Essex Property Trust Retains Strategy After CEO Succession

“We get a lot more information with technology, but does it help us manage better? Our management time needs to be focused on issues, not data,” Schall says.

“We get a mountain of data, and clearly we need to sort through it so that critical information is identified: What are the struggling properties, what is the cause of the problem, and what is the appropriate action plan? Time is your enemy: Vacancy is lost forever, and multifamily enterprises are like battleshipsthey don’t turn on a dime. Technology will continue to help us in productively handling ­information.”

THINKING AHEAD

Locating larger deals and forming relationships with new capital partners, oddly enough, will be the purview of Guericke, who remains with the firm as vice chairman of the board and as a consultant (see “A Gradual Retirement” on page 34). Upon his return from the Philippines, Guericke will likely work two or three days a week for the REIT, but will not attend senior management meetings and has even moved his office into a satellite building on the firm’s small Silicon Valley corporate campus.

“We held a company-wide webcast to broadcast to the entire company this transition,” Guericke says. “We want to make sure everyone knows that the philosophy that has been painstakingly developed is going to stay intact. Acquisitions and development were very important to grow this company over time, but today, the driving force is going to be top-notch operations and driving every nickel to the bottom line that we can. That is a change in focus that I think Mike is going to execute, and I think he will execute it well.”

Schall indicated as much on the firm’s 2010 fourth quarter and year-end earnings call, highlighting the criticalness of ongoing property operations improvement during the multifamily sector recovery and the shared, common view of Essex’s strategy and direction that should have Essex watchers expecting the firm to remain on a similar path as under Guericke’s leadership. Currently, the company’s portfolio has an average financial occupancy level of 96.4 percent, besting the industry average of 94.5 percent by almost 2 percentage points.