The Bell Footprint
Bell Partners maintains a focused geographical footprint.
Though Greensboro, N.C.–based Bell Partners’ portfolio reaches out to Columbus, Ohio, and Boston, its greatest concentration is in what president Jon Bell calls the “Southern Triangle”—the block of states from Texas to Maryland to Florida.
“We’re focused on having a deeper presence in our target markets. We expect to expand, but we will not do so merely for growth’s sake,” Jon says.
To move into a new market, the company needs critical mass. Of course, with a growing third-party management platform, it’s easier for Bell to gain that management mass by picking up new contracts. “We’re one of the largest landlords in Atlanta, Charlotte, and Raleigh, and the 10th-largest apartment management firm in the United States. Given our size, we have a competitive advantage that allows us to access current in-depth research within our markets,” Jon explains.
Bell used that intelligence a lot in 2010, buying more than $300 million worth of assets. It focused on properties that were anywhere from five to 15 years old. “They’ve been very focused on quality,” says Malcolm McComb, vice chairman of investment properties for the multihousing group in the Atlanta office of CB Richard Ellis. “They’re looking to assets that are in high demand by renters and have the locations and physical attributes that will be a great [draw] in three years, five years, and 10 years.”
Bell doesn’t have a magic number of units that it wants to get to. Instead, the company wants enough critical mass to obtain pricing power in its markets, have continued buying power, and provide mobility for its employees. “We want to maintain a critical mass to continue to attract and retain great people,” Jon says.
When Jon joined the team, Bell managed 10,220 units. By 2008, the firm’s holdings of assets owned and/or managed swelled to 61,000 units. In March of that year, just as the economy was falling apart, Bell partnered with New York–based DRA Advisors, an institutional investor with national holdings, to buy 25,684 units in 86 properties across the United States for $1.71 billion from Denver-based REIT UDR. “To take on 86 properties and add 600 employees in one day is a massive challenge,” Steven says.
The company prepared for the overnight expansion by holding conference calls with these employees and doing lots of on-site preparation, particularly on the technology side. While the integration was hard, it also made Bell a stronger company. UDR had its property operations on Carrollton, Texas–based RealPage’s OpsTechnology and YieldStar systems (which moved all 86 UDR assets onto the Bell system in just six weeks). Bell rolled out the rest of its portfolio on those same platforms in 2008. “UDR is a strong company with solid practices that we were able to build upon,” Jon says.
Best People, Best Practices
After closing on the UDR deal, the Bell management team looked inward, trying to get a handle on where exactly they wanted to take the firm and what their goals were. They knew they would need to look for talent and guidance from outside, however, to do that.
The family hired Los Angeles–based consultancy CEL & Associates to help it pinpoint its long-term goals, home in on its core competencies, and plan the eventual succession process from Steven to Jon and Durant. “I think they’ve done a great job,” says Chris Lee, CEL’s president and CEO. “Steven has enthusiastically supported the transition to Jon and Durant.”
