The profitable business model Westland has been using for over 40 years would today be described as “sustainable.” We didn’t call it that when we set out to re-energize neighborhoods and maintain affordable housing that had been left to deteriorate physically and had poor management. Foundationally, we’ve always been about recycling, upcycling and sustaining buildings to the benefit of the residents, then the neighborhoods, and when we get all of that right, to the benefit of the investors who put their capital into our projects.
This also happens to be the cheapest way to help with affordable supply in a housing market where supply and demand continue to grow further apart. All these years later, our business model is still smart and continues to fill a growing need. When I think about the keys that have made us successful throughout market ups and downs over many decades, a few things come to mind:
Westland pays close attention to primary elements affecting our business plan. Certainly this includes macroeconomics and demographics, and we often write here about those trends. However, we really live or die based on the microeconomics and demographics of the communities we invest in.
We have always made sure we are financially able to stop bringing new ventures on when they don’t seem viable. It sometimes takes a moment to reassess which way the wind is blowing. We have the patience to wait when making big decisions. This patience has saved us from making critical mistakes countless times over the decades.
One age-old adage you always hear about real estate is: “There are three things that matter in real estate: location, location, location.” For investment real estate, I’ve found that’s naive and short sighted. Instead, I think about “Location, Timing and Management,” with management being the most critical. Good management can mitigate poor location and timing; however, good location and timing can be destroyed by poor management.
Staying close to property management is where we learned how to be smart investors and to guide the business housed in the property. Property managers deal directly with our residents. They are the king we serve, because that;s who pays the bills, mortgage, payroll, taxes,etc. – and only then, a profit, if management gets it all right. Having close control over property management is essential for success. The portfolio management structure is vastly more strategic and efficient than fee management, especially when the portfolio manager is partnered with their investor. Quite simply, no one watches over our investments closer than we will, when we are qualified and willing to manage.
And lastly, they say “talk is cheap!” and I agree. But - when the talk is backed up by results, it carries more weight. Our record of results stands for itself and I’m proud of the work we’ve done and are continuing to do at Westland.