The approach pushes the company forward without losing sight of the practical considerations. “Steve is a fire hose of ideas,” says Schwarz, “but he also respects that people have to get the ideas down to things that work.”
2. Manage that ego.
Certainly, LeBlanc has the trappings of a CEO. He drives a BMW and carries a Blackberry. But the 47-year-old multifamily executive doesn’t necessarily display the ego one might expect. “He’s a mild-mannered guy who gets the job done in an industry of big egos,” says William D. Sanders, co-chairman of Verde Realty in Texas and founder of Security Capital Group, where LeBlanc worked earlier in his career.
It has made a difference at Summit, where senior managers say they can respond honestly to their CEO’s suggestions, whether their comments are positive or negative. “The danger with top executives is that the emperor needs someone to tell him when he doesn’t have any clothes,” says Ell, “and the best thing about working with Steve is that he takes that better than anyone I’ve ever seen.”
3. Learn from the best.
Perhaps LeBlanc learned that openness at Security Capital, the virtual training ground for multifamily executives where he worked in the 1990s. He certainly embraced one hallmark of that company’s philosophy: the open office. Even as the CEO of a nearly $2 billion company, LeBlanc works in a cubicle. “How many CEOs do you know who work in a cube?” he asks with a smile, walking from the smaller closed-door conference room he uses for private meetings. It’s a large cubicle, certainly, but it’s still a cubicle, with partial walls, an open doorway, and Summit’s standard office furniture.
Katherine Lambert His former employer approves. “You learn in an open environment,” Sanders explains with unexpected intensity. “You learn and you teach.”)
LeBlanc learned other things as well. “Security Capital and Archstone both taught me the importance of strategic planning and capital allocation,” he says. “I learned about the importance of building a fully integrated operating company.”
Also on LeBlanc’s resume: multifamily powerhouse Lincoln Property Co. “Lincoln Property gave me an opportunity in 1984 to be a partner when I was only 26 years old and inexperienced,” he recalls.
That certainly wasn’t the case for long, as he learned how to develop multifamily communities, raise capital, and, in the Texas real estate depression of the 1980s, do workouts on troubled properties. “I am proud of the fact that I built apartment communities in the ’80s in Texas and broke even,” he jokes.
4. Lead for the future.
Experiences such as those prepared the young executive for the job at Summit, which hired him as COO in 1998 and promoted him as planned to CEO in 2001, when Bill Paulsen stepped down.
It was in many ways a challenging time for Summit, irrespective of the rental market. “We were like most REITS,” Adzema recalls. ” We were a private company in a public company shell.”
It showed. “Summit started out as a compilation of assets developed when it was a private company, and it grew beyond its base,” says Stephen Swett, a Wachovia Securities analyst who has covered the company since 1998. With properties scattered across 22 cities from Charlotte to Dallas, Richmond to Raleigh, and Newark, N.J., to Indianapolis, Summit was both too big and too small.
Enter LeBlanc, who proposed positioning the company for the future by slicing the company’s 22 markets to five. “We wanted to be a fully integrated real estate operating company, with development, operations, construction, and management expertise in every market. We wanted economies of scale and branding opportunities. You can’t do that if you’re all over the place in different markets,” explains LeBlanc, who also wanted to dramatically boost Summit’s presence in Washington, D.C., and Southeast Florida.
It was a difficult process for Summit, which took a few hits on its self-image and its sold properties. “It’s always painful to leave a market,” says Adzema, “because once you say you’re exiting a market, everyone knows you have to sell those assets.”
But the plan proved its worth after the tech bubble burst in 2000 and the apartment industry began struggling. “Class A properties have been hit very hard with interest rates and the for-sale market, but we have weathered the storm really well,” says Schwarz. “It’s all starting to click,” Adzema agrees.
LeBlanc has left his mark on the company in other ways as well, pushing for better uses of technology. “Steve and Summit were one of the first companies to roll out credit screening online. They started revenue enhancement early on,” says R. Scot Sellers, chairman and CEO of Archstone-Smith, whose history with LeBlanc goes back to Lincoln Property and Security Capital. “He is willing to look at the business in a different way than the old-school mentality.”
One of the results of that is Summit’s daily pricing system. Introduced in 2003, the program gathers data about occupancy, unit availability, and vacancy rates, analyzing it to produce market-responsive rents daily. If things are tight, rents will go up; if the market is softer, rents will go down. The logical, efficient system has helped Summit drive revenue and maintain high occupancies during an undeniably tough market; from 1999 to 2003, Summit’s yearly average occupancy rate never dipped below 92.9 percent.
Technology has also helped Summit gain financial control and efficiencies in purchasing. In 2002, the company rolled out iSave, a Web-based system that allows on-site staff to shop online for light bulbs to new carpet, ordering what they need from chosen vendors. The program has saved time, of course, but also millions of dollars.
LeBlanc has also encouraged simple solutions to property management issues, such as staggering lease expiration dates rather than always writing leases for a precise 365 days. “We create our own inventory problems when [leases for] 17 one-bedrooms expire on the same day,” says LeBlanc. “If we can reduce the average number of days vacant per apartment home, we can generate over $500,000 in additional revenue annually.”
5. Challenge your people.
Regardless of the decision, though, it’s pretty certain at Summit that it was preceded by heated discussion. “I love the debate,” LeBlanc admits over lunch, his animated exclamation temporarily breaking his polite but friendly reserve. “It’s how you get to the best solution–as long as the debate stays respectful and focused on solving the problem.”
It’s one of the ways LeBlanc both challenges his management staff and tests their commitment to an idea. “He wants people to state a position, but he wants you to defend it because then he feels confident that you are passionate about it and will follow through on it,” Ell says.