Finance & Economy

Real Estate

“Systemization is the key to execution” :CEO Steven DeFrancis on the immense growth of Cortland

August 18, 2021

“Systemization is the key to execution” :CEO Steven DeFrancis on the immense growth of Cortland

Steven DeFrancis

CEO of Cortland Partners

As a top 50 apartment owner and operator, Cortland has a brand and reputation of success and customer service.

As a top 50 apartment owner and operator, Cortland has a brand and reputation of success and customer service. On the latest Walker Webcast, CEO Steven DeFrancis joined us to discuss his strategic approach to systemization, his focus on building a stellar team, and his approach to growth.

In this episode of Driven by Insight, Willy interviews Steven DeFrancis, the founder and CEO of Cortland. Since its founding in 2005, Cortland has expanded into a global, vertically-integrated multifamily real estate investment, development, and asset management company. It is anchored in providing a beautiful yet affordable living environment and an enriched lifestyle to its residents. To this end, the company has developed a unique approach of internalizing the majority of its functions.

Steven and his team manage a portfolio of multifamily assets located in 11 states, primarily in the Southeast, Midwest, and Texas. Cortland is the largest owner and operator in the cities of Atlanta and Dallas, as well as in the entire state of Texas. The company employs more than 2,000 associates; it also owns and manages over 65,000 units, with a pipeline that will push this number to over 70,000 by the end of the year. Cortland is a National Multifamily Housing Council top 50 owner and manager, and was ranked as a top US brand by Steven himself holds a BA in Real Estate from the University of Georgia’s Terry College of Business, and he is a member of the Buckhead Coalition, the board of the Atlanta Neighborhood Development Partnership, The Real Estate Roundtable, the Urban Land Institute, and the National Multifamily Housing Council.

As the conversation gets underway, Willy looks back to the founding of Cortland as a small development firm focused locally on Atlanta, noting that the company shifted its approach during the financial crisis of the 2000s. What did Steven and his colleagues see, Willy wonders, that led to the shift? Steven explains Cortland’s decision to invest in research into where the market was going as the recession continued, and about the company’s pivot in terms of clientele and customer focus. Cortland turned to insourcing, too, to control all touchpoints with customers.

This long-term vision, in turn, drove all areas of the business, from hiring to design. Cortland developed an associate-first culture, which is needed for excellence in customer service. While the recruitment process is rigorous, it yields a workforce well suited to particular jobs. The vision also prompted a focus on brand. In part, the Cortland brand developed naturally through the company’s consistency of assets; however, the company has also intentionally worked on its brand in order to create passion among human capital and help with marketing.

Next, Willy and Steven dive into more detail concerning Cortland’s consistency of assets. Cortland has processes in place to provide a high level of standardization across its business; this allows, for instance, residents to count on a certain standard of fit and finish across properties, and property managers to easily transfer between locations. Much of the company’s systematizing is preventative maintenance, but Steven and his colleagues also realized years ago that, while not everyone can afford a very expensive home, nearly everyone has pride in where they live. So, Cortland decided to provide consistently high-quality living spaces at affordable costs.

In order to accomplish this goal, Cortland began to vertically integrate. By progressively cutting out middlemen, standardization became easier and costs lower. Over time, Cortland transitioned to having direct relationships with manufacturers in China; these relationships help Cortland to navigate any supply chain issues that may arise, including those that have arisen from the COVID-19 pandemic. Right now, as the pandemic has been waning, it is a very competitive market. Steven believes that Cortland’s model is only improving, and he explains that the team dynamic of the company allows for the underwriting of a lot of new opportunities.

There are, of course, opportunities that Cortland could take to move into other asset classes within multifamily housing, or even different commercial real estate classes. However, Steven hasn’t considered expanding beyond housing. He has looked at other product types within housing, and his main aim in each market is to achieve the desired asset base and scale. Brand and associated SEO realities in the market today drive traffic, and they tie into the customer-centrism of the business. After all, as Steven says, Cortland is at heart a consumer-facing operating business that happens to need capital, not the other way around. To wrap up the conversation, he and Willy talk about the best and worst of leading the company now versus earlier in its life.

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