The following Q&A was completed as part of our conversational Commercial Real Estate FAQ Interview Series, we hope you find it helpful.
Sometimes it’s not the concrete metrics that drive your business forward, but the intangible bits and pieces that need to be measured in a less precise way. How you nurture your professional relationships, how your tenants feel about the business you’re running, and whether others want to work with you are all just as important as any concrete metrics that may be measured physically. There is quite a bit that goes into success and it pays to know just how to measure each facet.
Richard Wilson: Related to measurements, what are the metrics that really drive the success of your business there at the Beach Company?
Leonard Way: Well, we pride ourselves on our reputation and that’s an intangible, right? So yes there’s metrics for the dollars that can be achieved from the development, the management, the value creation processes, those are easy to measure there. We do use those metrics to determine whether we wish to buy something, develop something, and the like and then how did we do at the tail end of it? We’re very happy with those results. But what we really try to measure are the intangibles. We go back to our company motto – making the world better one awful place at a time. Well, how do we do that? To us the key metrics here are relationships – how do I measure that? It’s very tough to do but you have to ask yourself simple questions. Do your residents and tenants choose to renew their leases with you? Are our investors continuing to invest with us? Are your venders, your lenders, your brokers pleased to work with us? And are the stockholders happy with the direction of the company? And then have we done right by our employees? It’s one of those intangibles you don’t know exactly how to measure it, but you know when you get it wrong. And every time we think we may have started to get it wrong we will re question ourselves and get back in line there. You know, over our 75 year history the company has succeeded first and foremost by not always being bottom line focused. We strive to do the best we can by everyone, and that strong positive reputation will pay dividends towards having a profitable enterprise.
Richard: Right, great.
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