Captive Management Realty Management was formed to manage the assets acquired by Ross Development, which was founded in 1983. “We were what you might call a captive management,” says Ross. “Scott felt the needs of the communities and the needs of the ownership would be best served by my involvement.”
She had been in real estate since 1973. “I understood the markets, marketing, sales, project management, construction management, and value creation,” Ross explains. “That’s why the property management company was started.”
Ross was very content managing Ross Development’s assets. But the company was slowly gaining a region-wide reputation for its remarketing and remerchandising efforts.
While most in the real estate market saw business decline in the early 1990s, Realty Management continued to grow. Owners evaluating their property management companies during this time turned to Ross’ firm. The timing was perfect because the acquisition business was soft. She realized third-party management was a key to growth.
“Because of the reputation we had acquired, we were being asked to look at communities, make assessments, and make some recommendations,” explains Ross. One of those owners was Federal Realty Income Trust, the owner of Rollingwood Apartments, in Silver Spring, Md.
Federal Realty Income Trust, a shopping center real estate investment trust (REIT), decided that it wasn’t in its best interest to continue managing a single multifamily asset – which had a 15 percent vacancy rate in the fall of 1992.
Getting the deal was similar to the story of David vs. Goliath, recalls Ross. “We were a small property management company competing against two giants in the Washington area.” The company won the contract because it knew what needed to be done and offered a tremendous amount of detail in its management proposal. “In six months we had a waiting list,” she recalls.