How Culture and People Create Real Estate Outperformance - Wade Madden - CEO @ Olympus Property

The misunderstanding is how dependent we are on people. And I think that, you know, it's all about, you know, how can we underwrite a deal differently, have a different business plan. You know, who's smarter, so to speak. And again, a lot of smart people in real estate for a very simple business. And I think we need to acknowledge that it is simple, but it doesn't make it easy. And and in order to to excel in this industry, you need to have the right people.

And and people really do make the difference and that comes with being intentional about talent acquisition, what that looks like, culture. All the things that we typically don't spend time talking about, but I really do think make the difference and allow you to generate that alpha.

Welcome back to the distribution by Juniper Square. I'm your host, Brandon Sudloff. Today's episode is part of our series on Lower Middle Market Alpha, where I sit down with emerging and next-gen investment managers. focused on creating alpha through a differentiated investing and operating approach.

My guest today is Wade Madden, CEO of Olympus Property. Wade shares how his background in risk management and entrepreneurship shaped his disciplined yet people-first approach to scaling Olympus into one of the largest vertically integrated owner operators in the country.

He unpacks how being operator first translates into performance, why culture is a true driver of alpha, and how technology and AI are augmenting, not replacing, the human element that powers great property management. Let's get into it. Wade, welcome to the show. Hey, Brandon, thanks for having me. I appreciate it.

As you know, I like to start all my conversations with asking my guests to briefly introduce yourself. So for our listeners who haven't met you or aren't familiar with who you are, could you please just give a brief background introduction?

Yeah, sure. Hi everyone. My name is Wade Madden. I'm the CEO here at Olympus Property. We are a vertically integrated owner operator. We have about thirty-six thousand units, mostly across the Sun Belt. We operate in 17 states. And it's great to be here. I I know we're gonna be talking a lot about operations and and that's really what we do. We focus on core class A multifamily and we're uh we're operators first. So it's it's good to chat.

Yeah, well I'm looking forward to it. I think, you know, you're probably Olympus is probably one of the largest, if not the largest vertically integrated operator in the multifamily space that most of our listeners have never heard about. And, you know, I'm curious to know if that is by design. And I think throughout the conversation we'll unpack that. But

In order to kind of orient ourselves, I want to start with a little bit about you. You know, tell me about your your background. How did you get into the real estate business and what was your path to uh your role at Olympus? So I started my career actually at KPMG in financial risk management, started in New York. I am originally a New Yorker, although I kinda lived in in all different types of markets.

Started with KPMG, worked there on their New York team, really doing financial risk management and then made it out to an LA based team, still doing, you know, much of the same, a lot of regulatory compliance at the time. 'cause it was, you know, post uh GFC. So a lot of regulatory work.

And then actually took a jump early on and uh jumped to a startup called Foodita, which probably none of the listeners have heard of. We built an on-demand uh food delivery platform. It was mobile based, it was an it was an app. competing against, you know, some of the big names like like Postmates.

Did a great job scaling that business and then wound it down. And at the same time, I actually uh was working with my brother buying uh student rentals in Westchester, California. So right by Loyal Marymount University. ended up, you know, adding a couple of ADUs. And and really fell in love with real estate. I was working full time, but then, you know, framing out garages on the weekend and at nights and

and fell in love with it. We ended up leasing it out. We actually still own it today, but that was one of the first real estate uh deals I I had ever done and realized I I had truly a passion for real estate and so went back to school to get my MBA at Georgetown. Terrific experience. The Steer Center. I can't speak highly enough about the program. Very practical.

Very much underwriting focus and then was fortunate enough to to run CrossPaths with Chandler Wonderly, who's the founder of Olympus, and started working for Olympus uh during the second year of my NBA, uh, underwriting deals. And then post graduation joined the company in twenty nineteen. Still on the acquisition side, which was fantastic. Rocking and rolling, doing deals. Typically we'll do about ten deals a year.

And we'll sell about five. So transactionally we're we're pretty busy and it was a great way to cut my teeth. and then stepped over to the operation side of the business in in the later part of of twenty nineteen.

and had the opportunity to learn it all about operations, which is why we're here today. And man, totally different world in acquisitions, but absolutely fell in love with it. I love working with people and I think that's that's really helped me along past, you know, seven, seven years or so. So yeah, no, it's been it's been a great journey. We've grown the company about three times since I first joined Olympus.

So to your point, Brandon, you know, we're we're we're a pretty large scale company now. We have about 835 employees. I mentioned 36,000 units. about nine point two billion under management. That is a levered number. But about a hundred and thirty five communities right now. We've really grown and and I think that's a testament to the folks that we have here at Olympus. And it's just been a fantastic journey.

You're one of the few, maybe the only, I'll have to go back and check guests that I've had on that has started their career in risk management. And I don't typically associate, you know, compliance controls, risk management and accounting with kind of the very entrepreneurial journey for most real estate firms.

Kind of what i what have you taken with you from your kind of early training at KPMG through to today at Olympus and maybe what surprised you the most about what's different from the risk management days to the present state? Yeah. Well, no, that's a great question. You know, I think what's interesting is uh less of the technical skills have carried over to real estate, right? Like I'm not looking at balance sheets necessarily.

It's it's helpful to understand financial statements and how they, you know, how they work together. But I'd say the biggest takeaway from from that that I had from KPMG was really working with teams. The benefit of starting your career at a big four is you know, you're on an engagement team on that's a pretty close knit, you know, number of folks.

And you learn very quickly how to work how to work together towards a goal. You have to produce deliverables that you have to present to the client. And so I really think the leadership uh the leadership skills that I learned at KPMG has have translated very well as I've kind of grown my career here at Olympus and had the opportunity to work with some wonderful teams. So I think it's less technical and more the soft skills that have really transferred over and then

You know, I think that there's risk in anything we do. I mean, we operate in California. There's risk all around. It doesn't matter what your docs say, you know, operational risk is everywhere. And I think learning when and how to take calculated risk is something that you need to you need to understand to to be able to operate in this type of environment and and grow the business as we have.

So the the other thing you said that stood out is, you know, you you kind of stumbled into real estate with your brother as maybe a side hustle as you were at a startup and, you know, poof, you went back to school and then you met Chandler and all of a sudden you're inside this company. How did you convert kind of your Yeah, what w how'd you meet Chandler and kind of what made Olympus an attractive place for you to join as you were finishing up getting your MBA?

Yeah, no, great question. I actually was introduced to Chandler through one of my classmates. He had interned with Chandler. And I remember him remarking uh to me, you know, you gotta meet Chandler Wonderly. He's very entrepreneurial. always moving in groovens, loves deals. He reminds me a lot of you. And so I you know, I was this was the first year of my NBA and I was looking for a summer internship and I figured, you know

you know, why not reach out to Chandler? I gave him a phone call. He picked up the phone. That's something that we're very proud of over here at Olympus, whether it's our investors, our partners, our vendor partners, that is, you know, we always want to be available. And so, you know, Chandler picked up the phone. We had a great conversation. And I said, you know what? I really admire what you've done. I'd love to fly out and grab lunch and meet the team.

And I and I did that. You know, I I I hopped on a plane the next day, flew out, met the team and realized just what a what a wonderful business he had started and and and continued to grow. And I really saw a lot of opportunity too to to to continue to grow and you know build out the platform, which is exactly what we've done the last, as I mentioned, about seven years.

So now I want to get into kind of the the the meat of of the episode. You know, we you're here, as you know, because we were talking about lower middle market alpha, the role of the operator, the sharpshooter. We're talking about operational alpha, kind of how do you drive outsized returns? So in order to frame up that conversation

And before we go deep on to into how you do things, you know, kind of remind us of the headline stats. So you mentioned thirty-six thousand units, eight hundred and fifty employees. I think you gave a hundred and thirty-six communities, but you know, maybe kind of just give us the the the two to three minute overview of of kind of the the deeper version of what Olympus is and how you think about yourselves in the market. And then we'll we'll start to unpack it from there.

Yeah, absolutely. So as you mentioned, we have about thirty six thousand units in the portfolio. We operate in seventeen states, mostly the smile markets. So think Southern California. across the US, all the way to Florida, up the eastern seaboard a bit. We got into North Carolina and then made a big push into the mountain states in twenty twenty and twenty twenty one. So we operate in Colorado, Utah.

Wyoming, believe it or not. We will go to some tertiary markets. So we're in Casper, Wyoming, which has been a standout market for us. But yeah, all we do is kind of class A core multifamily. So if I look at our portfolio, the average vintage of a community here at Olympus is twenty twelve and newer. We wanna be buying main on main locations, good part of town, somewhere that you feel comfortable with one of your family members living in.

And that's been our thesis. We've really played on that flight to quality as of recent. you know, very bread and butter on the on the type of product that we buy. We have about I mentioned a number of about nine point two billion of assets under management. That is a levered number. So we typically lever our deals about fifty to fifty five percent L T V. We use long-term fixed rate debt, and this has been huge the last few years as, you know, rates have risen as they have.

And we're and we predominantly b borrow from Fannie Mae and Freddie Mac. So mostly we're we're agency borrowers. So we're very conservative as well on the on the financing side. And that's created a ton of opportunity for us. given that we have zero interest rate risk on the portfolio right now. We are vertically integrated as well. So we have 835 employees. We do everything from construction, asset management, investor relations, accounting, everything is done in-house.

as well as our, you know, operations team. So of the 835, we have about a hundred corporate employees and then about 735 Olympians that are on property that who really drive the business and make it happen for our residents day in and day out.

So how are you capitalized from a business perspective? Do you raise capital on a deal-by-deal basis with institutions, with individuals? Talk to me a little bit about that structure. Sure. So of the capital we manage, about 70% is high net worth individuals. So we work with, you know, high net worth folks from around the country. And that profile of of investors very focused on, you know, cash on cash or yield.

Right. The other thirty percent of our capital uh is institutional in nature. So we have a number of institutional partners that that we JV with. And that bucket of capital obviously has different return expectations. The latter is a little bit more driven uh from a levered IR IRR standpoint and the former is, you know, very much, you know, yield driven, looking for, you know, you looking to build wealth for, you know, their family, a generational wealth over the long term.

So that would be that's the breakdown of the capital that we made. And is that done on a are you raising capital and on a deal by deal basis or or do you have a series of funds that you manage? How does that that work? Yeah, that's that's correct. So on the on the private side, we are syndicators, so it will be deal deal by deal.

It's interesting. So seventy percent of your capital comes from high net worth, but thirty percent comes from institutions, different return kind of expectations. One of the thing a lot of things a lot of our listeners are grappling with is you know, as traditional institutional capital becomes harder to raise, and we can talk a little bit about that later. you know, a lot of people are looking at private wealth. It seems like you've really scaled

the private wealth channel. So how would you kind of explain the dynamic between what your individual or high net worth investors want, what your institutions want, and how do you kind of put the two of them together, presumably in a deal to satisfy the expectations of both? Yeah. So so typically what we'll do is we will make sure that our private money the deal the deals will be a little bit different. They get allocated to the private money versus the institutional capital.

Again, because the return expectations are are a bit, you know, different. The high net worth bucket that we draw from is it's all referral based. And again, that's why not a lot of people have heard of us. We're really focused on just building the business organically. We haven't done a lot of, you know, marketing and and really pushing the Olympus name.

And again, we always want to be buying deals. We're very conservative on the underwriting side. So if you look at like a rent growth rent growth projections, again, how we finance deals, long-term fixed rate debt. Uh we're really conservative and that's done very well over the 30 years, 30 plus years that we've been in business. So that whole bucket of capital is all just based on referrals over the year.

And and you know, that that that that that investor is targeting five percent yield and a levered kind of ten to twelve IRR. Whereas the institutional capital that we manage is a little bit, you know, more return driven, probably, you know, closer to twelve to fifteen percent, you know, IRR and less cash flow conscious in the short term.

So to answer your question directly, Brandon, you know, it really just depends on the deal. Again, we're very entrepreneurial here here at Olympus. We want to get to a deal. And then once we get to a deal, we we will look at you know, in committee, just where does it make sense to allocate given, you know, our expectations from a retr return standpoint.

One of the things a lot of people are grappling with right now, and I'm curious to get your take, is in a challenging capital raising environment, while capital is hard to come by or maybe

it's not for you, but in the market in general, capital is harder to come by. But people are starting to see some good deal flow. And so how do you think about, you know, I don't know if these are programmatic relationships on the institutional side or how you think about it, but You know, when you see those deals, you mentioned, you know, get you got to find the the deal and then you'll figure out which bucket of capital, you know.

how do you think about not m you know, this dynamic of not missing out on the opportunity because first you need the capital, then you need the deal, or do you first need the deal and then you need the capital? W what what's that dynamic like for you?

Yeah. So I think it all comes down to relationships and communicating. Right. So we stayed very close to, you know, our our private partners as well as our institutional partners. And we're always having meetings with with either to understand kind of appetite. and and what they're looking for, especially on the institutional side.

You know, we'll we'll have calls with our partners. Hey, you know, what markets do you like? What are you looking for? What are you guys seeing in the market? So I think in this type of operating environment you can't overcommunicate and that's And and that's what, you know, we try to do is make sure that we're always in front of our institutional partners to see

what you know what their what what their capital needs, right? So I think it comes down to to to communication. And you know, what's interesting on the private side Fortunately for us, a lot of what we do is we will we will close deals on our balance sheet. We're fortunate enough to have a a a balance sheet of the size that we do.

We do like to close on our balance sheet. That way we can close quickly. We're not waiting on outside capital and the brokerage community loves that. And and again, I I I think that speaks to, you know, the reputation that we have in the market as closers. Which has been which has been crucial in this type of, you know, buying environment.

So let's talk about the operational side. You mentioned, you know, you're you're an operator first. What does that what does that mean? What does that mean to you to be an operator? So, you know, again, we have 835 Olympians, 735 Olympians are on property every day making it happen, you know, for our residents.

And whether it's Chandler or myself, we stayed very close to our operations teams. I'll give you one example of this, the budgeting process. So we are in the throes of budgeting for twenty twenty six. We're actually just wrapping up our budgets. But our approach has always been instead of top down, we're bottom up in the sense that.

We want to understand what our teams and our property managers and our maintenance team members are seeing on property, seeing in their respective geographic locations. And they'll build the budget. And then we will start to to, you know, review them as we need to. But it's different from other sponsors in the sense that, you know, we really want to understand what our teams are seeing day to day and start with those assumptions. rather than layering in our assumptions from behind a desk.

You know, being an operator first, I'll give you another example. We're we're big on events here at Olympus, whether it's our leadership events, I'm gonna talk about that in a in a few minutes. our holiday party where we invite all of our Olympians together to sell celebrate the holidays. We also do something called a corporate work day and and this I think speaks to the culture that we have here at Olympus.

But we like two times a year, what we'll do is we'll look at the portfolio and we have something called the award of excellence. And in each region of the portfolio, they compete to win the award of excellence. The Award of Excellence looks at, you know, are all the all are all of the lights the same color? Is the property clean? You know, we call it brilliance in the basics, but the basics of property management.

And it's a pretty in-depth list, right? It's not just one or two things. It's about fifteen. And each property has to fill it out. The regional managers will score, you know, their properties, and then each region will have a winner. What we do is we'll put all the winners into into a raffle. We'll pick we'll pick one of the properties and we do this two times a year. And myself and the senior team will go to that property and work the property ourselves.

for two days, giving that team two additional days of PTO. But but then for us as a senior team, we have to work the property, right? We have to go on the roof. We have to do the work orders. We have to lease apartments because ultimately that's what we do. And it's great because we recognize the efforts of our our team members on site and again, giving them two additional days of PTL, but we also stay grounded to being operating. It's so easy at this scale to sit back and manage behind a desk.

And aga again, by forcing ourselves to get on property, make it happen, we really understand what some of the challenges are uh throughout the portfolio. So that's just an example of when I say operator first, you know, we want to walk the walk. I'm curious, what's one thing that you've observed when you were on a property that maybe was most surprising to you or something that you underappreciated e you know, r relative to the work going in?

Yeah. So we did a corporate work day down in San Diego recently and I was on a work order by myself, which is which is scary to begin with. But uh this this residence dryer wasn't work.

And I was trying to figure it out. I was on YouTube. I I thought I could handle it. Watched a couple YouTube videos. I mean, this is crazy. I'm sharing this, but it's okay. But I was watching YouTube videos, trying to figure out the error code, right? And At a certain point, I just unplugged the dryer, waited two minutes, plugged it back in, turned it on, and it worked.

But again, it's it just goes to show, you know it just goes to show what our teams are doing day in and day out and and how much goes into just managing the basis. You know, it it it wasn't straightforward. I was problem solving real time. The resident was upset because her laundry wasn't dry. And and I think that, you know, a lot of times

We're making these these big multi-million dollar decisions, but we have to be mindful of the experience of our team members because if you take care of your team members, they'll take care of the residents. And that translates into the operational alpha that we're gonna be talking about. So when when you're talking to people about being an operator first or operational alpha, or maybe it's because you're buying

Ass from non-operators, more the allocators or somebody who's a fix and flipper. Like, what are some of the differences that? you know, drive the alpha in your portfolio or that, you know, people may not fully appreciate that only an operator really deeply understands about their assets. Yeah, I you know, I think it's pride of ownership.

Said simply, we are very proud that when you walk on Olympus property, it's gonna look different than other communities in the area because of how well we maintain those properties. There's a saying that we use here at Olympus. Clean dirt is better than dead flowers. And that just speaks to making sure that you're, you know, maintaining the properties as if it were your own.

Because they are our own. You know, an example, even in the due diligence process when we're buying deals, we are looking at a hundred percent of the lease files. We are walking a hundred percent of the unit. We are using technology to to to to catalog every single issue that we find ahead of time so that way we can put together a capital plan that we can quickly deploy so that we could show value to the residents off the bat.

And that sets the tone, you know, new management's coming in, new ownership is coming in. They care about the property. They're going to invest in the property and keep it well maintained. And you know what that translates to? better conversions on renewal, which really drives that rent role growth. So I think it's the attention to detail and the fact that that we care and that we have that pride of ownership that really separates us.

It sounds basic, but something tells me it's a lot. Yeah. Yeah. So let's I wish there was a secret I could tell you. I think the other secret and we could talk about it in a few minutes, but it it's it's finding the right Yeah. Right. And it's and it's making sure that Making sure that from an executive level that everybody understands the stress that the teams are under and how much that they have to deal with on a day-to-day basis.

And again, you know, what we what we want to be very intentional about is is making sure that we support our teams to to provide that operational alpha. And specifically, I'll give you an example. Like our regional managers will take on five to six communities.

Right. They're not taking on eight to twelve or more. And the reason we do that is we want to make sure that they're very focused on building high performing teams at the community level so that they can provide that service to the residents. So by by ensuring that they have a fewer number of properties, you know, the thought is that they can be at those properties more frequently and they have the opportunity to really invest in those relationships to build those high performance.

So if I'm an investor listening to this or maybe one of your competitors or your peers. I might be thinking, Well, that's fine, but you know, how do you how do you actually generate returns that are truly differentiated and outperforming? How do you get that alpha, if you will, when it seems like, you know,

you're you're asking your teams maybe to oversee less so they can be better at it. And that there's a bit of like a cognitive dissidence there, right? Because isn't it all about like maximal leverage? And you're inherently saying you're thinking about maximal leverage in a different way. So what's the what's the construct that happens in terms of how you get to this, you know, th this different operating model that you're you're running. Yeah.

So I mean specifically right uh with the example of our regionals taking on less properties and building high performing teams, you know, they'll be working with their teams to really understand the really understand the budgets, where they're tracking financially, um, which empowers them to make sure they're making decisions at the at the community level that really, you know, push performance. So something that we're very focused on here is

Having those renewal conversations. So stake t taking a step back, right? If I look at the industry right now, new lease tradeouts, I'm probably Slightly negative, if not flat, on new leases. But if I'm renewing a lease, I'm seeing a lift of about three to five percent.

So for us looking at operational alpha, it's making sure that our teams have the support and the training to have quality renewal conversations with residents that are in good standing at our communities. And I think that By making sure that our teams are smaller rather than larger, we can really ensure that that

interaction between resident and our teams is a positive one and leading to higher conversion ratio. So if I look at retention across our portfolio, I'm seeing retention numbers about 60% uh at about 60%. Which is fantastic. Because again, if I'm renewing a lease on property, right, I'm getting a three to five percent increase on the in place, you know, in in on in place rent, plus I'm not incurring the turn cost, the vacancy, et cetera.

So that's how, that's how, you know, we really view Operational Alpha in this environment. It's, you know, keeping the property well occupied and focusing on those renewal, renewable conversations. And how we're able to do that is making sure that we keep our our you know, our teams small so that our leaders are empowered to really drive drive that performance. Has it always been that you have been vertically integrated? Cause a lot of what you're talking about, I think, is dependent upon

having end-to-end control. And with end-to-end control comes the benefits of optimization. The challenge of that is I think there's a certain scale threshold, at least, you know, in talking to to some of your peers and other guests, where it's just not profitable to have property management or it's not profitable to have construction management inside of your organization. I'm curious, like what have you learned about

you know, running a scaled vertically integrated business. Cause the other thing that you mentioned is the business has grown three X in the short time that you've been there since twenty nineteen, which is massively impressive. So talk to me a little bit about kind of the the the inflection point and and maybe that that the lessons learned as you've both scaled your business and controlled end-to-end workflows to be vertically integrated.

Yeah, yeah. Th no there's a lot there. So, you know, I think that what we've learned is that uh, you know, culture and and investing in your culture is what allows you to scale. And if you're not mindful of your culture and how people communicate even within the organization, things fall apart very quickly. An example of that is even even when we talk about buying deals and investment committee, ensuring that our operators are on our investment committee.

and have access to the investment committee is crucial because the assumptions that your acquisition team, you know, is making. could be much different than what you're seeing operationally on the ground. So, you know, really making sure that the culture is inclusive for those natural conversations to be happening and people are actually collaborating. is essential when you start, you know, really scaling the business because it all comes down to people and it all comes down to community.

Making sure the left hand is talking to the right, right? Acquisitions is talking to asset management, it's talking to operations, it's talking to construction. And so by having all the key players around the table has enabled us really to scale the business without losing that attention to detail, which is what drives that operational output. So that's been that's been a huge focus kind of as as we've been scaling from a property level perspective.

what we've learned is our sweet spot is between two hundred and fifty to three hundred and fifty units. What we found is anything under two hundred and fifty units, it's much more difficult to manage from an operational standpoint, right? You have Less units. So from an occupancy standpoint, from how aggressive you can get with rents, you start to lose a little bit of traction because every single lease is that much more impactful.

So, you know, from a from a property standpoint, you know, not to say we don't buy deals that are less than two hundred fifty units, not the case at all. That's just a consideration as we as we grow is, you know, and as we buy deals, is okay, well, you know, this is ninety two units.

you know, is there some type of staff sharing that we could, you know, that we can look at to supplement the, you know, the on-site team? Because typically rule of thumb is one in, one in the office, one on the maintenance team per 100 units. So if you're buying deals that are smaller, right, it's it's more difficult to staff and still provide that level of service. So then you start talking about, you know.

centralizing roles and staff sharing and how can you supplement those teams. So I think I

kind of went everywhere there, but I'm trying to answer to you know the property side and then also from a corporate standpoint, again, really focusing on, you know, communication across teams since we are vertically integrated. That's been pretty Are there is there anything that you don't do in-house, like anything that you've chosen it doesn't make sense to have vertically integrated that you outsource that others might, you know, have have insourced?

No, we like we like control. Right. And and and I think that one of the things that has allowed us to remain vertically integrated is we only focus on one thing. That is kind of core class A multifamily. We don't have any other asset classes that we play in. And so because of uh we we like to say we're like in and out, right? If you look at the in and out menu, there's lit there's there's not a lot of options.

Same thing here at Olympus. There's only one thing we do and we do it really well. And so because of that, we haven't had the need to, you know, outsource. as much as I'm I'm sure some of our peers. You've talked a lot about people first. We talked a lot about culture. The business has scaled a lot. And I think, you know, as uncomfortable as it may be for some of our listeners,

to kind of wrap their head around the fact that like real alpha might actually be generated by the people that you have, not the deals that you do or the financial metrics that you put into your spreadsheet.

It's just a hard concept for a lot of real estate people to embrace, not because they don't believe it to be true. It's just not necessarily in the DNA of a lot of leaders of the biggest companies to truly focus on culture. So let's unpack it a little bit. I mean, what is culture mean at Olympus and and how do you think about scaling that as the business has has really grown substantially over the last few years?

Yeah. Well, I I really do think it comes back to being a servant leader, right? In humility. And I think that's what, as I mentioned earlier in the podcast, you know, the corporate work day, making sure that we're going on property, including myself, right? I'm doing work orders, I'm leasing units. I'm there present with the team.

we need to always be mindful from a senior leadership standpoint to continue to do that because we never want to lose touch of what we do and what we do is, you know, lease apartments. That's As an operator, that's what we do. We lease apartments. Simple as that. And I think, you know, it's it's important that, you know, like I said, as we grow, we we never lose sight of that. You know, staffing is a big topic in the industry right now as an operator.

finding the right people and putting in them in the right places is is crucial, especially in this operating environment where you're dealing with A ton of supply. One of the areas that we've really focused on is making sure that we're competitive in recruiting maintenance professionals. So our maintenance team members. are absolutely the backbone of our communities. We do maintenance appreciation week. We we built out regional maintenance tech program.

to make sure that our maintenance team members understand that it's not just a job here at Olympus, it truly is a career and being very intentional about building that career arc. We've also launched a very impressive training ambassador program where we're using AI to match people's personalities throughout the organization to make sure that they find the right mentors. Because what we found is if we provide these mentorship opportunities, people are more likely to stay.

We use a great survey platform where I get real time feedback from the teams of what challenges they're seeing, what they, you know, what they're happy with, what they're unhappy with. So that way from a leadership level, we can be mindful and and and and do the best we can at supporting, you know, those team members that are on site. We've also gone through our onboarding process. And have looked at, you know, what is the first week

of Olympus look like to that new Olympian, that 18 year old leasing professional that's starting for the first time. What does day one look like? What does day two look like? What does that first 14 days look like? And we and we've mapped it all out to make sure that when when anybody joins Olympus, their experience is the same.

And that it lives up to who we are as operators. And that intentional focus, I truly believe, leads to bringing in the right people, which then in turn allows us operationally to outperform. It's interesting what you said about maintenance and and and you talked a little bit about talent. You talked about talked a lot about talent, but we also talked about

how hard it is to both attract and retain. And, you know, we we didn't necessarily talk about the cost of talent and wage inflation, but how do you think about kind of your your your talent retention strategy, juxtapose against you know, the advances in technology. And so when we talk about operational alpha a lot, it's very easy to start with technology. And I appreciate that we're, you know, a ways into the conversation. We haven't really gone deep there.

because I think it highlights some of the other elements of what differentiates the way that you think about running Olympus versus others. But I do want to talk about technology because it's hard to ignore.

the advances in technology, especially in the multifamily sector. And I'm curious about how do you you know, are are is technology replacing people? Is it augmenting people? How are you thinking about incorporating technology and in particular

AI into your business at both the corporate level but also at the the asset level and maybe even to the extent you're doing it, talking about how you're using it to, you know, drive alpha in you know NOI growth in terms of, you know, c customer, you know, customer acquisition costs, if you will. Yeah, no, absolutely. Starting at the asset level, we are leveraging AI, which has been fantastic in the leasing process, right?

So, you know, call centers have been huge for years to make sure that if a prospect calls and your team isn't there, it bumps out to a call center to make sure that, you know, the majority of calls that come through are answered. And call centers have been helpful for us. But what we're doing now is we're we're looking at, you know, AI to replace those call centers, right? And the AI will actually, you know, text our prospects, set up tours, answer questions about units.

It's really comprehensive and it can set up like I said, it can set up tours, it can follow up, it can answer questions. And the beauty of it is it's learning as it goes. So it only gets better. What we want to be very careful of though is because e even though we have this technology and it's been very effective in converting prospects

to leases, which is fantastic for everybody, and that does drive alpha. I wanna make sure that and we wanna make sure that, you know, the teams understand this is really augmenting their role, not replacing their role. And that at the end of the day, no matter how good technology gets, when you call an Olympus property, the best person or the best, you know, the bet I'll say the best person to to pick up the phone is one of our Olympus.

And so working with the teams on training them on why we're using the technology, what the technology what the technology does and how to use it is critical because what we found and what w what I want to be very careful of is, you know, it is augmenting the team's efforts. It's not replacing it. And that's important for the team to understand.

Because I don't want it to be well the computer handled that phone call. I don't have to hand And I think without adequately training the teams and explaining the why. And how this can help them in their role, both financially and operationally. If you if you don't take the time to do that, then it's very easy for somebody just to not pick up the phone and let it go to our, you know, the AI software that we're leveraging, right?

And so, you know, I think to answer your question directly, I think it augments the team's efforts, but I think there's a lot of training that needs to be done. So that it doesn't necessarily replace them because Even though AI has come a long way. Again, from an experience standpoint, and I I listen to these prospect calls all day, right? I'm a I'm a nerd when it comes to this. I'm I'm literally listening to calls. You know, I block off two to three hours just to listen to calls a week.

Wow. But when somebody calls the property, when an Olympian answers, it's a fantastic conversation. With the AI, what we found is prospects sometimes get a little hesitant because they're just they're learning to interface with an AI versus a actual person with a heartbeat. And so those conversations go well, but not as well as when our team members pick up. So it's just making sure the teams understand technology is there, but you're the first line and and you do the best job.

Where's been the biggest point in tension in trying to get people to understand that AI is here to enable them, not replace them? I think the biggest thing is just educating people understanding how the AI works and understand here's the other thing, understanding how to encourage the AI to learn. So there's a lot there there's a lot that the AI doesn't know off the bat, right? Like does unit 101 have a quartz countertop or does it still have, and I'm making this up, for mica.

Right. Like a prospect is gonna call and ask that question. And the AI may have our rent role and understand kind of, oh, it has an R in front of the unit. So it's probably or after the units is probably renovated, it probably has the quartz countertop. But isn't too sure. So it will log that call and say, Hey You know, I need somebody from the team to to help clarify this.

And it's it's working with our team members to to understand, yes, they can actually work with the AI and help the AI learn. That's been the biggest friction point. And again, it just comes down to education and helping them understand the the software that I think what you just said is

really, really important for listeners to understand, which is number one, it's augmenting your job. But number two, your job is to help the AI learn. And in return, that will help you do your job better and more efficiently. And it will help drive

better experience for the end consumer of that. In your case, it's your tenant or the customer. But I think it applies to basically every part of the world where AI is having an impact. And I think, you know, understanding like help me help you is is really a key, a key value proposition here. Absolutely. And there's a f you know, there's a financial gain too. Your property is

you know, better occupied, hence, you know, we we use a progressive scale based on occupancy for, you know, for monthly bonuses. So the team's gonna be making more money, which is wonderful. And that's what we want. So it's understanding exactly what you said. you know, that the AI is there to work with you and augment your team to help the team be more

You you told me a story before we started recording about your maintenance team and I think it involved the Ritz Carleton. Those two things don't usually go hand in hand. But it ri remind me what we were talking about because I remember thinking like, wow, like I don't think people appreciate what's going on here. Yeah. So a big thing here at Olympus is again bringing people around the table.

And we've done this time and time again over the past seven years. You know, we have an annual leadership conference where we bring in our property managers and our lead maintenance professionals. And we do, you know, leadership training. We do a holiday party where we fly everybody in from around the company, whether you're a porter in West Texas or Casper, Wyoming.

what have you. Everybody is invited. We fly everybody in to come together and celebrate the holidays. So this idea of bringing people together culturally is very important to us. Now this year we flew all of our for our leadership conference, which is what I was referencing, Brandon, we flew all of our property managers and all of our lead maintenance professionals up to Chicago. to do an em an immersive training with a Ritz-Carlton focused on customer service.

Let me let me let me pause you there. A training at the Ritz-Carlton or a training with the Ritz-Carlton? With the Ritz-Carlton. Make the Ritz team training with the Ritz Carlton. That's cor that's correct. So tell me more. Ritz Carl the Ritz Carlton put on a customer service training. for our teams. We also were staying at the Ritz Carlton, which is wonderful experience because we wanted it to be very immersive. But we went through how to provide the highest level of customer service.

and who better to learn from than the Ritz Carleton you know, they're renowned in the hospitality world for providing those wow moments, that experience that people take with them forever. And that's what we want to emulate within the Olympus portfolio. And from a strategic standpoint, as we mentioned earlier, from from a if I'm just looking at rental income, right?

I'm seeing flat growth from a rent growth standpoint on new leases. There's not much changing there. I'm seeing a lift of about three to five percent depending on the submarket we're talking about on the renewal side. And it's blending out to a point and a half to two percent growth over the course of this year so far. But the majority, all that growth is driven from those renewal conversations.

And so by providing that high level of customer service at the asset level, that that resident is more likely to renew, which translates to higher conversion rates. I mentioned our retention rate is about 60%. And that's what's driving that top line growth.

But it all starts with the people and it all starts with the training and how those people are trained. And so again, we brought everybody up to train with the Ritz Carlton to provide that customer service, which translates to the operational alpha, which we're talking about today. I'm curious, have you gotten any kind of reports back from the field? Clearly you've been able to quantify the ROI.

from your new renewal uplift that you just mentioned, but any other kind of like anecdotal feedback from the field in terms of, you know, maintenance learned X did Y and, you know, result uh tenant renewed or something like that. Yeah, nothing I can draw on off the top of my head. Now what we what we did just launch though that I think is gonna be great and and the jury's out. I I I haven't haven't seen the results just yet. So maybe I could circle back with you once I do.

But we did launch an empowerment program for our team members. So the thought is that we want to make sure our property managers are empowered to handle any type of, you know, any type of negative resident event, right? Let's I'm making this up, but let's say, you know, the residence AC goes out. We manage to throw out the sun belt. That's a very big deal if you live in Texas. Right. And so we want to make sure that our property managers without any other approvals can work with that resident.

to at least at least go above and beyond. And and in this example, AC goes out, resident is upset, they come into the office. You know, we've told our property managers, you have the ability up to a thousand dollars.

to help that resident out. Now it doesn't necessarily mean you give the resident a thousand dollars and they're happy, but it can mean you buy them a two, you know, a hundred dollar gift card to Chili's so they could go out with their significant other to enjoy a meal on Olympus while we fix their AC. That's the level of service that you need to provide to operate in a a very competitive environment that's only been exacerbated by again all the new supply that's that that's hit the eco.

So we are launching this empowerment program because of what we learned at the Ritz Carleton and I'm I'm really hopeful that it's gonna drive, you know, alpha throughout the portfolio because I think it's It's rooted in customer service, which again is gonna it's gonna it's only gonna help us going forward.

It's it's fascinating to me and and I have a lot of these conversations, but for some reason as we're sitting here kind of going through this What's occurring to me and this this may be against the backdrop of a broader industry trend where

you know, the the the big will continue to get bigger in terms of AUM aggregation and they're kind of known for being diversifiers and allocators and and, you know, they they need to know people like you. And the the sharpshooters, the operators are truly getting you know, more specialized. But as we think about specialization, ม...ม...ม...ม...ม...ม...ม...

normally would take me to, okay, you need to have better pipeline, you need to, you know, be better at underwriting. You need to be a better, you know, asset manager. But what and and all those things are true. But what we're talking about today is about creating a better customer experience and creating, you know, a better place to work. And those things are universal. They're not specific to real estate. And so there's this interesting convergence happening where

you know, as a real estate operator, you're really needing to focus on things that are a little bit less tied to real estate and a little bit more tied to connecting with your customer. And I think there's just a lot of lessons to be learned from from that. Yeah, no, absolutely. And I think it really is all about service.

At the executive level and it's about service to our teams, making sure that they feel supported. Again, being intentional about onboarding, being very intentional about mentorship programs and training. That's how you support your teams. And if you support your teams, the the the thought is that they could provide better service to the residents. And that's only going to help the investors.

So that's really the the focus as of late here at Olympus and and again it's it's allowed us to outperform from an NOI standpoint. And then and then being realistic about like Well, who's driving the business, right? There's a lot of smart people in real estate and it's a simple business. And I think that sometimes we try to get smarter and smarter, but it's a simple business. It doesn't mean it's easy. Simple does not mean easy.

But but again, just being mindful of like, you know, don't overthink it. Make sure that you're listening to your teams. And and structure processes around that, hence the budgeting process, starting with what is our property manager seeing? Let them tell us what they need. Let them tell us what rent growth assumptions to make for 2026. And then there's the iterative process of, okay, you know, they assume rents are going up three percent.

Okay, well we're looking at, you know, X, Y, and Z sources and you know our s our asset team is is projecting, you know, two and a half percent. You know, how do we how do we come to an agreement around what we really think twenty twenty six looks like? But again, being intentional about hearing from the teams that are on property, speaking to those residents is so crucial.

And to your point, I think everybody leans into well, how can I be smarter than the next sponsor or the next, you know, operator? But it's a simple business and just focusing on the people I think is what's gonna separate. you know, the operators in the next, you know, twelve months if it hasn't already.

So we're recording this in October twenty twenty five. I want to spend the last few minutes we have together just getting your Quick take on the market and the fundamentals. Yeah. Let's frame let's frame up like the headline. Give me give me the backdrop for multifamily class A in particular from a macro perspective, and then I want to go slightly deeper into some of the markets that you're in and some of the the the idiosyncras idiosyncrasies or nuances of those markets.

So headline is supply. Right? Ton of supply, especially in the Sun Belt. I think fortunate for us, a lot of the markets that we play in are high supply, high demand. So I think that, you know, what we've seen throughout our portfolio is, as I mentioned time again, seen about point and a half to two percent rent growth. New leases are relatively flat, if not slightly negative, given how much supply and that's on an effective basis, how much supply that we're we're we're fighting.

Renewals are three to five percent. What I will say is that we are more bullish than we were Call it this time last year on the supply picture. If you look at numbers and I'm I'm referencing, I believe, a new mark study, but peak supply hit in about the third quarter of last year. So Q3 2024, supply has already come down about 30% roughly from that peak. And and we see it dropping quite a bit more, call it early next year to to the to to mid next year.

And a lot of that is because real estate, as we all know, is very lumpy, right? Cheap money, everyone built, build it and they will come. And then we got this glut of supply in the system. Now, you know, it's much more difficult to pencil development deals. And it's much more challenging to get those deals financed, given where rates are and sizing that debt.

So it's really sub it's really slowed down the supply pipeline. And so we're what we're expecting is in twenty six we're gonna have a little bit better of a backdrop to really start pushing on rents again. I don't think it'll ever go back to the crazy days of of COVID, but I'm a lot more optimistic looking forward than I am about the last the the last year. So that that to me is the the supply headline.

What about transaction activity? I mean, one of the things we hear a lot about is, you know, there's there hasn't been a lot of capitulation, you know. uh owners of assets, sellers of assets, you know, want and think their property is worth more than the buyers, to put it quite simply, and with the cost of capital the way it is, it's created a bit of a a standoff. What are you seeing in terms of transaction activity?

Yeah, well, you know, transaction activity, I think, you know, the precipitous rise in rates really slow things down. Whether however you're financing it, whether you're floating, whether you're you're putting on fixed financing from the agencies, the cost of debt has gone up and that's slowed Everyone down. I think what I'm seeing uh anecdotally

is that sellers are kind of coming back down to earth. People are realizing that, you know, values are not what they were kind of two to three years ago and they're coming to terms with that. Whether they're pressured by, you know, their the the maturity of their debt. or their capital to to to to ring the register. I I think it's probably a combination of the two, but we are seeing pricing come in. I'm seeing a little bit of a lift in cap rate.

Which is great. What we are always mindful of is replacement cost, right? What does it cost to build? Where do we sit compared to replacement costs? you know, are we are you know, we wanna make sure that we're not negatively levered. I think that was a that was a big, you know, a big topic the last few years, right? Buying deals that

you know, your debt is at, you know, call it six percent and your going in cap is a five and a half. Okay. Well, how do you make sure that you're in the positive leverage territory? Is there a story there? Is there a story that makes sense that you can execute on? etc. So, you know, all that to say is uh rates have been a huge factor in slowing the transaction pipeline down. I think sellers are getting more realistic.

I think that rates are starting to come down to a place where people are getting more excited and we are seeing more deals come to market, which is which is a good thing. I think s still we have a ways to go. But but I think the big thing too is in order to transact in this market, if you have money, you need to have the reputation to back it. And you need to you need to j differentiate yourself and and the market has to be comfortable with the execution risk.

So again, because we close deals on our own balance sheet, we we we manage that, right? And so I think from an execution standpoint. you know, we have a great reputation and that's that's helped us transact. We've bought, you know, six deals this year. We have another three that we're working on. Again, we typically buy about ten to fifteen a year. and sell kind of three to five depending on the market. So we're we're still net buyers and we have been the the past three years and that's because

You know, no one wants to be selling in a depressed market. It doesn't mean that every deal we don't, you know, every deal we wouldn't sell. It just means that, you know, again, we want to be long term holders through cycles, very mindful of when we exit. And right now the buy opportunity is is uh I think pretty compelling. What what have you noticed or what are you noticing in terms of the health of your tenant and specifically

you know, there was a big shift uh in a low interest rate environment for, you know, attendance to move from renting to buying. You know, the cost of home ownership has obviously gone up. But, you know, how is that reflecting in your portfolio? Because your portfolio is big enough where you have, you know, kind of a representative sample set, I feel like, at least for

you know, a specific demographic. Yeah, no, it's a great question. So from we track why our residents move out, right? There's a various number of reasons. But if I look at twenty twenty two as an example, twenty four percent of our residents moved out to buy a home. If I look at year-to-date numbers for 25, it's dropped to about 18%. So this kind of tracks what the public reads have been reporting for quite some time now. It's not revolutionary, but we are seeing folks opt to rent.

more so than moving out, you know, to buy. And I I would say that's a byproduct of just the rate environment. It's less affordable to buy. now that rates have risen to to the levels that they you know, that they currently are. I also think that most people don't have the savings to put down on a a down payment. So the the you know

It's really difficult to buy these days. And we're seeing that in the portfolio. As I mentioned, twenty twenty two, twenty-four percent, all the way down to eighteen percent today. And then from an affordability standpoint, you know roughly the cost to own a home in the US and I'm I'm generalizing here, but it's roughly three thousand dollars when you consider, you know, your principal interest, taxes, insurance, et cetera, call about three thousand a month.

Effective rents throughout the US is about it's about eighteen thousand and that tracks with That tracks with our portfolio. So, you know, there sorry, eighteen hundred and so there's a decent spread, right? Three thousand a month versus eighteen hundred. I mean, that spreads about twelve hundred bucks. I mean

That's huge. And I think that that's keeping more people in the in the rental product who who otherwise would have would have As you think about more people staying in the rental product versus buying, is that having any sort of an impact on what their

demanding or what they want from their rental product, whether it's, you know, unit mix, which is obviously harder to change, but amenities, which are easier to, you know, at least in theory to add. Obviously you've talked a lot about the importance of the basics experience, Lisa, maintenance, et cetera. But beyond those, kinda what are what's changing if anything? Yeah, no, yeah, it's a great question. So I you know, I think that

I think that the highly amenitized products are are doing a bit better. I always use this example of like, you know, there's this huge wave of value add. And I think that in certain cases there's a compelling argument to to value add a property. But what we've seen is really that flight to quality. So, you know, you take that nineteen eighties build that now has new countertops, light package paint, flooring.

And there's a premium of let's say$200 on that unit because of, you know, the work that's been done. And then you put it right next to a class A apartment that's been built the last, you know, call it was built in 2020 that has the full amenity package. What we've seen is that the the prospective renter is more drawn to that highly amenitized product.

because they're staying longer, because they're having families and they want the twenty four hour gym. They want the spa. They want the dog wash. They want the the ski room, right? Like That is in demand right now. And at least that's what we're seeing throughout our our portfolio. And I think it's again because of the millennial generation. It can't afford necessarily to buy. They're starting to form households. They're starting to have families.

You know, and they they wanna work out at nine PM at night'cause that after they put their kids down, that's when they work out. And so that's benefited us certainly in in the short term and I and I expect that to continue.

So I want to end on what's one thing that, you know, I think is most missed understood about multifamily right now by the broader market or the media headlines, you know, that you really feel as an operator, but other people may not see unless they're in your seat day in and day out. I think the misunderstanding is, you know, I w I would say is how dependent we are on people.

And I think that a lot of the media, a lot of you know, it's all about, you know, how can we underwrite a deal differently, have a different business plan, you know, who's smarter, so to speak. And again, A lot of smart people in real estate for a very simple business. And I think we need to acknowledge that it is simple, but it doesn't make it easy. And and in order to to excel in this industry, you need to have the right people.

And and people really do make the difference and that comes with being intentional about talent acquisition, what that looks like, culture. All the things that we typically don't spend time talking about, but I really do think make the difference and allow you to generate that alpha.

Well, we could talk for at least another hour, if not much longer, but unfortunately we're out of time, Wade. If any of our listeners wanna get in touch with you or learn more about Olympus or, you know, learn more about the business, what's the best way for them to to to do that?

Yeah, please feel free to reach out to us directly. On our website, we have our our email address goes right to investor relations, and then it'll, you know, it'll get to me. But would love to to speak to any of your listeners. Again, we're an open book here at Olympus. And we're really focused on just getting one percent better every day. Love it. Thanks so much for joining me today, Wade. Thanks, Brandon. Thanks for listening to the latest episode of the distribution by Juniper Square.

If you like today's podcast, please share it with a colleague or a friend. And don't forget to subscribe and rate the distribution on Apple Podcasts, Spotify, or wherever you listen to podcasts. You can connect with me on LinkedIn by going to www. www.linkedin.com forward slash IN forward slash B said Lof. Or you can find me on Twitter at B saidloft. You can also find a video recording of this conversation on demand at junipersquare.com forward slash the dash distribution. Until next time.