BETHESDA, MD–Last month the locally-based ROSS Cos. announced it had created the role of CEO and tapped David J. Miskovich, the company's COO and CFO to fill the slot. Miskovich has been with the apartment management company for 13 years — having joined from Archstone-Smith, where he was vice president of asset management and operations – which must have made the decision to expand executive control easier for this family-owned company. Scott Ross will remain president of ROSS Development & Investment, and chairman and president of ROSS Renovation & Construction, and Beth Ross will continue as president of ROSS Management Services.
Miskovich assumes the helm of the company just as it is expanding its geographic reach. Until recently, ROSS Cos. had focused exclusively on the Washington, DC metropolitan area. In 2015, it opened an office in Richmond, VA where it now manages nine communities. More recently, the company has expanded into Charlotte and Winston-Salem, NC and Spartanburg, SC.
GlobeSt.com spoke with Miskovich to get his take on the area's apartment market and ROSS Cos.' plans for 2017 and then hop-scotched to other subjects. This is what he had to say:
What I think about Class A versus Class B multifamily.
There has been a lot of new construction, particularly in the Class A segment, in metro DC over the past couple of years, which has stagnated overall rent growth in newer communities, requiring owners of this product type to offer concessions. With a strong local economy and accompanying job growth, new units are now being absorbed. This has led to stronger net effective rent growth across the region for the Class B product type.
How ROSS is reacting to this trend.
ROSS, which traditionally has been more focused on acquisitions and property management than development, has been extremely cautious about new construction in metro DC recently. Instead, we have prioritized acquiring and winning management assignments for communities that are underperforming and offer opportunity for a significant improvement in performance. This value creation that we provide our partners and clients has insulated our organization from new development risk.
How ROSS' portfolio has performed in this environment.
Our portfolio and product type has averaged over 4% annual net effective rent growth per year over the last six years. We feel this trend will continue if not improve due to the fact consumers are willing to pay a premium for a repositioned community. Additionally, the rental premiums generated produce a handsome return on investment for our partners and clients.
About ROSS' future expansion plans.
We were drawn to these markets [Richmond, VA, Charlotte and Winston-Salem, NC and Spartanburg SC] because of their strong and diversified job growth and their significant supply of undermanaged apartment communities. As for the future, we will continue to explore expansion opportunities in areas that fit the same criteria. It has helped that we have created tremendous partnerships with several new clients such as Cedar Grove Capital and Time Equities. We plan to continue to grow as these organizations expand their footprints in these regions.
Does this country have an affordable rental housing crisis?
Yes! We feel it's the biggest challenge facing the apartment industry today.
Our co-founder, Scott Ross, is a member of the National Multifamily Housing Council's Workforce Housing Affordability Committee, and the ROSS leadership team is absolutely committed to aiding Scott and the committee in their efforts. ROSS has had some success in this area, but solving the affordable housing challenge will be difficult without more companies choosing to own and manage affordable communities. It's actually an opportunity because of the high demand in many ways. Some estimates peg the unmet demand for affordable housing at 6 million units nationwide. With the programs and systems that are in place today, meeting that demand has been and will continue to be difficult.
On other pressing issues facing apartment managers today.
Online reputation management is certainly one. Reading online community reviews has become a fundamental component of the apartment shopping experience, and prospects will examine very closely how communities respond to online complaints, so property managers have to have top-notch programs in place in this area. To compete for today's renter, property managers also must build and execute outstanding online advertising, content-marketing and social-media campaigns.
BETHESDA, MD–Last month the locally-based ROSS Cos. announced it had created the role of CEO and tapped David J. Miskovich, the company's COO and CFO to fill the slot. Miskovich has been with the apartment management company for 13 years — having joined from Archstone-Smith, where he was vice president of asset management and operations – which must have made the decision to expand executive control easier for this family-owned company. Scott Ross will remain president of ROSS Development & Investment, and chairman and president of ROSS Renovation & Construction, and Beth Ross will continue as president of ROSS Management Services.
Miskovich assumes the helm of the company just as it is expanding its geographic reach. Until recently, ROSS Cos. had focused exclusively on the Washington, DC metropolitan area. In 2015, it opened an office in Richmond, VA where it now manages nine communities. More recently, the company has expanded into Charlotte and Winston-Salem, NC and Spartanburg, SC.
GlobeSt.com spoke with Miskovich to get his take on the area's apartment market and ROSS Cos.' plans for 2017 and then hop-scotched to other subjects. This is what he had to say:
What I think about Class A versus Class B multifamily.
There has been a lot of new construction, particularly in the Class A segment, in metro DC over the past couple of years, which has stagnated overall rent growth in newer communities, requiring owners of this product type to offer concessions. With a strong local economy and accompanying job growth, new units are now being absorbed. This has led to stronger net effective rent growth across the region for the Class B product type.
How ROSS is reacting to this trend.
ROSS, which traditionally has been more focused on acquisitions and property management than development, has been extremely cautious about new construction in metro DC recently. Instead, we have prioritized acquiring and winning management assignments for communities that are underperforming and offer opportunity for a significant improvement in performance. This value creation that we provide our partners and clients has insulated our organization from new development risk.
How ROSS' portfolio has performed in this environment.
Our portfolio and product type has averaged over 4% annual net effective rent growth per year over the last six years. We feel this trend will continue if not improve due to the fact consumers are willing to pay a premium for a repositioned community. Additionally, the rental premiums generated produce a handsome return on investment for our partners and clients.
About ROSS' future expansion plans.
We were drawn to these markets [Richmond, VA, Charlotte and Winston-Salem, NC and Spartanburg SC] because of their strong and diversified job growth and their significant supply of undermanaged apartment communities. As for the future, we will continue to explore expansion opportunities in areas that fit the same criteria. It has helped that we have created tremendous partnerships with several new clients such as Cedar Grove Capital and Time Equities. We plan to continue to grow as these organizations expand their footprints in these regions.
Does this country have an affordable rental housing crisis?
Yes! We feel it's the biggest challenge facing the apartment industry today.
Our co-founder, Scott Ross, is a member of the National Multifamily Housing Council's Workforce Housing Affordability Committee, and the ROSS leadership team is absolutely committed to aiding Scott and the committee in their efforts. ROSS has had some success in this area, but solving the affordable housing challenge will be difficult without more companies choosing to own and manage affordable communities. It's actually an opportunity because of the high demand in many ways. Some estimates peg the unmet demand for affordable housing at 6 million units nationwide. With the programs and systems that are in place today, meeting that demand has been and will continue to be difficult.
On other pressing issues facing apartment managers today.
Online reputation management is certainly one. Reading online community reviews has become a fundamental component of the apartment shopping experience, and prospects will examine very closely how communities respond to online complaints, so property managers have to have top-notch programs in place in this area. To compete for today's renter, property managers also must build and execute outstanding online advertising, content-marketing and social-media campaigns.
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Erika Morphy
Erika Morphy has been writing about commercial real estate at GlobeSt.com for more than ten years, covering the capital markets, the Mid-Atlantic region and national topics. She's a nerd so favorite examples of the former include accounting standards, Basel III and what Congress is brewing.
