive to find deals but [recently] even more so because more and more people [got] into this space.”

Problem solved. The new capital-raising strategy gives Laramar a huge competitive edge, since they can buy and close a deal in about half the time as in the past. Now, the money is ready to go. “Speed of execution is important today as it's a highly competitive environment,” says Jeffrey Allen, president of San Juan Capistrano, Calif.-based J.B. Allen Realty, who also worked with Woodward in the '90s. “Laramar can spend its time focusing on the due diligence necessary to pull the trigger on any given acquisition.”

Dave Woodward checks on the renovation status of The Mont Clare Apartments in Chicago.

Once the company has invested the fund money, which it plans to do within the next two to three years, it will move on to its second fund. Laramar's strategic plan is to raise a series of funds over the next two decades, Woodward explains. “At any point in time, we will have two, three, four funds in the various stages of their life cycle, ramping up, ramping down, and overlapping,” he says, swiftly and confidently sketching the company's 20-year future with a series of overlapping curves on scratch paper.

To the employees, the fund represents a future of financial stability. “The fund provides Laramar with financial security and also entices great people to come from bigger organizations,” says Mary Rogers, a regional manager at Laramar who recently joined the firm after several years spent working at Archstone and Equity Residential. “While we are private and small and don't want to be one of the Equitys of the world, the fund is growth for us; it's stability.”

Woodward certainly has a knack for seeing the big picture, but he also remains focused on constantly improving the company's day-to-day operations. “That's one of the reasons I came to work for him,” says Klaess, who previously worked for Archstone. “He is always looking for new ways of doing things that are going to make it easier for us to run our business.”

Woodward often looks outside the apartment industry for fresh, innovative ideas and smart business practices that solve everyday challenges. For instance, the company is implementing a virtual “dashboard,” a concept Woodward spotted in a BusinessWeek article that will assist his mid- and senior-level management team. The Web-based tool is popular in manufacturing industries and displays all the important information an executive needs in one quick glance. Critical, real-time company data is displayed in easy-to-read graphics, much like the instrument panel in a car.

“I don't know of any apartment company doing this yet,” Woodward says. That may change after this article, but the CEO isn't concerned. He's always willing to share his ideas and push the multifamily industry ahead. But he also knows that by the time other companies test and implement their programs, Laramar will be a step ahead, working on its next great idea.

Laramar borrows many of its initiatives from the retail sector, which offers a natural synergy with the customer-focused apartment business. To keep and attract first-class leasing agents, the company was one of the first in the industry to switch to a commission-based payment method typical in most sales industries. As is commonly the case, the impetus behind the idea began with a conversation between Woodward and an on-site associate. Sales associates (they're no longer called leasing consultants) still receive an hourly wage, but they are now paid a much larger percentage of their total compensation in commissions. “We are creating a career in apartment sales that doesn't exist in the apartment industry.”

Sometimes the ideas are as simple as implementing an 800 number to track resident complaints—another idea borrowed from a retail store. The process is easy and inexpensive: Residents call the number with complaints, and a receptionist at the corporate office retrieves and transcribes the messages. The information is then e-mailed to regional and community managers who have 24 hours to respond to the inquiries. The ever-involved Woodward goes one step further and reviews a hard copy of all the memos each week, jotting handwritten suggestions to the managers. One such note: “Did you tell the resident who plans to move about our relocation program?”

Woodward looks to his on-site staff for fresh ideas to improve the company's operations.

And who knows? It might be just that kind of attention that helps Woodward discover the next big problem to fix.

LEADERSHIP LESSONS: DAVE WOODWARD

• Age: 40
• First Job: Real estate analyst for a syndication firm in California in the '80s.
• Favorite Quote: “Far and away, the best prize that life has to offer is the chance to work hard at work worth doing.” —Theodore Roosevelt
• Favorite Book:The Fountainhead by Ayn Rand
• Best Business Decision: Focus our company on a few key areas and do them exceptionally well.
• Greatest Challenge: Continuously making everyone aware of the long-term vision while making sure short- and medium-term goals are being achieved.
• Best Advice Someone Gave You: You can learn how an entire organization operates from any position within the organization by observing every detail and asking a lot of questions.
• Person You Most Admire: Benjamin Franklin
• Hobbies: Triathlon, snowboarding, history, classic cars

HIGH HONORS

As MULTIFAMILY EXECUTIVE's 2007 Executive of the Year, Dave Woodward joins an inspiring crowd. Past winners include:

• 2006: Ron Ratner, Forest City Residential
• 2005: Tom Bozzuto, The Bozzuto Group
• 2004: Steven LeBlanc, Summit Properties
• 2003: George S. Quay, Village Green Cos.
• 2002: H. Eric Bolton, Mid-America Apartment Communities

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  Living It Up

  Dave Woodward shows his staff a good time.

  If you ever walk past Dave Woodward's office be careful as you just might get hit with a Nerf ball launched from the CEO's extensive Nerf gun collection. Laramar Communities' Woodward undoubtedly works hard, but he also knows how to kick back and enjoy life.

  “He has a wonderful sense of humor,” says Mary Rogers, a regional manager for Laramar, who recalls a classic Dave moment when he playfully tossed lemons at a colleague.

  Woodward's playful antics are a big hit with his employees, who also view their boss as a friend. He says hi to everyone he passes as he walks down the hall and frequently pops in and out of offices for a friendly chat. “When Dave is here, the whole attitude of the place lifts because he always stops in and sees everyone,” says Scott McMillan, Laramar's controller.

  

  The annual Thanksgiving turkey bowl is a big hit among employees. It's just one way Laramar staff kick back.

  And truly, there's never a dull moment at the Greenwood Village, Colo., headquarters. On the last Friday of each month, the staff participates in a hole-in-one golf competition (right in the hallway) to win a bonus vacation day. And in the fall, employees try their hand at the annual Thanksgiving turkey bowl, where they get two chances to heave a frozen turkey down the hallway and knock over a giant pyramid of holiday-themed canned food. On rainy days, employees just might be lucky enough to get a special e-mail from Woodward with a pop quiz on Laramar trivia. The winners claim their prizes—typically Laramar logo products—in the CEO's office. Watch out for flying Nerf balls.