Keith T Jones: and here's the interesting thing where typically the beginning of the year we all know It's winter and occupancy is kinda sink down
Rory Anderson: Mm.
Keith T Jones: starting in the fourth quarter, going to the first quarter. We did not experience that for the first time, I think ever. Our average portfolio, our average occupancy was like ninety-eight percent.
Rory Anderson: Wow.
Keith T Jones: And so and it and it has stayed that way, Rory.
Rory Anderson: Welcome back to the Property Playbook, the property management podcast that unlocks leadership lessons from experts in the trenches of multifamily. I am super excited to announce that you can now watch, yes, I said watch, full episodes of the Property Playbook on Apple Podcasts. So if you want to get the full experience, feel free to join us on Apple. Now, I actually have to like Pay attention to changing my shirt every time I record now, which I know is is gonna be a problem for me. So, but we are so excited about that feature. We're also still available on most podcast platforms, including Spotify, Deezer, iHeartRadio, and others. But if you want to see us, you gotta go to Apple. Now, today's episode is going to be something that I think many people are talking about, but a lot of companies are still trying. To figure it out. And I'm really excited to discuss this topic with two special guests today because they are literally in the middle of this transformation right now and are seeing the benefits. Centralization has become one of the biggest conversations in multifamily operations. But beyond this as a buzzword, there are really some important questions like what should actually be centralized? What shouldn't? Does it create a better experience for our teams and the residents? And most importantly for owners, does it actually Improve NOI. So today I'm joined by two leaders from Oakwood Management Company who, like I said, have been in the trenches of putting centralized operations into practice. Keith Jones, president and CEO of Oakwood Management in Columbus, Ohio, brings three decades of experience managing real estate assets, investor capital, and acquisitions. He's a Gulf War veteran, so thank you for your service, Keith. And has held leadership roles with organizations including NISOURCE, Security Capital Group, and Case and Associates. And he's managed growth across markets throughout Texas, New Mexico, Arizona, and Ohio. He has an extensive experience. He's also been deeply involved in the multifamily industry throughout his career and holds an MBA along with several industry designations, including CAM and CPM. Joining him today is Kara Thompson, Vice President of Operations at Oakwood Management Company. She has more than 20 years of multifamily experience and has worked in nearly every role along the way. Today she oversees Oakwood's core property management systems, operational technology, and team member support. And she's played an integral role in building and advancing Oakwood's centralized approach to property management. She is the pro. So what I'm especially excited about today is that we're not going to talk about centralization in theory. We're going to get into what Oakwood has actually experienced, where they've found efficiencies, how centralization has changed on-site staffing, which KPIs they use to measure success, and where the model might go too far, whether or not they can draw a measurable line from centralization all the way to property level NOI, which I'm super excited about hearing. So whether you're an owner, an operator, a regional manager or even an on-site leader trying to figure out what centralized operations could actually look like for your organization, I think you're gonna get a lot out of this conversation. Keith and Kara, so excited. Welcome to the Property Playbook.
Keith T Jones: Thank you for having
Kara: Thank you, Rory.
Keith T Jones: us.
Rory Anderson: So, so happy to have you guys. I want to start with you guys have a lot of experience, right? So I want to start with a crazy, unusual experience you've had in your life. What did it teach you about leadership and property management and how did you handle it? Kara, why don't you go first?
Kara: Sure. yeah, 30 years in this industry. the one crazy, crazy story that that still haunts me today is I I was covering for a property manager and I was actually walking move outs and I came upon a domestic violence situation. I saw a gentleman run out of the window and I could hear a baby crying and I could hear a young girl screaming and I Literally was the unit that I was gonna go in and a walk. So luckily I had my cell phone and I called nine one and the cop on the phone kept me on the phone. He could hear the noise and everything. And I stood outside and he kept asking me questions and then then the gentleman came back from behind me and had a gun and pulled the gun on me and I'm informing the police officer as I'm just Taking deep breaths. but I was more worried about the resident and the little baby I could hear crying. And so I kept it together. the guy ran off finally. The cop talked to me until I got back to the office. I went into my office, shut the door, because at this time no one else knew what was going on, and the tears just started falling.
Rory Anderson: yeah.
Kara: I 'Cause I had realized, you know, he had a gun on me and I was still like, get off this property, you know. So
Rory Anderson: I don't know what to do.
Kara: then I got it together and called my boss and brought the team in and explained to them what had happened and that we're on lockdown right now until they find him. So it was crazy.
Rory Anderson: What did you what did you learn from that? What did you take from that? That is a crazy experience.
Kara: It is. I guess just you never know in that fight or flight moment how you're going to react. And here I am, four eleven, telling this guy to get off the property as he's holding his gun to me and going in to check on the girl that was in the unit. you know, that I was strong, stronger than I ever thought I could be, and that it's it's okay, and then you can break down in private.
Rory Anderson: Yes. And you need to, you need to have those moments, right? Of just kind of like release. But
Kara: Right. Yeah.
Rory Anderson: in the moment you have to be the strong one. And that's hard. I mean, this is a hard industry. And and I think it's important to share these stories because I think it helps people realize you are doing amazing things. You're asked to do amazing things and you're stronger than you think.
Kara: Agreed.
Rory Anderson: Keith, what about you? You got anything you got any crazy stories to tell us?
Keith T Jones: Yeah, I joined in. Not
Rory Anderson: Ha ha
Keith T Jones: as crazy as Carol's story with having to to go to work at Gunpoint.
Rory Anderson: Yeah.
Keith T Jones: but that was a time when I was working for another company. We was taking over a property in Albuquerque, New Mexico. The day we were taking over the property, I was traveling in to the city 'cause I didn't live there. And my team was already on the ground there and they were exp working with and experiencing a a a suicide that had just taken place. And by the time I got there, they we got a phone call from a family that was asking the management team to do a wellness check on their mother. So we sent one of the team members to do the wellness check and found that the their mother had expired and and a few minutes after that on this same property while all this is going on, we hear gunshots at the rear of the property where someone else had just been shot. Mind you, this was not in a bad neighborhood. This was just it was just a a freak day, I guess, but all of this going on at the same time,
Rory Anderson: Well.
Keith T Jones: on one particular property. So
Rory Anderson: What did you what did you take from that or learn learn from that?
Keith T Jones: I think one of the things which I kind of knew at the time that being in property management, you're dealing with one of the hierarchy of needs, and that's shelter, and that's people's lives. And so in that moment, you're dealing this these are real life scenarios all happening at the same time. They just happen to be tragic. scenarios, but being able to be flexible, being able to go from dealing with the police to being able to comfort a family who was not there, how do you break that news to them? Media is is is now crawling all over the property, having to deal with that. And so jumping in and out of a mental role all within a span of minutes teaches you how to be flexible. So
Rory Anderson: for sure. And I think it teaches you too that you need to s you need to be the calm one because you are oftentimes the person that people are looking to for direction when the chaos happens at the property. They look to you whether whether or not it really involves your job, they still look to you. I mean, like and what I mean by that is you know, your your job is not to necessarily console somebody or or work with the police, but that it sometimes that happens, right?
Kara: Okay.
Rory Anderson: And so they look to you in in many instances and you've gotta be that level headed one that kinda can walk people b on both sides through the process.
Keith T Jones: You're exactly right.
Rory Anderson: Yeah. Well, thank you for sharing those stories. I'm excited to jump into centralization. So Kara, tell me a little bit about this buzzword because when people in multifamily hear centralized operations, right, it can mean a dozen different things. So what does that look like at Oakwood today?
Kara: You're right. I think the first thought everyone thought in centralization is that we're pulling decision making away from this on-site teams. but truly it's about removing the repeatable work away from them. So our on-site teams can focus on residents and the prospects instead of being buried in paperwork. And a good example is that is we build a process operations team who centralizes resident accounts, property accounting across Our whole portfolio, it's where our on-site teams can be more dedicated. and these specialized groups are helping complete the buried paperwork, the application process, the soda, the renewals, the invoicing. and the I think the the piece that people meet miss with centralization is that it truly is meant to empower the on-site teams. The people are actually. Living the resident experience every day instead of trying to handle procurement and going through, you know, paperwork after paperwork.
Rory Anderson: Good. So what what problem were you really trying to solve originally by centralizing? Was it more apparel, staffing shortages, consistency, leasing performance, resident experience? Like tell me a little bit about what you were trying to solve.
Kara: Sure, I think what first for me in my operations position, I was dealing a lot with the site teams in fraud detection, with
Rory Anderson: Mm.
Kara: the application process. And, you know, they they're not underwriters. We didn't we had a credit background company, but didn't have much details to find these fraudulent applicants. And we were, you know, it was fake IDs, it was fake offer letters, and our people weren't set up to You know, detect that. So they were coming to me and I started creating a a list because we would see these people apply three and four different properties. What I noticed was that it's taking us three to four days to get each and every person approved because we were so skeptical or had so much to jump through, and I started researching other solutions that would take that off the properties
Rory Anderson: Hm.
Kara: and off the staff, and talking to those companies, they then introduced me to other companies who were centralizing because we're centralizing the application process. And so that was the first program we brought on was to remove that off the site teams. you know, and it it it took some time to build and work out the glitches, but you know, now our site teams were getting applications approved in five hours. You know, it's
Rory Anderson: Mm.
Kara: detecting that, you know, whereas our people aren't having to go chase pay stubs and so that's where it all started. And that was our first problem that I think spurred me on to say, Yeah, I think this is something we need to we need to move forward on.
Rory Anderson: That's awesome. I love that. Do you do you have other functions now that you've successfully centralized? And like maybe tell me what as a follow up to that, what have you deliberately kept at the property? Cause you're like, no, this needs to stay at the property, but this is more efficient elsewhere.
Kara: Yeah, so we've definitely kept the move out, pre-move out walks and move out inspections on the property. So the property manager and the maintenance supervisor still do those. it's all automated in our maintenance IQ programs. So they literally, while they're walking, can take the photos of the damages and it computes it all. And then the process operations teams processes that move out soda. So again, the site teams can focus on. residents and the leasing and prospects. the other thing we've kept deliberately at the property is our rock star salespeople, right? We want them front and focused for everybody that walks through the door. we can't remove that human element of it. Yes, we've put in self-guided tours for those who want to go after hours, but you still need that human touch element. And so that we've definitely kept at the site level.
Rory Anderson: That's great. Keith, anything you want to add to that?
Keith T Jones: No, I think she did a great job at it at explaining it and I and and yeah, we when we looked at it, we wanted to figure out a way to remove those process oriented tasks and get it away from the folks on property so that they can do what they do best. You know, typically management companies they hire leasing consultants because they have a great personality. have the ability f for sales, but we all know that that's a special type person and they may
Rory Anderson: Mm.
Keith T Jones: or may not be experts at doing process type work. And so but heretofore, generation after generation, we've we've we've laid that on those type people to say, well, you know, you're a great leaser, but we yeah, you also need to do this paperwork and you need to do it right. And so
Rory Anderson: Mm-hmm.
Keith T Jones: removing that from them and freeing them up to really do what they they are inherently good at, I think has helped us out tremendously.
Rory Anderson: that's great. So where have you seen, Keith, the biggest efficiency gains w ha in this centralization process? Has it been leasing, renewals, collections, you know, admin work w or maybe somewhere that you didn't expect?
Keith T Jones: Well, I think a little bit across the the entire spectrum, especially with the admin work. When you have a portfolio the size of of Oakwood, fourteen thousand, and you have several properties, and I think a lot of management companies can can understand what I'm saying when I say that. No matter how hard you try to implement a system. somehow from one property to another, that system changes. And right.
Rory Anderson: Yes. It's the age old problem of scaling for any business, yes.
Keith T Jones: Right. Exactly. And so administratively, when you have a department that's doing it the same way and doing it at the same time every month, then now you you you you start to s you will start to see efficiencies and proficiencies increase. So we've definitely seen that with our centralization department. And some of the other things, some of our KPIs, which I'm sure we'll talk about later that that we track, we've seen some significant gains there as well. So
Rory Anderson: That's great. Has centralization how do I ask this question? Has centralization changed the way you staff your staffing model at the property? And I this it can be a touchy subject, right? Because sometimes when people hear centralization and they're on the ground, they're like, Whoa, is my job in jeopardy? Am I
Kara: Okay.
Rory Anderson: gonna get fired? Right. So you have to be careful with this question. But help me understand that from a business perspective, what that has looked like, Keith.
Keith T Jones: Yeah. yes, it has changed the way we operate on site. we all know that that the Pretty much a rule of thumb in property management that you're taught is that there should be one person per 100. And so we here at Oakwood, we wanted to challenge that and and see if we could reduce that by half. And let's say, can we go to one per 200 but take take some some modest steps to get there. So we so we so we rolled out our first iteration which is one per 150. and that did cause a a staff reduction and and was still in that iteration by the way. And so that layer if you have a property that has an assistant manager that particular layer was pretty much relocated to our centralization department because that that assistant manager is the person that always was stuck doing the paperwork
Rory Anderson: Mm.
Keith T Jones: on any problem. They were stuck doing the paperwork, right?
Rory Anderson: Yeah.
Keith T Jones: And so no matter how much we want that person to get out and and and lease apartments or help with renewals or whatever, it's just so much they they're stuck in that office during the churn. So when we removed that, we definitely eliminated the position. But one of the things that we also did though here is that we created another multi-site layer. We had regional managers that was overseeing a pretty nice size portfolio And so we had managers that will would be in their manager role and then hopefully one day become a regional. One of the things, through our post surveys, we found out that managers were getting a little bit disgruntled because they said, well, there's only so many regional manager roles, and I feel like I'm stuck.
Rory Anderson: Right.
Keith T Jones: So we created this area manager role that would take on smaller portions of the portfolio within a particular region. And so now it created another level of advancement for those who wanted to make a career out of this. But it allowed us to not have that salary resting all on one particular property, but across multiple properties. So.
Rory Anderson: Hm, I that's interesting. Kara, how have you seen that work and and what's your opinion on this as far as what it's done for employee morale?
Kara: Yeah, I mean I think that's what we kept hearing is you know, leasing people get stuck, you know, what's their next advancement? How long does it take for me to become a property manager? And then the property manager said same thing, you know, when regionals never leave.
Rory Anderson: Mm.
Kara: when am I ever going to be able to get that? So with centralization, we were able to create two new positions, which property manager pretty much we did away with. But you could become an area manager where you see over one, two, three sites, depending on unit size, and more responsibility. Obviously, you're managing two teams. And we took a long time to look at our current people and really, really try and find those leaders that were, you know, one step away from being a regional manager. And then
Rory Anderson: Okay.
Kara: we noticed that we had some leasing people out there that were really eager and supporting their area manager. Maybe the area manager wasn't there that day, they were at the other property. And really showed a sense of helping out and wanting to grow and taking initiative to walk units. And so then we created the leasing manager position. So the morale, the team, the staff loved it. They're like, my gosh, there's growth, there's opportunity. I don't have to wait five years to become a a property manager.
Rory Anderson: Mm.
Kara: So and it was just great to see. I think when your peers, when you see your peers get promoted or get that new title, then it's like, well, I wanna be a L E see manager too. So so it's been positive.
Rory Anderson: Yeah. That's great. That's awesome. That's good feedback. What have you learned, Kara, that simply doesn't centralize well? And you're like, we we either you made the mistake of trying to centralize it and went back, or you just have realized this isn't gonna work.
Kara: I think probably the one thing that I didn't worry is we may have chosen an area manager and given them too big of a property. I think we think it's the same seat as a property manager and an area manager, but we did realize that some people just weren't weren't ready to oversee multiple staff or
Rory Anderson: Mm.
Kara: felt a little frazzled because yes, they ran their property perfectly. But wait, now I'm taking on this other one. It's different. properties of personalities. So
Rory Anderson: Yes.
Kara: I think we had, you know, we had to jump some hurdles there and figure it out. but I think that the person knew too. I I guess I'm not ready for this. So I think really that was the only real hurdle we ran into is maybe placing the right people to do it.
Rory Anderson: Okay, thank you for sharing that. you know, Keith, one argument for centralization that I've heard is that specialists can outp perform a general list. Have you found that to be true? And give maybe give me an example.
Keith T Jones: Yeah, I think a specialist can outperform a generalist, but I don't think that that is a bad thing because you place the specialist in the in their specialization. So
Rory Anderson: Mm-hmm.
Keith T Jones: For us, we have our centralization department and they work in in teams. They're taking on this process work, so they're specializing in it. And so if we have leasing people their specialization is to lease apartments, they really don't want to be bothered with all of the other paperwork. So we put them in their specialization. So it works out to be a perfect marriage. And so I think it's a great thing.
Rory Anderson: That's interesting. I I've always loved this thought that it's really fun to be good at something. Like when you're really good at something, it's fun and it's you enjoy it. So I think
Keith T Jones: Right.
Rory Anderson: what I'm hearing from you is that this has given the people that are good at their specific jobs that opportunity to just flourish and thrive in those areas that they're they're already kind of prone to being good at.
Keith T Jones: Right. The and the interest the interesting thing is, Rory we did not hire anyone for the from the outside for our centralization department. They all came from on site. So these
Rory Anderson: Mm-hmm.
Keith T Jones: were people that were on site that said, you know what, I I like doing paperwork. I think I'm better at it. So this opportunity has come up. Let me go and work in the centralization department.
Rory Anderson: Yeah, that's awesome. Kara anything to add there?
Kara: no, I mean totally agree. I think it's always been known that you're you can be good at sales and not paperwork, but it's very hard to find the person that's good at both. and we we really did. We found, you know, our rock star leasing people that said, No, I I'm a people person day in and day out and
Rory Anderson: Yeah.
Kara: other people are like, Nope, just get me in front of a computer and I'll process all day.
Rory Anderson: I love that. That's that's great. That's it's you need that. You need that variation. So, you know, I Keith, at the end of the day, you as the owner of the company, you know that owners of the properties care about NOI. So can you now draw a measurable line between centralization and improved property level NOI?
Keith T Jones: Yes. a couple things that a couple things that we track that that we talked about when we first started this was salaries. That's always the big elephant in the room. And so today from twenty twenty from t comparing twenty twenty six year to date to 2024, because we we really started ramping up during 2025 and starting it, we've seen a 17% decrease in our in our payroll across the entire portfolio. And that's just year to date. And so we it's gonna we estimate probably by the end of the year is going to be 2025. And that is a direct hit to the NOI line.
Rory Anderson: Is that on the property level you mean? The property level NOI? Okay.
Keith T Jones: On the property level. Right. On the property level. And so we also track other things that is showing up in a lot of different ways. such as our conversion ratio. we're our goal is For our conversion, a tour conversion, when someone comes on site, we want to convert that 40% of the time. Prior to centralization, we were averaging the low 30s. Today, we are are above 40%. So we hit our goal. We have 41% actually.
Rory Anderson: Well.
Keith T Jones: Our lead conversions, which which when we captured them from online and getting them all the way to at least our goal was fifteen percent and prior to centralization it was in single digits today is seventeen percent and here's the interesting thing where typically the beginning of the year we all know It's winter and occupancy is kinda sink down
Rory Anderson: Mm.
Keith T Jones: starting in the fourth quarter, going to the first quarter. We did not experience that for the first time, I think ever. Our average portfolio, our average occupancy was like ninety-eight percent.
Rory Anderson: Wow.
Keith T Jones: And so and it and it has stayed that way, Rory. even until today. And
Rory Anderson: Wow.
Keith T Jones: so so that translate we've seen a uptick in gross revenues. in a double digits, when I say double digits, we're averaging twelve point five. And so that's translated into higher NOIs as well. So all of these all of these things moving inside the engine has caused us to see double digit increases since the end of twenty twenty four to now in the average NOI percentage.
Rory Anderson: That's great.
Keith T Jones: Yeah.
Rory Anderson: That's amazing. Kara, anything to add to that? Any other KPIs that you've been tracking?
Kara: I think primarily that's what my focus is on is closing ratios. 'cause I wanted to see are people actually spending more time renewal
Rory Anderson: Yeah.
Kara: rates? You know, is it truly working on that end? So, and it has. I mean, it's been amazing how we've continued with the competition in Ohio, that we have continued to remain at a great occupancy. So I'm gonna give it credit to the centralization standard and the site teams.
Rory Anderson: Interesting that you're seeing those things. Keith, where where do you think centralization can go too far? Like at what point does efficiency start hurting maybe the resident experience or like a disconnection
Keith T Jones: The moment.
Rory Anderson: from the on-site team? Tell me about that.
Keith T Jones: I think two things and this was for us, right? I th one is I think you have to be careful today about being too quick to roll out technology and thinking that it's going to replace human interaction. we're still finding that human interaction plays a big role. in property management. There's all sorts of things with AI and things we can do today. We all know it, we hear it, we go to the conferences and we all know that. But what we found is that that touch is still still very important. So we decided not to make wholesale investments too fast into it, but more kind of steady investments in the things that would help us bolster our model that's in place. The second thing is the one thing that we did not centralize a hundred percent was our maintenance. And so because we are very cognizance of our response times, again, our interaction with our residents. And so we we did prior to rolling out this massive centralization model, we did kind of centralize our on-call to kind of help our guys to kind of share the load. But we still have a full maintenance staff on each one of our properties so that we can respond, we can communicate, and we can take care of those problems because th when those residents are happy, they tend to stay longer. And the number one complaint on a property is gonna be along the lines of something dealing with maintenance. So we have been very,
Rory Anderson: You're right.
Keith T Jones: very we have been very, very reserve about not trying to force that end of it. So
Rory Anderson: Very smart, very smart. So, Keith, if another management company wanted to centralize tomorrow, what would you tell them maybe to centralize or not to centralize first? What would be your advice there?
Keith T Jones: Going back to my previous study on previous question, I would definitely tell them to look hard at any process-oriented work that you have. while process-oriented work has to be done, it really does not, it it it doesn't create income, right? it it keeps you from being sued. So I guess that's a that's a way of of protecting income but it income but it doesn't create income. So that's one area that I would tell them tell them to look at and then I would tell them to be cautious with trying to centralize maintenance and I know that that's a hard thing to do because the cost of maintenance just keep going up, up and up on us
Rory Anderson: Mm-hmm.
Keith T Jones: and so some companies have are doing it and are and are trying to do it. My hat's off to them, but we just found that that's a area that we wanted to be cautious in because again those are the folks that really are connected to the residents on the property every single day.
Rory Anderson: I really appreciate that you're willing to share that and kind of like open up, pull back the curtain a little bit for other people that are looking into this. I think your experience is v really valuable. Keith and well, we'll do Keith and then Kara. I w I wanna give you a scenario. If I gave you two identical two hundred unit apartment communities, one traditionally staffed, one using Oakwood centralized model. Where specifically would I see the financial difference after twelve months? What would you say? Keith, go first and then we'll have care answer.
Keith T Jones: 12 months, you're definitely gonna see a reduction in in in on salaries.
Rory Anderson: Okay.
Keith T Jones: You're definitely gonna see that, which is, you know, that's a that's a big, you know, that's a big expense line. Number two, you're gonna start to see gains in in other areas that's gonna translate into your NOI, such as you're gonna see renewal percentages increase, you're gonna
Rory Anderson: Mm.
Keith T Jones: see closing ratios increase. So now you're gonna have a property that's gonna be operating at a higher occupancy and it's going to hopefully remain at a higher occupancy and not have these these these swings
Rory Anderson: Fluctuations.
Keith T Jones: or fluctuations. throughout the year, which again is gonna translate into a higher NOI.
Rory Anderson: Mm. Really interesting. Kara, what are your thoughts?
Kara: exactly. totally agree. And I I think the other thing is with Oakwoid and our large portfolio, people wonder does it work the same for a class A, B, or C? Is it because we have all
Rory Anderson: Yeah.
Kara: of those. and it does. I mean we know the day-to-day doesn't go away whether you're an A, B, or C. that work is happening daily regardless of the asset type. so
Rory Anderson: Right.
Kara: again, the administrative portion taking that off. that consistency, actually the strength of centralization. It doesn't it doesn't discriminate by asset class because the work itself doesn't either. So, 'cause I was I was worried about that. We have some small properties and I wondered. But
Rory Anderson: Mm.
Kara: yeah, they're thriving and Doing well.
Rory Anderson: That's awesome. What is there anything else that you that you would either one of you want to share about this experience or what Oakwood's experience has been, or anything that you've learned? Anything else that we haven't covered yet?
Keith T Jones: I think if a company is really seriously thinking about doing this, one of the things that we did was we put together a steering committee in the beginning before we launched anything. And we sat around and we brainstormed and we talked about it. We even invited in a change management expert to help walk us through some things. And this steering committee was comprised of people in corporate and on-site. because we had to understand, right, as we make changes, how would those changes affect corporate and affect on-site and vice versa.
Rory Anderson: Mm.
Keith T Jones: And so it gave us a playbook, no pun intended, going forward. to to start and even with that we are still tweaking it because we are just a little bit over a year into this and so we're still tweaking things but we were mer we we were much f further ahead towards the goal line by having this steering committee with w when when we have people that are actually touching the work saying, Hey, have you thought about this, have you thought about that? And and l and incorporating that into the entire plan.
Rory Anderson: I love that. And that creates buy in too when you're using on site people, right? And corporate people. You've got to work together 'cause you don't want anybody
Keith T Jones: Yeah, because you don't know
Rory Anderson: to feel left out or that their opinion wasn't considered.
Kara: Yes, agreed.
Rory Anderson: Hera?
Kara: I would say, you know, that's where I pride myself is thirty years in the industry, I started as a lease and I've I've been through every role and I don't ever want to forget that. So we may be brought on a new program and from our eyes, you know, the sales pitch, it looks amazing, it'll take care of it, but until it's actually rolled out and the site teams are using it day in and day out, you know, that was where you know I I would bring in the new area managers and you know, after about a month and get their feedback, what's working, what's not. 'cause we need we we assume that everything on our end looks good, but so they were very appreciative of that to say, hey, this isn't working or we need to tweak this. So we definitely do a great job of listening because we knew we didn't know this was gonna be a perfect answer. So I'd love that that Keith always sets us up with a team and a collaboration and we talk it through. We don't Just say do it.
Rory Anderson: I love that. That's so important in any organization. Let's you know, I've told you guys this is a leadership podcast. So I'll let you guys both answer, maybe Kara first and then Keith. What's a leadership principle you believe in and that you've tried to live by and tell me how that has helped you professionally or personally in your life?
Kara: yeah, I guess I feel I lead from experience. like I said, I've done I've been in this 30 years. I started as a leasing agent, I worked my way up, assistant, property manager. I was even a s special events coordinator at one time, regional manager, director of ops. you know. None of us ever really choose to go into this industry. I personally happened to go through a divorce and had a son and we had a home, we were selling. So I was out looking for a job and an apartment. and the girl was like, You have a great personality, you should start leasing. And here I am 30 years later. So I will say that's the one.
Rory Anderson: I love that story by the way. I love that. That's amazing. That's so f that's so f that I think a lot of people can can relate to that.
Kara: Exactly. Yeah. I mean who knew? but I guess that's where I I pride myself is, you know, I don't forget what it's like to be a leasing agent or a property manager that's dealing with a suicide or, you know.
Rory Anderson: Mm-hmm.
Kara: and I I think I've built that respect with my team. and they know that I'm I'm not the type of VP that you can't reach out to. I support them i in in any any position. I 'cause I know what it's like.
Rory Anderson: Yeah. Yeah, that's that's the empathy side of leadership, right? You've been there.
Kara: Right, exactly. Yeah.
Rory Anderson: Keith, what about you?
Keith T Jones: Like Kara, I started out as a leader consultant as well. But the one thing that I've learned that I kind of take pride in f as a leadership lesson is being able to perfect situational leadership. and there are there are no two days that are the same in property management. And so as a leader, you have to be able to dissect the the property that has its own personality the the team that's leading it and the leader has their own personality, their own, their own
Rory Anderson: Mm-hmm.
Keith T Jones: way they want to lead. And so learning how to to to lean into situational leadership and not being so rigid as is saying this this it I'm gonna roll out my leadership style across the entire company, but trying to get the best out of individuals based on their situation, which means the the properties are or regions that they're managing and who they are as a person. And last but not least, being a servant leader, we are here to serve those that are close to the work every single day.
Rory Anderson: Hmm, I love that. Well, Keith and Kara, thank you so much for joining me today. I'm gonna call you K Squared, Keith and Kara. Love it.
Kara: Okay.
Keith T Jones: Yes, okay.
Rory Anderson: You know, I think one of the biggest takeaways from this conversation for me is that centralization isn't simply about doing more with fewer people, which I think sometimes people think, right? But it's about being more intentional about where work gets done. And who is best equipped to do that work and how we free up our on-site teams to then focus on the things that truly require the human connection. And I think you guys have done a great job of of doing that and explaining that. And I'm sure it's been w not without a few bumps and bruises along the way. But ultimately that's the balance that every operator has to find. You know, we can centralize processes or specialize roles, leverage technology, we can try to reduce administrative work and hopefully improve NOI. But if we lose sight Of that resident experience or disconnect our on-site teams in the process, then that efficiency can can quickly become counterproductive. So I think that you've done a great job of explaining how you've had to balance that. I also appreciate that both of you brought this conversation back to measurement because centralization shouldn't just feel more efficient. We really need to be able to track and look at the KPIs, the staffing model, the operating expenses, like you talked about, and even the resident experience. And ultimately the financial performance of the property and determine whether it's actually working, right?
Keith T Jones: Yep. Yep.
Rory Anderson: Yeah. So Keith and Kara, thank you so much for sharing what Oakwood has learned along the way. I know it's gonna help a lot of people out there listening and for being willing to talk about both what works and where operators need to be careful. I think you guys have done a great job of covering your bases. On this show, we always like to do an unpaid ad at the end. So this is just Anything this is just kind of a fun thing that we do, but it's anything that you love, a brand you love or something that you like. I mean it can be really simple. or it can be something that you're like, I just can't live without this item, this thing. So do you guys have anything that you want to share for your for the unpaid ad?
Kara: what can I live without? one. I don't know.
Rory Anderson: You gotta have something. I'm sure you have something that you can't live without.
Kara: I mean my son. I have my son who's in the Coast Guard. I keep an eye on
Rory Anderson: Hey, you can
Kara: that all the time.
Rory Anderson: you could do Well, I'm sure he appreciates that.
Kara: Yeah.
Rory Anderson: Keith, what do you got? You got anything for us?
Keith T Jones: Yes. It it w it's it's not any th it's not a a
Kara: I know him.
Rory Anderson: Hey, it can be anything. We've had people say Diet Coke. Like I can't live without Diet Coke.
Keith T Jones: Well it's not a it's not a product.
Rory Anderson: Okay.
Keith T Jones: the thing that I can't live without that I would monitor people to lead into is I can't live without my faith. Right? I'm a faith driven person and I think in the world that we live in today People need to to to to lean into their lean into their faith and and and be able to have a a North Star and a compass that that that would guide them where they're trying to go. So to for me it's my faith.
Rory Anderson: I love that. And I am right there with you. My faith and my family, they're everything to me. And so I can completely relate. And I think a lot of people, I think most people listening
Keith T Jones: Mm-hmm.
Rory Anderson: can relate to that because we cannot do it alone in this life. We need we need that higher power. We need God on our side, and we can always do more with him. So I love that. Well, to our listeners, thank you for joining us for this special episode. Until next time, keep building great teams, keep leveling yourself up, and go be a light and a blessing to someone else.
Rory Anderson: Mm.
Keith T Jones: starting in the fourth quarter, going to the first quarter. We did not experience that for the first time, I think ever. Our average portfolio, our average occupancy was like ninety-eight percent.
Rory Anderson: Wow.
Keith T Jones: And so and it and it has stayed that way, Rory.
Rory Anderson: Welcome back to the Property Playbook, the property management podcast that unlocks leadership lessons from experts in the trenches of multifamily. I am super excited to announce that you can now watch, yes, I said watch, full episodes of the Property Playbook on Apple Podcasts. So if you want to get the full experience, feel free to join us on Apple. Now, I actually have to like Pay attention to changing my shirt every time I record now, which I know is is gonna be a problem for me. So, but we are so excited about that feature. We're also still available on most podcast platforms, including Spotify, Deezer, iHeartRadio, and others. But if you want to see us, you gotta go to Apple. Now, today's episode is going to be something that I think many people are talking about, but a lot of companies are still trying. To figure it out. And I'm really excited to discuss this topic with two special guests today because they are literally in the middle of this transformation right now and are seeing the benefits. Centralization has become one of the biggest conversations in multifamily operations. But beyond this as a buzzword, there are really some important questions like what should actually be centralized? What shouldn't? Does it create a better experience for our teams and the residents? And most importantly for owners, does it actually Improve NOI. So today I'm joined by two leaders from Oakwood Management Company who, like I said, have been in the trenches of putting centralized operations into practice. Keith Jones, president and CEO of Oakwood Management in Columbus, Ohio, brings three decades of experience managing real estate assets, investor capital, and acquisitions. He's a Gulf War veteran, so thank you for your service, Keith. And has held leadership roles with organizations including NISOURCE, Security Capital Group, and Case and Associates. And he's managed growth across markets throughout Texas, New Mexico, Arizona, and Ohio. He has an extensive experience. He's also been deeply involved in the multifamily industry throughout his career and holds an MBA along with several industry designations, including CAM and CPM. Joining him today is Kara Thompson, Vice President of Operations at Oakwood Management Company. She has more than 20 years of multifamily experience and has worked in nearly every role along the way. Today she oversees Oakwood's core property management systems, operational technology, and team member support. And she's played an integral role in building and advancing Oakwood's centralized approach to property management. She is the pro. So what I'm especially excited about today is that we're not going to talk about centralization in theory. We're going to get into what Oakwood has actually experienced, where they've found efficiencies, how centralization has changed on-site staffing, which KPIs they use to measure success, and where the model might go too far, whether or not they can draw a measurable line from centralization all the way to property level NOI, which I'm super excited about hearing. So whether you're an owner, an operator, a regional manager or even an on-site leader trying to figure out what centralized operations could actually look like for your organization, I think you're gonna get a lot out of this conversation. Keith and Kara, so excited. Welcome to the Property Playbook.
Keith T Jones: Thank you for having
Kara: Thank you, Rory.
Keith T Jones: us.
Rory Anderson: So, so happy to have you guys. I want to start with you guys have a lot of experience, right? So I want to start with a crazy, unusual experience you've had in your life. What did it teach you about leadership and property management and how did you handle it? Kara, why don't you go first?
Kara: Sure. yeah, 30 years in this industry. the one crazy, crazy story that that still haunts me today is I I was covering for a property manager and I was actually walking move outs and I came upon a domestic violence situation. I saw a gentleman run out of the window and I could hear a baby crying and I could hear a young girl screaming and I Literally was the unit that I was gonna go in and a walk. So luckily I had my cell phone and I called nine one and the cop on the phone kept me on the phone. He could hear the noise and everything. And I stood outside and he kept asking me questions and then then the gentleman came back from behind me and had a gun and pulled the gun on me and I'm informing the police officer as I'm just Taking deep breaths. but I was more worried about the resident and the little baby I could hear crying. And so I kept it together. the guy ran off finally. The cop talked to me until I got back to the office. I went into my office, shut the door, because at this time no one else knew what was going on, and the tears just started falling.
Rory Anderson: yeah.
Kara: I 'Cause I had realized, you know, he had a gun on me and I was still like, get off this property, you know. So
Rory Anderson: I don't know what to do.
Kara: then I got it together and called my boss and brought the team in and explained to them what had happened and that we're on lockdown right now until they find him. So it was crazy.
Rory Anderson: What did you what did you learn from that? What did you take from that? That is a crazy experience.
Kara: It is. I guess just you never know in that fight or flight moment how you're going to react. And here I am, four eleven, telling this guy to get off the property as he's holding his gun to me and going in to check on the girl that was in the unit. you know, that I was strong, stronger than I ever thought I could be, and that it's it's okay, and then you can break down in private.
Rory Anderson: Yes. And you need to, you need to have those moments, right? Of just kind of like release. But
Kara: Right. Yeah.
Rory Anderson: in the moment you have to be the strong one. And that's hard. I mean, this is a hard industry. And and I think it's important to share these stories because I think it helps people realize you are doing amazing things. You're asked to do amazing things and you're stronger than you think.
Kara: Agreed.
Rory Anderson: Keith, what about you? You got anything you got any crazy stories to tell us?
Keith T Jones: Yeah, I joined in. Not
Rory Anderson: Ha ha
Keith T Jones: as crazy as Carol's story with having to to go to work at Gunpoint.
Rory Anderson: Yeah.
Keith T Jones: but that was a time when I was working for another company. We was taking over a property in Albuquerque, New Mexico. The day we were taking over the property, I was traveling in to the city 'cause I didn't live there. And my team was already on the ground there and they were exp working with and experiencing a a a suicide that had just taken place. And by the time I got there, they we got a phone call from a family that was asking the management team to do a wellness check on their mother. So we sent one of the team members to do the wellness check and found that the their mother had expired and and a few minutes after that on this same property while all this is going on, we hear gunshots at the rear of the property where someone else had just been shot. Mind you, this was not in a bad neighborhood. This was just it was just a a freak day, I guess, but all of this going on at the same time,
Rory Anderson: Well.
Keith T Jones: on one particular property. So
Rory Anderson: What did you what did you take from that or learn learn from that?
Keith T Jones: I think one of the things which I kind of knew at the time that being in property management, you're dealing with one of the hierarchy of needs, and that's shelter, and that's people's lives. And so in that moment, you're dealing this these are real life scenarios all happening at the same time. They just happen to be tragic. scenarios, but being able to be flexible, being able to go from dealing with the police to being able to comfort a family who was not there, how do you break that news to them? Media is is is now crawling all over the property, having to deal with that. And so jumping in and out of a mental role all within a span of minutes teaches you how to be flexible. So
Rory Anderson: for sure. And I think it teaches you too that you need to s you need to be the calm one because you are oftentimes the person that people are looking to for direction when the chaos happens at the property. They look to you whether whether or not it really involves your job, they still look to you. I mean, like and what I mean by that is you know, your your job is not to necessarily console somebody or or work with the police, but that it sometimes that happens, right?
Kara: Okay.
Rory Anderson: And so they look to you in in many instances and you've gotta be that level headed one that kinda can walk people b on both sides through the process.
Keith T Jones: You're exactly right.
Rory Anderson: Yeah. Well, thank you for sharing those stories. I'm excited to jump into centralization. So Kara, tell me a little bit about this buzzword because when people in multifamily hear centralized operations, right, it can mean a dozen different things. So what does that look like at Oakwood today?
Kara: You're right. I think the first thought everyone thought in centralization is that we're pulling decision making away from this on-site teams. but truly it's about removing the repeatable work away from them. So our on-site teams can focus on residents and the prospects instead of being buried in paperwork. And a good example is that is we build a process operations team who centralizes resident accounts, property accounting across Our whole portfolio, it's where our on-site teams can be more dedicated. and these specialized groups are helping complete the buried paperwork, the application process, the soda, the renewals, the invoicing. and the I think the the piece that people meet miss with centralization is that it truly is meant to empower the on-site teams. The people are actually. Living the resident experience every day instead of trying to handle procurement and going through, you know, paperwork after paperwork.
Rory Anderson: Good. So what what problem were you really trying to solve originally by centralizing? Was it more apparel, staffing shortages, consistency, leasing performance, resident experience? Like tell me a little bit about what you were trying to solve.
Kara: Sure, I think what first for me in my operations position, I was dealing a lot with the site teams in fraud detection, with
Rory Anderson: Mm.
Kara: the application process. And, you know, they they're not underwriters. We didn't we had a credit background company, but didn't have much details to find these fraudulent applicants. And we were, you know, it was fake IDs, it was fake offer letters, and our people weren't set up to You know, detect that. So they were coming to me and I started creating a a list because we would see these people apply three and four different properties. What I noticed was that it's taking us three to four days to get each and every person approved because we were so skeptical or had so much to jump through, and I started researching other solutions that would take that off the properties
Rory Anderson: Hm.
Kara: and off the staff, and talking to those companies, they then introduced me to other companies who were centralizing because we're centralizing the application process. And so that was the first program we brought on was to remove that off the site teams. you know, and it it it took some time to build and work out the glitches, but you know, now our site teams were getting applications approved in five hours. You know, it's
Rory Anderson: Mm.
Kara: detecting that, you know, whereas our people aren't having to go chase pay stubs and so that's where it all started. And that was our first problem that I think spurred me on to say, Yeah, I think this is something we need to we need to move forward on.
Rory Anderson: That's awesome. I love that. Do you do you have other functions now that you've successfully centralized? And like maybe tell me what as a follow up to that, what have you deliberately kept at the property? Cause you're like, no, this needs to stay at the property, but this is more efficient elsewhere.
Kara: Yeah, so we've definitely kept the move out, pre-move out walks and move out inspections on the property. So the property manager and the maintenance supervisor still do those. it's all automated in our maintenance IQ programs. So they literally, while they're walking, can take the photos of the damages and it computes it all. And then the process operations teams processes that move out soda. So again, the site teams can focus on. residents and the leasing and prospects. the other thing we've kept deliberately at the property is our rock star salespeople, right? We want them front and focused for everybody that walks through the door. we can't remove that human element of it. Yes, we've put in self-guided tours for those who want to go after hours, but you still need that human touch element. And so that we've definitely kept at the site level.
Rory Anderson: That's great. Keith, anything you want to add to that?
Keith T Jones: No, I think she did a great job at it at explaining it and I and and yeah, we when we looked at it, we wanted to figure out a way to remove those process oriented tasks and get it away from the folks on property so that they can do what they do best. You know, typically management companies they hire leasing consultants because they have a great personality. have the ability f for sales, but we all know that that's a special type person and they may
Rory Anderson: Mm.
Keith T Jones: or may not be experts at doing process type work. And so but heretofore, generation after generation, we've we've we've laid that on those type people to say, well, you know, you're a great leaser, but we yeah, you also need to do this paperwork and you need to do it right. And so
Rory Anderson: Mm-hmm.
Keith T Jones: removing that from them and freeing them up to really do what they they are inherently good at, I think has helped us out tremendously.
Rory Anderson: that's great. So where have you seen, Keith, the biggest efficiency gains w ha in this centralization process? Has it been leasing, renewals, collections, you know, admin work w or maybe somewhere that you didn't expect?
Keith T Jones: Well, I think a little bit across the the entire spectrum, especially with the admin work. When you have a portfolio the size of of Oakwood, fourteen thousand, and you have several properties, and I think a lot of management companies can can understand what I'm saying when I say that. No matter how hard you try to implement a system. somehow from one property to another, that system changes. And right.
Rory Anderson: Yes. It's the age old problem of scaling for any business, yes.
Keith T Jones: Right. Exactly. And so administratively, when you have a department that's doing it the same way and doing it at the same time every month, then now you you you you start to s you will start to see efficiencies and proficiencies increase. So we've definitely seen that with our centralization department. And some of the other things, some of our KPIs, which I'm sure we'll talk about later that that we track, we've seen some significant gains there as well. So
Rory Anderson: That's great. Has centralization how do I ask this question? Has centralization changed the way you staff your staffing model at the property? And I this it can be a touchy subject, right? Because sometimes when people hear centralization and they're on the ground, they're like, Whoa, is my job in jeopardy? Am I
Kara: Okay.
Rory Anderson: gonna get fired? Right. So you have to be careful with this question. But help me understand that from a business perspective, what that has looked like, Keith.
Keith T Jones: Yeah. yes, it has changed the way we operate on site. we all know that that the Pretty much a rule of thumb in property management that you're taught is that there should be one person per 100. And so we here at Oakwood, we wanted to challenge that and and see if we could reduce that by half. And let's say, can we go to one per 200 but take take some some modest steps to get there. So we so we so we rolled out our first iteration which is one per 150. and that did cause a a staff reduction and and was still in that iteration by the way. And so that layer if you have a property that has an assistant manager that particular layer was pretty much relocated to our centralization department because that that assistant manager is the person that always was stuck doing the paperwork
Rory Anderson: Mm.
Keith T Jones: on any problem. They were stuck doing the paperwork, right?
Rory Anderson: Yeah.
Keith T Jones: And so no matter how much we want that person to get out and and and lease apartments or help with renewals or whatever, it's just so much they they're stuck in that office during the churn. So when we removed that, we definitely eliminated the position. But one of the things that we also did though here is that we created another multi-site layer. We had regional managers that was overseeing a pretty nice size portfolio And so we had managers that will would be in their manager role and then hopefully one day become a regional. One of the things, through our post surveys, we found out that managers were getting a little bit disgruntled because they said, well, there's only so many regional manager roles, and I feel like I'm stuck.
Rory Anderson: Right.
Keith T Jones: So we created this area manager role that would take on smaller portions of the portfolio within a particular region. And so now it created another level of advancement for those who wanted to make a career out of this. But it allowed us to not have that salary resting all on one particular property, but across multiple properties. So.
Rory Anderson: Hm, I that's interesting. Kara, how have you seen that work and and what's your opinion on this as far as what it's done for employee morale?
Kara: Yeah, I mean I think that's what we kept hearing is you know, leasing people get stuck, you know, what's their next advancement? How long does it take for me to become a property manager? And then the property manager said same thing, you know, when regionals never leave.
Rory Anderson: Mm.
Kara: when am I ever going to be able to get that? So with centralization, we were able to create two new positions, which property manager pretty much we did away with. But you could become an area manager where you see over one, two, three sites, depending on unit size, and more responsibility. Obviously, you're managing two teams. And we took a long time to look at our current people and really, really try and find those leaders that were, you know, one step away from being a regional manager. And then
Rory Anderson: Okay.
Kara: we noticed that we had some leasing people out there that were really eager and supporting their area manager. Maybe the area manager wasn't there that day, they were at the other property. And really showed a sense of helping out and wanting to grow and taking initiative to walk units. And so then we created the leasing manager position. So the morale, the team, the staff loved it. They're like, my gosh, there's growth, there's opportunity. I don't have to wait five years to become a a property manager.
Rory Anderson: Mm.
Kara: So and it was just great to see. I think when your peers, when you see your peers get promoted or get that new title, then it's like, well, I wanna be a L E see manager too. So so it's been positive.
Rory Anderson: Yeah. That's great. That's awesome. That's good feedback. What have you learned, Kara, that simply doesn't centralize well? And you're like, we we either you made the mistake of trying to centralize it and went back, or you just have realized this isn't gonna work.
Kara: I think probably the one thing that I didn't worry is we may have chosen an area manager and given them too big of a property. I think we think it's the same seat as a property manager and an area manager, but we did realize that some people just weren't weren't ready to oversee multiple staff or
Rory Anderson: Mm.
Kara: felt a little frazzled because yes, they ran their property perfectly. But wait, now I'm taking on this other one. It's different. properties of personalities. So
Rory Anderson: Yes.
Kara: I think we had, you know, we had to jump some hurdles there and figure it out. but I think that the person knew too. I I guess I'm not ready for this. So I think really that was the only real hurdle we ran into is maybe placing the right people to do it.
Rory Anderson: Okay, thank you for sharing that. you know, Keith, one argument for centralization that I've heard is that specialists can outp perform a general list. Have you found that to be true? And give maybe give me an example.
Keith T Jones: Yeah, I think a specialist can outperform a generalist, but I don't think that that is a bad thing because you place the specialist in the in their specialization. So
Rory Anderson: Mm-hmm.
Keith T Jones: For us, we have our centralization department and they work in in teams. They're taking on this process work, so they're specializing in it. And so if we have leasing people their specialization is to lease apartments, they really don't want to be bothered with all of the other paperwork. So we put them in their specialization. So it works out to be a perfect marriage. And so I think it's a great thing.
Rory Anderson: That's interesting. I I've always loved this thought that it's really fun to be good at something. Like when you're really good at something, it's fun and it's you enjoy it. So I think
Keith T Jones: Right.
Rory Anderson: what I'm hearing from you is that this has given the people that are good at their specific jobs that opportunity to just flourish and thrive in those areas that they're they're already kind of prone to being good at.
Keith T Jones: Right. The and the interest the interesting thing is, Rory we did not hire anyone for the from the outside for our centralization department. They all came from on site. So these
Rory Anderson: Mm-hmm.
Keith T Jones: were people that were on site that said, you know what, I I like doing paperwork. I think I'm better at it. So this opportunity has come up. Let me go and work in the centralization department.
Rory Anderson: Yeah, that's awesome. Kara anything to add there?
Kara: no, I mean totally agree. I think it's always been known that you're you can be good at sales and not paperwork, but it's very hard to find the person that's good at both. and we we really did. We found, you know, our rock star leasing people that said, No, I I'm a people person day in and day out and
Rory Anderson: Yeah.
Kara: other people are like, Nope, just get me in front of a computer and I'll process all day.
Rory Anderson: I love that. That's that's great. That's it's you need that. You need that variation. So, you know, I Keith, at the end of the day, you as the owner of the company, you know that owners of the properties care about NOI. So can you now draw a measurable line between centralization and improved property level NOI?
Keith T Jones: Yes. a couple things that a couple things that we track that that we talked about when we first started this was salaries. That's always the big elephant in the room. And so today from twenty twenty from t comparing twenty twenty six year to date to 2024, because we we really started ramping up during 2025 and starting it, we've seen a 17% decrease in our in our payroll across the entire portfolio. And that's just year to date. And so we it's gonna we estimate probably by the end of the year is going to be 2025. And that is a direct hit to the NOI line.
Rory Anderson: Is that on the property level you mean? The property level NOI? Okay.
Keith T Jones: On the property level. Right. On the property level. And so we also track other things that is showing up in a lot of different ways. such as our conversion ratio. we're our goal is For our conversion, a tour conversion, when someone comes on site, we want to convert that 40% of the time. Prior to centralization, we were averaging the low 30s. Today, we are are above 40%. So we hit our goal. We have 41% actually.
Rory Anderson: Well.
Keith T Jones: Our lead conversions, which which when we captured them from online and getting them all the way to at least our goal was fifteen percent and prior to centralization it was in single digits today is seventeen percent and here's the interesting thing where typically the beginning of the year we all know It's winter and occupancy is kinda sink down
Rory Anderson: Mm.
Keith T Jones: starting in the fourth quarter, going to the first quarter. We did not experience that for the first time, I think ever. Our average portfolio, our average occupancy was like ninety-eight percent.
Rory Anderson: Wow.
Keith T Jones: And so and it and it has stayed that way, Rory. even until today. And
Rory Anderson: Wow.
Keith T Jones: so so that translate we've seen a uptick in gross revenues. in a double digits, when I say double digits, we're averaging twelve point five. And so that's translated into higher NOIs as well. So all of these all of these things moving inside the engine has caused us to see double digit increases since the end of twenty twenty four to now in the average NOI percentage.
Rory Anderson: That's great.
Keith T Jones: Yeah.
Rory Anderson: That's amazing. Kara, anything to add to that? Any other KPIs that you've been tracking?
Kara: I think primarily that's what my focus is on is closing ratios. 'cause I wanted to see are people actually spending more time renewal
Rory Anderson: Yeah.
Kara: rates? You know, is it truly working on that end? So, and it has. I mean, it's been amazing how we've continued with the competition in Ohio, that we have continued to remain at a great occupancy. So I'm gonna give it credit to the centralization standard and the site teams.
Rory Anderson: Interesting that you're seeing those things. Keith, where where do you think centralization can go too far? Like at what point does efficiency start hurting maybe the resident experience or like a disconnection
Keith T Jones: The moment.
Rory Anderson: from the on-site team? Tell me about that.
Keith T Jones: I think two things and this was for us, right? I th one is I think you have to be careful today about being too quick to roll out technology and thinking that it's going to replace human interaction. we're still finding that human interaction plays a big role. in property management. There's all sorts of things with AI and things we can do today. We all know it, we hear it, we go to the conferences and we all know that. But what we found is that that touch is still still very important. So we decided not to make wholesale investments too fast into it, but more kind of steady investments in the things that would help us bolster our model that's in place. The second thing is the one thing that we did not centralize a hundred percent was our maintenance. And so because we are very cognizance of our response times, again, our interaction with our residents. And so we we did prior to rolling out this massive centralization model, we did kind of centralize our on-call to kind of help our guys to kind of share the load. But we still have a full maintenance staff on each one of our properties so that we can respond, we can communicate, and we can take care of those problems because th when those residents are happy, they tend to stay longer. And the number one complaint on a property is gonna be along the lines of something dealing with maintenance. So we have been very,
Rory Anderson: You're right.
Keith T Jones: very we have been very, very reserve about not trying to force that end of it. So
Rory Anderson: Very smart, very smart. So, Keith, if another management company wanted to centralize tomorrow, what would you tell them maybe to centralize or not to centralize first? What would be your advice there?
Keith T Jones: Going back to my previous study on previous question, I would definitely tell them to look hard at any process-oriented work that you have. while process-oriented work has to be done, it really does not, it it it doesn't create income, right? it it keeps you from being sued. So I guess that's a that's a way of of protecting income but it income but it doesn't create income. So that's one area that I would tell them tell them to look at and then I would tell them to be cautious with trying to centralize maintenance and I know that that's a hard thing to do because the cost of maintenance just keep going up, up and up on us
Rory Anderson: Mm-hmm.
Keith T Jones: and so some companies have are doing it and are and are trying to do it. My hat's off to them, but we just found that that's a area that we wanted to be cautious in because again those are the folks that really are connected to the residents on the property every single day.
Rory Anderson: I really appreciate that you're willing to share that and kind of like open up, pull back the curtain a little bit for other people that are looking into this. I think your experience is v really valuable. Keith and well, we'll do Keith and then Kara. I w I wanna give you a scenario. If I gave you two identical two hundred unit apartment communities, one traditionally staffed, one using Oakwood centralized model. Where specifically would I see the financial difference after twelve months? What would you say? Keith, go first and then we'll have care answer.
Keith T Jones: 12 months, you're definitely gonna see a reduction in in in on salaries.
Rory Anderson: Okay.
Keith T Jones: You're definitely gonna see that, which is, you know, that's a that's a big, you know, that's a big expense line. Number two, you're gonna start to see gains in in other areas that's gonna translate into your NOI, such as you're gonna see renewal percentages increase, you're gonna
Rory Anderson: Mm.
Keith T Jones: see closing ratios increase. So now you're gonna have a property that's gonna be operating at a higher occupancy and it's going to hopefully remain at a higher occupancy and not have these these these swings
Rory Anderson: Fluctuations.
Keith T Jones: or fluctuations. throughout the year, which again is gonna translate into a higher NOI.
Rory Anderson: Mm. Really interesting. Kara, what are your thoughts?
Kara: exactly. totally agree. And I I think the other thing is with Oakwoid and our large portfolio, people wonder does it work the same for a class A, B, or C? Is it because we have all
Rory Anderson: Yeah.
Kara: of those. and it does. I mean we know the day-to-day doesn't go away whether you're an A, B, or C. that work is happening daily regardless of the asset type. so
Rory Anderson: Right.
Kara: again, the administrative portion taking that off. that consistency, actually the strength of centralization. It doesn't it doesn't discriminate by asset class because the work itself doesn't either. So, 'cause I was I was worried about that. We have some small properties and I wondered. But
Rory Anderson: Mm.
Kara: yeah, they're thriving and Doing well.
Rory Anderson: That's awesome. What is there anything else that you that you would either one of you want to share about this experience or what Oakwood's experience has been, or anything that you've learned? Anything else that we haven't covered yet?
Keith T Jones: I think if a company is really seriously thinking about doing this, one of the things that we did was we put together a steering committee in the beginning before we launched anything. And we sat around and we brainstormed and we talked about it. We even invited in a change management expert to help walk us through some things. And this steering committee was comprised of people in corporate and on-site. because we had to understand, right, as we make changes, how would those changes affect corporate and affect on-site and vice versa.
Rory Anderson: Mm.
Keith T Jones: And so it gave us a playbook, no pun intended, going forward. to to start and even with that we are still tweaking it because we are just a little bit over a year into this and so we're still tweaking things but we were mer we we were much f further ahead towards the goal line by having this steering committee with w when when we have people that are actually touching the work saying, Hey, have you thought about this, have you thought about that? And and l and incorporating that into the entire plan.
Rory Anderson: I love that. And that creates buy in too when you're using on site people, right? And corporate people. You've got to work together 'cause you don't want anybody
Keith T Jones: Yeah, because you don't know
Rory Anderson: to feel left out or that their opinion wasn't considered.
Kara: Yes, agreed.
Rory Anderson: Hera?
Kara: I would say, you know, that's where I pride myself is thirty years in the industry, I started as a lease and I've I've been through every role and I don't ever want to forget that. So we may be brought on a new program and from our eyes, you know, the sales pitch, it looks amazing, it'll take care of it, but until it's actually rolled out and the site teams are using it day in and day out, you know, that was where you know I I would bring in the new area managers and you know, after about a month and get their feedback, what's working, what's not. 'cause we need we we assume that everything on our end looks good, but so they were very appreciative of that to say, hey, this isn't working or we need to tweak this. So we definitely do a great job of listening because we knew we didn't know this was gonna be a perfect answer. So I'd love that that Keith always sets us up with a team and a collaboration and we talk it through. We don't Just say do it.
Rory Anderson: I love that. That's so important in any organization. Let's you know, I've told you guys this is a leadership podcast. So I'll let you guys both answer, maybe Kara first and then Keith. What's a leadership principle you believe in and that you've tried to live by and tell me how that has helped you professionally or personally in your life?
Kara: yeah, I guess I feel I lead from experience. like I said, I've done I've been in this 30 years. I started as a leasing agent, I worked my way up, assistant, property manager. I was even a s special events coordinator at one time, regional manager, director of ops. you know. None of us ever really choose to go into this industry. I personally happened to go through a divorce and had a son and we had a home, we were selling. So I was out looking for a job and an apartment. and the girl was like, You have a great personality, you should start leasing. And here I am 30 years later. So I will say that's the one.
Rory Anderson: I love that story by the way. I love that. That's amazing. That's so f that's so f that I think a lot of people can can relate to that.
Kara: Exactly. Yeah. I mean who knew? but I guess that's where I I pride myself is, you know, I don't forget what it's like to be a leasing agent or a property manager that's dealing with a suicide or, you know.
Rory Anderson: Mm-hmm.
Kara: and I I think I've built that respect with my team. and they know that I'm I'm not the type of VP that you can't reach out to. I support them i in in any any position. I 'cause I know what it's like.
Rory Anderson: Yeah. Yeah, that's that's the empathy side of leadership, right? You've been there.
Kara: Right, exactly. Yeah.
Rory Anderson: Keith, what about you?
Keith T Jones: Like Kara, I started out as a leader consultant as well. But the one thing that I've learned that I kind of take pride in f as a leadership lesson is being able to perfect situational leadership. and there are there are no two days that are the same in property management. And so as a leader, you have to be able to dissect the the property that has its own personality the the team that's leading it and the leader has their own personality, their own, their own
Rory Anderson: Mm-hmm.
Keith T Jones: way they want to lead. And so learning how to to to lean into situational leadership and not being so rigid as is saying this this it I'm gonna roll out my leadership style across the entire company, but trying to get the best out of individuals based on their situation, which means the the properties are or regions that they're managing and who they are as a person. And last but not least, being a servant leader, we are here to serve those that are close to the work every single day.
Rory Anderson: Hmm, I love that. Well, Keith and Kara, thank you so much for joining me today. I'm gonna call you K Squared, Keith and Kara. Love it.
Kara: Okay.
Keith T Jones: Yes, okay.
Rory Anderson: You know, I think one of the biggest takeaways from this conversation for me is that centralization isn't simply about doing more with fewer people, which I think sometimes people think, right? But it's about being more intentional about where work gets done. And who is best equipped to do that work and how we free up our on-site teams to then focus on the things that truly require the human connection. And I think you guys have done a great job of of doing that and explaining that. And I'm sure it's been w not without a few bumps and bruises along the way. But ultimately that's the balance that every operator has to find. You know, we can centralize processes or specialize roles, leverage technology, we can try to reduce administrative work and hopefully improve NOI. But if we lose sight Of that resident experience or disconnect our on-site teams in the process, then that efficiency can can quickly become counterproductive. So I think that you've done a great job of explaining how you've had to balance that. I also appreciate that both of you brought this conversation back to measurement because centralization shouldn't just feel more efficient. We really need to be able to track and look at the KPIs, the staffing model, the operating expenses, like you talked about, and even the resident experience. And ultimately the financial performance of the property and determine whether it's actually working, right?
Keith T Jones: Yep. Yep.
Rory Anderson: Yeah. So Keith and Kara, thank you so much for sharing what Oakwood has learned along the way. I know it's gonna help a lot of people out there listening and for being willing to talk about both what works and where operators need to be careful. I think you guys have done a great job of covering your bases. On this show, we always like to do an unpaid ad at the end. So this is just Anything this is just kind of a fun thing that we do, but it's anything that you love, a brand you love or something that you like. I mean it can be really simple. or it can be something that you're like, I just can't live without this item, this thing. So do you guys have anything that you want to share for your for the unpaid ad?
Kara: what can I live without? one. I don't know.
Rory Anderson: You gotta have something. I'm sure you have something that you can't live without.
Kara: I mean my son. I have my son who's in the Coast Guard. I keep an eye on
Rory Anderson: Hey, you can
Kara: that all the time.
Rory Anderson: you could do Well, I'm sure he appreciates that.
Kara: Yeah.
Rory Anderson: Keith, what do you got? You got anything for us?
Keith T Jones: Yes. It it w it's it's not any th it's not a a
Kara: I know him.
Rory Anderson: Hey, it can be anything. We've had people say Diet Coke. Like I can't live without Diet Coke.
Keith T Jones: Well it's not a it's not a product.
Rory Anderson: Okay.
Keith T Jones: the thing that I can't live without that I would monitor people to lead into is I can't live without my faith. Right? I'm a faith driven person and I think in the world that we live in today People need to to to to lean into their lean into their faith and and and be able to have a a North Star and a compass that that that would guide them where they're trying to go. So to for me it's my faith.
Rory Anderson: I love that. And I am right there with you. My faith and my family, they're everything to me. And so I can completely relate. And I think a lot of people, I think most people listening
Keith T Jones: Mm-hmm.
Rory Anderson: can relate to that because we cannot do it alone in this life. We need we need that higher power. We need God on our side, and we can always do more with him. So I love that. Well, to our listeners, thank you for joining us for this special episode. Until next time, keep building great teams, keep leveling yourself up, and go be a light and a blessing to someone else.
