Having a family business move into a third generation and succeed is an impressive feat.
Drucker + Falk, a multifamily management and commercial real estate company, has mastered this generational transition, with its third generation now in charge. The Newport News, Va., -based company manages more than 40,000 apartments in 12 states, which range from garden-style to mid-rise and high-rise multifamily buildings.
In the current market, numerous Drucker + Falk managed communities are following a value-add strategy. The approach helps them maximize investments and significantly increase asset value by managing renovations for clients in a way to provide a solid scope of work, assisting with selecting great products through national partnerships and effectively supervising all the work.
For management to succeed and secure all the inventory it needed and have competent work staff has required help from reliable, well stocked and experienced providers.
Until four years ago, Drucker + Falk relied on purchasing MRO (maintenance, repair and operations) supplies from product distributor Maintenance Supply Headquarters in Houston. The arrangement worked well but presented several challenges, namely, a lack of national representation, inventory needed to upgrade units in a timely way and a fast delivery turnaround, including during emergencies.
However, the situation greatly improved in 2017 when Lowe’s, the giant retailer in Mooresville, N.C., acquired MSH for $512 million. The new Lowe’s Pro Supply division offered Drucker + Falk an opportunity to improve its business model on numerous fronts and help clients compete better in the multifamily apartment sector. “It made life so much easier to do business in a bigger way, and we recognized what we were missing,” says Steve Hayworth, Director of Maintenance who’s been with Drucker + Falk for 35 years.
Here’s how it has helped. The partnership provides access to Lowe’s huge network of more than 1,700 retail stores, which makes it easier to open retail accounts and have national representation, Hayworth says.
It gives the company access to a larger supply of inventory and items specific to multifamily remodels. The economy of scale offers better pricing.
Because of the Lowe’s Pro Supply Purchase Card, managers gain the option to purchase inventory online without stepping into a store, though they could still buy that way. “It gave us new ways of getting supplies and provided single billing,” Hayworth says. The P card also offers 5% discounts on purchases and a flat delivery rate.
The new partnership offers more of a personal connection and greater expertise that leads to time and dollars saved. “At all of our sites, the property or service manager who makes purchases works with a Lowe’s Pro supply rep rather than searching for a contact,” Hayworth says. “There is also the option to reach out to a national rep who can answer questions for all properties with one call,” Hayworth says.
Besides ordering individual items, managers can choose to have a “Kit” box that includes all essentials for an apartment delivered directly to its door. “Whatever we want, they box it together, which saves time in searching online or walking through a store, and it lessens the chance of forgetting items,” Hayworth says.
Having this kind of strong connection has helped Drucker + Falk during the ups and downs of COVID-19 when products not normally stocked were needed such as Personal Protective Equipment (PPE) and others were in short supply or unavailable like appliances and lumber.
“I could reach out and say, ‘I have this much left and need this or that. Can we buy in bulk?’” Hayworth says. “My contacts have also been great about sending us reports on the availability of items.”
Staffing, which nobody knew would become such a huge issue when the virus hit, remains difficult due to a shortage of skilled labor even now, Hayworth says. “But here, too, Lowe’s Pro Supply team has helped by stepping in to do essential work,” he says.
The partnership continues to help as Drucker + Falk’s clients embark on aggressive growth and the company finds it entering new markets in Texas, Ohio, Kentucky and Indiana. “They need to be ready for business without missing a beat and with the help we get from Lowe’s Pro Supply they are,” Hayworth says.