What Asset Managers See That Property Operators and Owners Sometimes Miss

Bill Douglas: Hello everyone, and welcome back to another episode of Peak Property Performance. Before I introduce our guest today, I want to remind everybody to like, follow, subscribe. This is how we're getting the word out about this movement to change an industry relative to data and digital infrastructure. If you know somebody that wants to be on the show, please forward it, forward this episode to a friend and tell 'em, especially if it's an asset manager like our guest is today, tell 'em you should listen to this. So we would appreciate it. If you need to reach us, the best way is via the website at peakpropertyperformance.com. So today our guest is Carol Enoch. And Carol, before I read your introduction, tell us hello and where you're coming from today.

Carol Enoch: Oh, hi everybody. It's so nice to be here. I'm coming to you from the East Bay, Walnut Creek, just outside of San Francisco, and I'm really happy to be here.

Bill Douglas: I was in Oakland a few weeks ago for a weekend of concerts. I didn't know you were that close.

Carol Enoch: I

Carol Enoch: live in Oakland.

Bill Douglas: Oh my God. We went to the Fox for 3 nights of widespread panic. Yeah.

Bill Douglas: I wish I knew you were there. So I put it together.

Carol Enoch: That was walking... the Fox Theater is walking distance from my old apartment.

Bill Douglas: Oh gosh. Yeah. We stayed at a hotel that was walking distance away and then went into San Francisco every day.

Carol Enoch: That's so... breathe the Moxy.

Bill Douglas: No, it was another Marriott property though.

Carol Enoch: One of my former coworkers built the Moxy. This is a fun fact for the other multifamily nerds out there. That property was constructed using modular technology.

Bill Douglas: Oh, wonderful. I do like Moxys. I'm a Marriott guy, so it just wasn't that one. It wasn't, it was another one. It was, I mean, it took 5 minutes to walk. I love that. That's why I stayed there. When the show's done at, you know, 11:30, you don't want to go all the way back to San Francisco.

Bill Douglas: So Carol is a multifamily asset manager with extensive experience across ownership, operations, and asset management. Carol brings a practical perspective on where property performance is really won or lost and what happens when ownership, asset management, and operations are not aligned. So again, Carol, welcome to Peak Property Performance. We've been trying to do this for a while. I'm excited to have you.

Carol Enoch: We too.

Bill Douglas: We've known each other for a couple years, but I, I'm looking forward to the conversation in this context.

Carol Enoch: Same.

Bill Douglas: So from an asset manager's seat, Carol, where do you see property performance really being won or lost in multifamily today?

Carol Enoch: I think probably my biggest pet peeve right now is that I pay for my own data to get my own data back. And then I can't even get it in a format that I want or that makes sense. Drives me nuts. So for a little bit of context, I've been in multifamily since 2002. I started out as a leasing agent. I've worked onsite as an operator. I've worked in sales marketing doing a lot of new construction lease-ups. shifted into asset management. I've also owned my own consulting firm where I did work with some of our innovative property technology partners in addition to working directly for owners, investors.

Carol Enoch: And now I'm back on the asset management side working for a private equity firm. So I've had an opportunity to view this from a multitude of different perspectives. And I think that, you know, at the end of the day, where our industry is the most successful is at the basics, getting the rent we should get, keeping the residents we should keep, and distributing consistent returns to our investors.

Bill Douglas: Well, what does an asset manager see that ownership or the onsite team sometimes doesn't?

Carol Enoch: I would say that we will often see realistic strategies and trends. So from the ownership side, I think a lot of our ownership groups are used to a trajectory up, Right? Rents always go up, expenses always go down. So when I look at the pro formas that our acquisitions team writes when they're buying a property, it tells a great story, right? It tells a story of rent growth and it tells a story of expense savings. It tells a story of us investing in exactly the right property improvements, be it physical, digital, operational, or otherwise, and a sunshiny picture. Otherwise, the banks would not loan us money. Then I see the operators get these pro formas and go, I'm sorry, you want us to do what with where, how now? Where, what, where do these rents come from? from? Um, so I think the magic of what our role does is connect the dream with reality, right? And so, we have to be able to see and understand strategy and dreams and understand how to connect with the people that are actually gonna be executing those strategies and dreams, and then start communicating reality to both sides.

Bill Douglas: So, unreal rents. I'm trying to look for the right adjective. You, you described, where did those rents come from?

Carol Enoch: Aspirational. Aspirational.

Bill Douglas: Aspirational. All right. Um, would you call that a blind spot? Like you think you're... the blind spot being the rents don't align with market. So what other common blind spots would you see?

Carol Enoch: I actually think it's systemic. A blind spot is something people don't see. We all know that this is an issue in the industry. And I would say there aren't a lot of things that I would necessarily consider a blind spot because I think there's creative people everywhere that are capable of raising their hands and showing us these things. It's whether or not we choose to listen and how we choose to respond. So my current opinion, which hopefully will grow and change over time as I learn more. So hopefully somebody will write in and be like, Carol, you are totally wrong. Here's what actually happens.

Carol Enoch: And then that'll help us figure out how to fix it.

Carol Enoch: And I'll look forward to that.

Bill Douglas: You heard her,

Bill Douglas: write in.

Carol Enoch: Absolutely. Please write in. Call in.

Bill Douglas: Her contact information will be in here.

Carol Enoch: That's right. Email me, text me, carrier pigeon. The banks are largely responsible for saying that a project is valuable, be it a new construction or an acquisition, right? It's very, very few Ownership groups out there are paying just cash for properties. The interest rates are still, even though they're high, they're still favorable, right? In terms of where you can put your money, which is why multifamily real estate is a phenomenal investment. And I think will continue to be so as long as our economy runs in the way that it's running. So the banks though have a very stringent set of guidelines to which they will lend. And so we have to show them This is what it is. And I'm not saying that we make it up.

Carol Enoch: Sometimes we really do have extreme rent growth and cost savings, but, you know, that gets more and more difficult as time goes on. There are more resources out there that we have to try to create that value, but I don't think it's a blind spot. I think it's systemic in the way that our industry functions. It's just known.

Bill Douglas: Inflated or aspirational rents. So what would be some blind spots? Give us some examples of things that... That

Carol Enoch: tech is going to fix everything.

Carol Enoch: Oh yeah, that's a

Bill Douglas: good one. Like you can just buy a PropTech solution and solve it. Yeah.

Carol Enoch: Yeah. That's not true. I think that a blind spot on the operations side, and I consider myself part of that operations team, right? I'm responsible for making sure that the assets perform, that we don't need. So I'm going to say the technology is a blind spot in 2 ways. Number one, that we're going to buy something that's going to fix it. And number 2, that we don't need to be technologists. I think we all need to be technologists because it's here. We have to understand it. So I think one of the reasons we think that a PropTech solution will solve everything is because we don't understand it.

Carol Enoch: Right. And so like we have a portfolio analyst at Bridge who's learning how to code, right? Like I think we all are responsible to learn and understand the tools that we have and use them in a way that maximizes our asset performance.

Bill Douglas: These tools are used in a strategic manner, like in something that's architected, then they're effective. But, you know, technical creep was always a problem. Now AI creep has become an even bigger problem and people thinking they can code their own thing and it might work great, but it's never implemented across an organization or even worse, never documented. And when the person leaves leaves, moves on, gets promoted, whatever, it dies. So that we're seeing a tremendous amount of waste in the coding space. And we're seeing, we have for the past 7 or 8 years in PropTech seen a tremendous amount of overspend in tools, tools that either were never implemented or were even worse duplicated and spent. 2 people bought different tools to do the same thing. See it across organizations when we do audits.

Bill Douglas: And it's not just in real estate. This happens in all business, but real estate is Just following the same wave of other industries that did it 5 years in advance. That's all.

Carol Enoch: Yeah, that's right. I mean, we're, we're late adopters historically, right? On the technology side, we're a brick and mortar business. We're a people business. And I think those things are great. But yeah, we're often late adopters to the technology piece. So I think it's, it's a little bit of both, right? It's not going to save you if you don't understand it.

Bill Douglas: Well, you said some things you've seen owners focusing too much attention on, that would be technology or some of these blind spots. What are they not spending enough attention on?

Carol Enoch: The owners or the operators?

Bill Douglas: Do both.

Carol Enoch: I think that... what are they not spending enough time on? The people.

Bill Douglas: Paying enough attention to?

Carol Enoch: The people. I think on the ownership side, we often get hyperfocused on the numbers, which are important. In my experience, if you take care of the people, the numbers take care of themselves. I think education, educating our teams is really critical, and we're losing a lot and are going to continue to lose a lot of institutional knowledge and value creation if don't really start investing in our teams at every level. I think the operators want to do that. I think they don't always know how. And I think the operators don't always understand what the ownership goals are. And so there's some education on finance and investment that the really successful operators that I know understand that piece.

Carol Enoch: And the ones that aren't as successful are only capable of following directions or executing a plan.

Bill Douglas: Well, that's an age-old business problem. It comes down to the people. Yeah, but it's nice to hear somebody say it. We don't hear it enough, especially in this industry. We hear tech or we hear NOI or we hear expenses are going up beyond our rent roll increase this year. So we're pinched and it still comes down to people solving it.

Carol Enoch: Yeah, that's right. I did an audit when I had my company. Uh, we did a handful of audit projects on behalf of owners. And so we would go in and find money in the couch cushions, right? We would just go in and find value. And that worked really, really well because we were a third-party company and we were just coming in and trying to find, okay, where can we increase rents based on specific amenities? So rather than just increasing rents, find a really good reason to do it. Maybe you've got a view premium you're not taking advantage of. Maybe you have some renovation styles that some are slightly more favorable than others and you haven't identified. Just really getting in the weeds and in the details.

Carol Enoch: And then we communicated that to the operator directly in a way that was collaborative and partnership-oriented, and they were ready to receive it. And we mapped out, here's how you fix it. We didn't just say, here's a problem. We said, hey, here's what we found. Here's what our recommendation is. Add $3 amenity premium here, add $12 here. Hey, you missed some lease addendums on some parking. There's $10,000 extra dollars for this property.

Carol Enoch: You know, just get... we mapped it out so that they weren't feeling like we just handed them a bunch of work. And that's because the auditors on my team had an operations background. So they weren't just gonna handle a bunch of issues, they were gonna hand them a solution. One of the reasons that worked for us as a third-party company versus when an ownership group does that, if an ownership group, if I in my current role had come in and done that, my teams look at me, 'cause I'm the owner's rep, as the owner with a capital O. So they're gonna go, okay, Carol, Bridge Partners, their investors want us in every detail. So they're gonna start digging in every detail on everything and start to lose the big picture. And start to lose focus. So I have to be very judicious in my communication with my teams and understand what my role is and how much they're going to listen to me.

Carol Enoch: So I think understanding what person to deliver what messages and to put in what role is mission critical. So when we look at finding value, that's absolutely a way to find value. We found, I think, $240,000 annual, annual average per property in additional income for this client. It was phenomenal, but they couldn't have done that as successfully. Yeah, it was huge. It was awesome. And they knew it, which is really, really smart. And

Bill Douglas: you're talking about ownership objectives versus people actually operating the property, right? But that's the disconnect. It was a natural transition because I was going to ask you, what does the property team... and we'll do the converse in a second too... what does the property team understand that asset management sometimes misses? You've been on both sides of that. So we'll do the property team Retention. Asset management misses first.

Carol Enoch: Resident retention, what it takes to keep people.

Bill Douglas: Okay. Is that because the assumption is that we can turn it quickly and retention doesn't matter? Or is that just because they assume it's going to be X months for every lease? No, because that's their average.

Carol Enoch: They know the people, they know what the people want.

Bill Douglas: Oh, I meant they as in asset management, like asset management misses, right? So what are the... what is asset management missing?

Carol Enoch: On retention? Oh, okay.

Carol Enoch: So if the operators are

Bill Douglas: The property team understands retention's key. What, what is the asset manager missing in that? Just, they don't look at it.

Carol Enoch: No, they

Bill Douglas: don't value it as much.

Carol Enoch: We definitely look at it. I think that for those of us that don't have operational backgrounds, it's a push to NOI. It's a push to numbers instead of an understanding of what they have to do to keep a resident in place and keep them happy and give them the tools that they need.

Bill Douglas: So what's something that asset management sees that the onsite team doesn't understand? Not around that topic. Maybe it's around that one, but pick another one if it's not.

Carol Enoch: I would say long-term value and financial value of the property and what it means and strategy. And often we understand it just because we haven't bothered to communicate it to the operators. I try to include them as much as I can in the strategy so that they understand. Uh, although I got some feedback recently from one of my operators that I was sharing too much that they didn't get and they were confused. And I was like, okay, great feedback. Like you got to know your audience and give them what they can handle. So that was a nice little growth edge for me. And I'm,

Bill Douglas: Kudos to them for telling you.

Carol Enoch: I was going to say, I'm very fortunate that I have, um, great operators who will give me feedback like that. And that's part of how we've set up our relationship too. Like I, I can't do my job without them. It doesn't work.

Bill Douglas: I've known you for a few years and that's who you are to start with, regardless of what role you go into. Yeah.

Carol Enoch: That's right. I want the feedback, all of it. That's the only way that I can improve anything.

Bill Douglas: Well, how much trouble starts when people are measuring success differently? People being these different groups we're talking about.

Carol Enoch: I would say that's where almost all of it starts and ends.

Bill Douglas: Well, that was clear. I love it. Um, let's see, how much, how important is it to give the people closest to the property permission to challenge assumptions?

Carol Enoch: Mission critical. I would say that's I would say that's one of the most important things that we often don't get because we hire customer service. Yes. Which is a requirement of the job. And this is something, Bill, if you and I could solve today, I would be the happiest camper in the world. Um, because we need the, that customer service, right? That's required. These people are working where people live. You have no idea how stressful that is.

Carol Enoch: Like, you are seeing them at their best, at their work. You're working in their home. That is an intense... environment. And you want the residents, your customers to feel comfortable, safe, happy, right? That operations team is part of the value that we create in multifamily. And so we tend to hire customer service people. A lot of customer service folks are either trained or socialized to not push back, right? To just say yes. So I think the answer is around culture creation. Right.

Carol Enoch: And I think this is what some operators get, get it really, really right. Some operators don't. I think we've shifted over time in terms of how we see that value creation. But I think the magic is in creating that environment where people can absolutely feel comfortable to say, hey, I know you've said we're doing this, but I wanna bring another idea to the table, or I wanna present a challenge, a challenging idea to you.

Bill Douglas: What I hear you describing is The biggest performance problem is not the property at all. It's the people responsible for it are not working from the same priorities.

Carol Enoch: That's right.

Bill Douglas: Aside from culture, which I'm a big believer in, culture in any business is key to success. Aside from focusing on culture, which is a top-down, bottom-up issue, but the top has to keep repeating it, right? What other tools could you give listeners to help bridge that gap or tell the story about A success you had at a site where people were maybe doing different priorities and you got them aligned?

Carol Enoch: I will tell you about one of my favorite third-party property operators, and I think it's important for people to understand the difference between having owner-operator where it's vertically integrated and where you have third parties. So like our situation where we're an ownership group and then we hire third-party property management. Oftentimes there's a perception that a third-party property manager isn't going to care about your asset as much as you are. You know, all these things. I don't necessarily think that's always true. I think their business incentives aren't always aligned. It's a whole other story. We'll talk about that in a minute.

Carol Enoch: But, um, and I will, I will name the name because it's a compliment and I think they'll appreciate it. But the Mark Taylor Group, they're based out of Scottsdale, Arizona. I was working at an investment management firm in Denver and we owned and were leasing up this just absolutely gorgeous property in Tempe, Arizona and hired the Mark Taylor Group as our third-party property manager. We did not do any operations in-house. We were developers, we were asset managers and investors, and then we hired third-party operators. And Mark Taylor Group is a really special example of a firm that, in my opinion, behaves like owners. Our vice president, Michael Wilson, is an asset, and now he's progressed far beyond this, but at the time, functioned as an asset manager. He was looking at the market, he was looking at statistics, he's looking at the big picture and sharing that with his team members.

Carol Enoch: And so my community manager, my leasing agents, they all understood 360 degrees what it took to operate these assets as if they were their own. And so my, you know, weekly or biweekly meetings with them were much higher level than a lot of my other operators that I worked with because they understood and chose to take it to the next level. And our property performed, we outperformed financially, we outperformed the market. I mean, it was a phenomenal success story.

Bill Douglas: Because you had a property manager that promoted alignment. I love it. I love it. I see that the stories go further than the theory. So I love the fact that you shared your real story.

Carol Enoch: I also had a troubled asset that I took over for a client. We set up our asset management contract based on a percentage of net operating income. So our, our financially, our values were aligned. Typically an asset management fee or property management fee is coming off of gross rent, right? It's coming from gross collected rent. Expenses are not taken into account. I don't think that's fair. I don't think it makes sense. I'm managing expenses, so why wouldn't I be incentivized The same way that the owner's incentivized.

Carol Enoch: Um, and that created a lot of trust with this particular client who we already had a tremendous amount of trust already, 'cause we had an established relationship, but that really leveled up. And then when we sold the asset, the client sold the asset and we helped, not on the sales side, but, you know, on the operations side, um, got a percentage of the value that we helped to create. Which was huge.

Bill Douglas: I've been an entrepreneur most of my life and I always like shared incentive. Yeah. Like if you get your vendor aligned with you, then it's a huge win instead of just paying for one out of maybe the 3 KPIs that matter, like gross rent, like you said. I could share stories, but yours are better because they're about the industry. Uh, you've seen, I mean, not to say you've been around forever, but you've been around long enough to see,

Carol Enoch: 24 years.

Bill Douglas: Okay. So long enough to see ideas come and go. What are we still doing as an industry simply because quote unquote, that's the way it's always done?

Carol Enoch: There's so many things.

Bill Douglas: Um, well, give us 2 or 3 of your pet peeves, the ones that,

Carol Enoch: Staffing structure.

Carol Enoch: Okay.

Carol Enoch: Onsite staffing structure. Um, I think not creating, not, I think we don't treat our operations teams as if they are in a career path. I think we treat them as, oh, that person's a leasing agent. I don't really care if they,

Bill Douglas: I hear that one. Turnover in property management is assumed.

Carol Enoch: Yeah. And, and we can change it if we wanted to. This is a phenomenal career path. It's a phenomenal industry to be in. I mean, housing, you're always gonna have a job. People always need a place to live. It touches finance, construction, marketing. I mean, there's anything you could possibly wanna do aside from like brain surgery.

Carol Enoch: You know what I mean? Like there is, It's such a broad industry that has so many different ways for people to explore their talents, their skill sets. It's phenomenal. And so I would love to see us stop treating it like it's a gig and start treating our teams like they're on a career path and help them grow. That's one of my biggest pet peeves, um, is succession. And that goes on the investor side as well. I can't tell you how many small family offices die or midsize investment firms die because they don't have a solid succession plan and they just assume that whoever the founding partner's kids are going to take over. Well, then they don't want to do it. And so then you end up with this group of people that care.

Carol Enoch: It's not BlackRock, it's not some huge faceless corporation, no offense to BlackRock, but they operate in a different way than a family office would. So then succession planning becomes a part of that on the top end. And we just don't treat it with enough respect on both sides. So that's kind of one and two things that we've always Done. And then I think we disrespect our tenants. I think we treat our residents like they are not the source of our income. And I think that's an issue.

Bill Douglas: I'll agree with that. I have sons that are tenants. I get it in properties like you manage, not that you manage, but you know, they live in different parts of the country and that's what they, because they think I'm in it and I'm, you know, we're doing the technology for it, but we're not in it, but I hear it because I'm their dad.

Carol Enoch: Well, we are, we're a consumer industry and we need to recognize that. Our money is made largely from our customers. We are a customer service industry. Yes, we make money when we sell our assets. We are typically not making the most value because of the physical improvements we've made to the property. Yes, those are necessary to keep them from falling down, but, but people are paying rent and those are our customers. So we are doing all of those things. We are making the physical improvements.

Carol Enoch: We are making the operational improvements for our customers so that they pay us money, which is what creates the net operating income, which the bank looks at to assign value to the property. I mean, I don't know about you, but I've never seen a vacant property make money.

Bill Douglas: No, not operation or sale. Yeah.

Carol Enoch: So, you know, maybe, maybe holding over time with, with, so that's a lie. If let's say you hold, you bought a plot of land 45 years ago and it appreciates.

Bill Douglas: Well, by property, I thought you were talking about,

Carol Enoch: A physical property.

Carol Enoch: No.

Carol Enoch: Yeah.

Bill Douglas: Yeah. Not a land investment. Yeah, that's different.

Carol Enoch: Well, because the property is depreciating, it's a liability, not an asset. The land is the asset.

Bill Douglas: And you have the taxes on it and then you have the maintenance on it when the maintenance is skipped. So that creates a cascading downward spiral. Where has the industry created unnecessary complexity?

Carol Enoch: Tech stacks. I think that, yeah, I think,

Bill Douglas: Well, we talk a lot on this show, almost every visitor on the show that especially the operators, asset managers, owners talk about not having a, like, well, we talk about it too. You build a building, you hire an architect and you hire an engineer, but the technology is largely ignored until 90 days before TCO. And then everything just comes at it, especially when property management shows up and realizes that it's not been architected and not been engineered. That's how buildings end up with a dozen networks when they need 2 or 3.

Carol Enoch: That's right.

Bill Douglas: That's how there's that thing with blinking lights in the closet and nobody knows what it is. Where's the data for it? I don't know. Don't even know what it is that sometimes we think that we're, we see things that were bought and never turned on. Sometimes they're turned on, never optimized. Sometimes nobody even knows what it is. It's never documented, but somebody bought it once. So like, I, they're the listeners will hear me and I know you agree, but architect this, have a strategy, this being technology, anything digital should have a return on your investment. It should not be an expense.

Carol Enoch: That's right. And I would say the biggest mess is in the operations systems tech stacks, like in our tech stacks that we use to run our businesses.

Bill Douglas: The OT side, we call operational technology side.

Carol Enoch: They don't talk to each other. They, you know, like our, I think probably my biggest pet peeve right now is that I pay for my own data to get my own data back. And then I can't even get it in a format that I want or that makes sense. Drives me nuts.

Bill Douglas: That makes my pulse jump just hearing it. Uh, we, strongly believe and even put it in the book, it's your data, own it. Like, it is possible to own. We had a data privacy lawyer on the show. We recorded it last week. And he said that those are the most egregious contracts when the vendor says, I know you generated it, but I have a license in perpetuity. And he was morally offended by it. He said he's been fighting it for years.

Bill Douglas: And most operators either haven't read it or don't worry about it because they think the solution's going to fix their problem. But the data being siloed is awful. The data being used by somebody else in perpetuity is even more awful for your tenants, but you're, you're not able to optimize or monetize it. So,

Carol Enoch: no, I mean, I can't even get the data that I need to do my job and have confidence that it's accurate right now. I've got operators that are going back to using spreadsheets to track data because they use one system for their property management software, one system for their applications, one system for their CRM. They don't talk, they don't trust the data, so they keep these little list. And I'm like, well, I don't trust that because that's manual data entry. So then I'm left trying to make business decisions with data that I don't have confidence in. And it's terrifying.

Bill Douglas: There's been a trend for the past 5 years of let me give you a dashboard or a single pane of glass. Like, I was at a trade show last week and I heard somebody on stage say, if I hear that again, I'm going to throw a book at you. Like, I don't want a single pane of glass. I want usable data that has actionable intelligence buried in it. So I spoke at the conference and that's what I talked about was if you own your data, then you can find the correlations, the algorithms, you can optimize utilities and insurance and rent. Those are the big 3 to start with and then everything else. But when I hear people like you say you don't have access to your own data, it just offends me. It is a solvable problem.

Bill Douglas: But the fact that we got here is we start out the book, right? Because this is how the whole story, I was talking at Blueprint a couple years ago and I Who in the audience thinks that Amazon would ever let another company come put a network in their building and mine data out of it that Amazon did not own? Nobody raised their hand. And I immediately said, well, why do you do it? And some... somebody said, we don't do that. I said, okay, tell me where, yeah, tell me where your ISP contracts are, your access controls, you know, your lighting controls. And I went down all the control systems that are OT. It's like, where are the systems? Who owns it? Who owns the network itself, the devices? And where most importantly is the data? And then every hand went up and said, oh, we are doing that. I walked off stage and somebody said, you should write a book about it. So that's where the book came from. But that's such a common problem.

Bill Douglas: We think it's normal in this industry and it's not normal for almost every other industry on the planet. You think Toyota would let you do that in a manufacturing facility? No, it's their data. They would own it and optimize it. And we can too here in commercial real estate. We can, it is fixable, but not without effort. You can't buy a point solution and have it done. It's a strategy and a, and a, and a decision to make around digital and data. So,

Carol Enoch: yeah,

Carol Enoch: that's right.

Carol Enoch: And I think

Bill Douglas: I get a little passionate about it. Sorry for talking too much.

Carol Enoch: No, no, I love it. I mean, and for us, I think it's, it's less on the building system side and more on the operational software system side. It's Yardi, RealPage, Onsite, you know, AppFolio is actually one of the better ones in terms of when you're locked in, you've got access to all your own data and try, you know, all Entrata, all that. But even those companies, I can't get the data out necessarily in a way that I want without writing a check.

Bill Douglas: You can, and it's possible, like, but Those are just the PMS systems and those are core. But what about the other dozen systems that run an average-sized property? I mean, the problem you identified is big and it just compounds with all the other offensive, egregious contracts assigned to people that you're paying every month. So somebody asked me last week on stage, what advice would you give everybody in the audience? It was commercial real estate owners. And I said, Go ask your vendors tomorrow. Tomorrow, just look them in the face and say, if I replaced you, what do I own? And then like, what systems, what sensors, what data? And if they say the data is yours, say, do I have login credentials for it? And is this in writing? Or is it just because the salesman wants to satisfy you? Right. And he or she is not misleading you, but they'll tell you, yes, it's your data, but how do I get it? So you're not, I'm not advocating you go fire the vendor, but ask the question, if I replaced you, what do I keep?

Bill Douglas: Start there and then, and then say, where's my data?

Carol Enoch: I was negotiating a managed Wi-Fi contract and there were a couple points that we just could not get past. Um, and one of them was that they would not outline in the agreement what infrastructure we owned. And they kept putting it in the notes or they're like, oh, per our conversation, like I want it in the agreement. So fun fact, which I don't know if you knew about me, I used to work for an attorney. My first property management gig in Chicago, I worked for a couple. He had a background in mergers and acquisitions and she was a corporate trial attorney in Texas and they had decided to start a property management company. And so Kelly Hills was running this property management company, but she has a law degree. She's very smart.

Carol Enoch: Um, and I will tell you that I have learned, I learned so much working with her and for her, and I have a little bit of an edge when it comes to contract review, right? And so the way that I approach contract review is if, if everybody that negotiated this contract died, could anybody pick it up and understand what we agreed to? Right. And I don't, I don't like it when people are like, well, just per our contract. And I'm like, nope, that's what the agreement is for. Contracts are really, really important. And so this group just would not put that in writing. They also, they also had an agreement that we had to fix any issues same business day that was impacting their operations. And I was like, well, I can't agree to that. Gosh, if I could agree, Bill, if I could agree to same day, fixing of any issue, I wouldn't... you and I would be out like sailing around the world.

Carol Enoch: Like, what? Why? I would,

Bill Douglas: You'd make a lot of money.

Carol Enoch: I would be the queen of property management. I was like, I can't do that. I can't promise. They're like, well, that's standard in our agreements. I was like, but I can't promise that. And so we walked away from the contract and I think they were pretty surprised, but I was like, those are just basic. I'm not going to sign something that I can't promise.

Bill Douglas: We've had clients come to us at the end of those 7, 10-year agreements, however long they are, the bulk agreements, and say, do I renew it? Do I continue with it? And, or, or do I get the asset transferred? And they can't even figure out where the handoff is between what's owned by that utility and where does it transfer? Like how far does it go into the unit or does it stop at the closet? Does it stop at the fiber node? Like where? And those all should have been outlined in the document and they're not because Back it up 10 years when the property was being built, somebody just needed an easy button and they pushed the easy button and somebody came in for free, even though you had to wire it and it's not theirs. The same thing is happening with data. Like it's great, it's easy, it'll optimize my lease-ups, but then all of a sudden they own your data. Like, wait a second, I don't want you to own my data. I want you to help me optimize it. I'm paying for your tool. And these vendors are all saying, We're your AI partner. Well, to have AI, any firm in commercial real estate needs to have control of their data first, regardless of what you want to do with it.

Bill Douglas: You can't do anything without the data. AI lives on data, but it also fails on data. So think deeper. And we talk about it on the show all the time. Think deeper. Like, what's my digital infrastructure? What data do I own and not own? And where is it? How many silos of data are out there? How do I collect them so I can start to coordinate my systems?

Carol Enoch: Yeah, it's really interesting because I think for those of us on the asset management side and partially on the operations side, I would say one of our biggest struggles is the SaaS data that's in our CRM, in our property management software that gives us the information, the application numbers, the lease trade-outs, all of that. That is one of our biggest struggles because as these new solutions have come out, they're very siloed, to use your word. And then all of a sudden you've got 7 or 8 that are necessary to get you all the information because there's not one system that can get us everything that we need or will get us everything that we need. And what I don't think any of us were thinking about 20, 30 years ago when we signed these initial contracts with our primary property management software providers, I don't think these conversations were happening on a scale as broad as they are now. Maybe some people were talking about it, but we're stuck. Like I, Yardi's contract is with our operators. It's not with me, right? So if,

Bill Douglas: Oh, interesting. Okay. Mm-hmm.

Carol Enoch: Right? So like, that's a whole... and like, who's gonna incentivize Mr. Yardi to give me my data, right? Mr. Yardi's a dude.

Bill Douglas: Benjamin Franklin.

Carol Enoch: That's right. And so, you know, understanding that we've got these MRI, Yardi, RealPage, all these, Entrata, all these big systems that drive the majority of our operational business. I would like to see us digging more into what do we really own? What do we really have?

Bill Douglas: Yeah. Well, that's why I was so happy you were going to come on the show because that's the core of the book is do you own your digital infrastructure? Meaning networks, systems, sensors, everything. Whether it's cloud or not, doesn't matter. Physical or virtual, doesn't matter. And do you own and control the data that it produces? Because that data is yours. I'm not talking about the personally identified information of your tenant. I'm just talking about your tenant anonymized, like lease for 101, lease for 102. Like, how am I really optimizing this? Or I'm just trusting that I can look at a dashboard and think it is, you know, all the lawsuits aside from the past couple of years about optimizing rent.

Bill Douglas: I'm not trying to go down that path. I'm just trying... could you look at the correlations between your lighting control system, your access control system, and your leasing system to see how you could optimize space better? The answer 100% of the time when I ask guests is, no, I can't. Well, you can. It takes some change and it takes a strategy, but it is doable. And I'm hoping the industry is going there.

Bill Douglas: Yeah.

Bill Douglas: We have plenty of clients that are, but they're by no means the mass of the industry.

Carol Enoch: No. Well, I think

Bill Douglas: they're the early adopters.

Carol Enoch: Yeah, I would agree with that. And I think that for better or for worse, there's a lot of folks that are strong operators that build really great systems and they have a hard time changing, right? I think a large part of our industry thrives on standard cycles. And so, you will have a lot of leaders that aren't, they don't want that disruption. They don't want the disruption of changing a technology stack. They don't want a disruption of changing, you know, an infrastructure, a piece of their infrastructure. We are not a very flexible industry. And I think that we could be.

Bill Douglas: I think parts of it are, but strategic Relative to data, digital, and technology, I would definitely say the industry is not.

Carol Enoch: Yeah, I would

Carol Enoch: agree with that.

Bill Douglas: They adapt to things very quickly. Like if tenants start doing things, buying things differently, you know, if the consumer changes, this industry adapts fast, but not around technology. Would you

Carol Enoch: agree with that? I would say that they're slower than you would think.

Bill Douglas: Okay. So you are agreeing with it. Yeah.

Carol Enoch: I would say, no, I would say I'm agreeing and disagreeing in that I don't think that there's an area that we really adapt quickly. So let me give you an example. Short-term rentals like Airbnb, VRBO. In multifamily, about 10, 15 years ago, owners and operators started realizing that their residents were maybe traveling on the weekend and putting their homes, their apartments on Airbnb. And they're like, well, this is terrible. We've got strangers in our building. This is a huge risk. We can't do it.

Carol Enoch: So immediately, so maybe this is where they did react quickly. They're like, we're putting clauses in all of our lease agreements saying no Airbnb, stop it right now. I saw that happen and I went, well, uh, we're apartments. We are short-term housing. 12 months is not forever. That's our standard lease agreement because that's what cycle the banks work on. But that lease agreement wasn't built out of any kind of thought of what our residents wanted or what consumers wanted. That's because banks like a 12-month financial cycle.

Carol Enoch: Um, but we do short-term leases, 6-month, whatever. I was like, so who cares if it's a day? Now granted, there's hotel tax and there's all that stuff, but where other people saw a challenge that needed to be stopped, I saw an opportunity, but I'm like, what if we like get involved. Like, yes, I agree about the risk factors, right? I've been an operator. I've lived where I've worked. Do I love the idea of strangers that haven't been screened, that I don't know who they are running around my building? No. But what I'd rather do than tell people no, understanding they're going to do what they want anyway, I'd rather be a part of it. I'd rather be a part of the solution. I'd rather have the level of control that I need.

Carol Enoch: So I started working with Airbnb just having conversations with them around like, hey, I'm a multifamily, you guys are trying... like, I know my residents are utilizing you. My company said no, but like, can we get to a place where there's something that works? And I'm not saying that I did it, Bill, because I didn't, but there is now an Airbnb landlord-friendly program where they have developed specific infrastructure and protocol around, okay, if you're an owner that's comfortable with this, you get a cut of the profit. You get... if you have one issue, noise complaint, whatever, you can take that person's ability to rent out their home away from them, right? So now we've moved towards allowing this to happen, but it took about 10 years. So yes, we move quickly, but it's often on the risk side and it's often just to say no. Start with no. Start with no.

Bill Douglas: Well, I think my closing question, I mean, I know what it is, but it's not related to this topic. So I want you to think higher level, right? If you could look 5 years ahead, what do you think the best multifamily operators will be doing differently than they do today?

Carol Enoch: I think they will have as comprehensive one, like vertically integrated technology stack. That's what I think they'll be doing. And I think that they will have comprehensive training plans. And I think that they'll really be treating this like a career and not a gig.

Bill Douglas: So the technology track intrigues me greatly. I bet we could have a whole nother show on that, but I love your passion for the people because we visit a lot of sites and the best sites are the ones that don't... I don't care what they look like, but when you walk in, they feel great. And that That's due to the property management team. Like we were at an asset, I don't know, 3 weeks ago and they had a cat that they brought in from the street and the tenants are walking through to get their mail and they're talking to the cat and giving it a treat. And it just felt like a bunch of millennials were hanging out. They weren't college kids, they were professionals, you could tell, but it had such a cool feel. Because the property manager had worked there, long enough and literally knew the people that were walking in the door by name. And the asset manager had sent us to the property and they worked extremely well together.

Bill Douglas: They respected each other and understood their language. So I didn't start out with that story. I started out asking you, but everything you've said makes it work well. We saw in person, like, and it stood out from the other dozen properties we visited this quarter. So,

Carol Enoch: and when in residence, Can tell that we are human. We are looking for a home. This is not cryptocurrency. This is not, you know, we're not structural engineers. Like this is, we are building people's homes. So there is a softness to it. There's a warmth. There are things that are critical that make people stay beyond, oh, I have a smart lock.

Bill Douglas: She had a very high close ratio, the property, the head property manager, the one in charge. Very high close ratio for the people that walked the property versus the ones that just virtually looked. And, you know, because there was a brand new property going in next door and they were losing some, but if people came in and walked it, they closed. Yeah.

Bill Douglas: And because just like I saw it, the next tenant saw it.

Carol Enoch: Right. So this is where we have this idea that you have to have a leasing agent to close a lease. And I think that's not true. I think you have to have a good closer to close a lease. I'd rather a virtual tour, a self-guided tour than a leasing agent that doesn't care or that doesn't understand the property. Because a leasing agent can lose you a deal.

Bill Douglas: This property didn't have a leasing agent. The property

Carol Enoch: manager,

Carol Enoch: The property manager.

Carol Enoch: Yeah.

Carol Enoch: Yeah.

Bill Douglas: The property managers were all trained, so they all did leasing. It was an interesting... it was several hundred units. It was not small. But the property managers, any one of them could do a walk and could walk through it and like they were doing the leasing. It was one and the same.

Carol Enoch: Perfect.

Carol Enoch: That's ideal.

Bill Douglas: I saw it as beautiful. Carol, this is the point in the show where we shift from talking about the industry. We could have another hour-long show sometime. We probably should, to talking about you so the listeners can get to know you. We call it the extra floor.

Carol Enoch: Oh, I love it.

Bill Douglas: And I'll, you know, lightness because commercial real estate. We're going to ask 3 questions. You just answer them. This is not conversational. This is so the audience gets to know you. What's the best piece of career or life advice you've ever received?

Carol Enoch: Um, if you wouldn't do it for free, don't do it.

Bill Douglas: Oh, I like it. My brain is thinking like I've not heard that one before. Okay. So what's one habit or practice that consistently makes you more effective?

Carol Enoch: Hiking. Or being outside, just being with nature, being human.

Bill Douglas: Hmm. I concur. Are you, this one's complicated. Are you an early bird or a night owl?

Carol Enoch: Early bird for sure. Not even complex at all. If it's after 8:00 PM, I'm in soft pants. You can call me, but I probably won't answer.

Bill Douglas: The brain's turning down. Oh, I respect that. You have to protect yourself, protect your time. You know how passionate I am about life's a gift.

Carol Enoch: Yeah.

Bill Douglas: It's not meant to be worked. Right. I mean, it is meant to be worked, but that's not my identity.

Carol Enoch: Yeah. I will share, I'm going to share an extra story that you didn't ask about. So growing up, my dad, who's an actuary, so statistician, you know, corporate job. Um, and I did not realize until I became a working adult how important this was. Anytime I called him, he would answer the phone every single time. So if I called him, he'd be like, hey, is everything okay? And I'd say, yeah. He'd be like, cool, I'm in a board meeting. I'm going to call you back.

Carol Enoch: So then as an adult, I'm now, I'm now finding myself in these rooms and understanding how impactful that is. And I still do the same for my family. I will always pick up the phone. It might be super quick. Hey, is everything okay? Yep. Just calling to chat. But for those times where they say, no, it's not. You're never going to regret picking up that phone ever. Not once.

Bill Douglas: Yeah. My brain is going through the last time I got one of those calls that nobody wants. Yeah. And I answered it. So glad I could. Carol, how can our listeners contact you? This will be on the show notes page for all the people that, and every episode has its own webpage. So, but for those that are just listening, how can they contact you?

Carol Enoch: My LinkedIn is just Carol Enoch. So my name, my email address is Enoch. So my last name, enoch@bridgepartners.com. And my cell phone number, don't abuse it, is 773-512-8559. I do turn it off.

Bill Douglas: It's okay. You are the,

Carol Enoch: You can text or call. I don't care.

Bill Douglas: out of 55 guests, you're the 3rd one that's left their cell phone. So you are special. Yeah. Well, thank you, Carol. It's been a pleasure. I, I, we probably should have a follow-up episode. I forgot to say at the beginning of the episode, Drew is on the West Coast at a client site. So I did this one solo and I didn't worry about it at all because I always like talking to Carol, but when we do the follow-up, we'll make sure Drew is here.

Bill Douglas: So thank you, Carol. Thank you to our listeners. And as I said at the top of the show, like, follow, subscribe, click the bell. So when you know a new episode comes out, And help us get the word out about changing this industry to be data and digital friendly. We'll see you on the next episode of Peak Property Performance.