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A Leader’s Path to Success

January 2021

Like many of the multifamily housing sector’s most successful executives, Rick Graf, CPM, fell into the apartment industry. Or perhaps more accurately, his father pulled him into the business.

“When I was in high school, my parents had divorced and my dad moved into an apartment,” Graf says. “He called me one day and said, ‘I’ve got a part-time job for you.’ And I said, ‘Dad, I’m not looking for a job.’ He said, ‘No, you are.’”

Graf didn’t know it at the time, but at 17, he was starting what would turn into a nearly 50-year career. He began working at the property after school and during weekends in South Bend, Ind., as a porter—picking up trash and changing lightbulbs.

“I’m tall, so I could change lightbulbs,” Graf says. “And, I guess I was good at picking up trash. I’m still picking up trash. That’s in my nature.”

Graf was so good that the apartment community owner, Edward Rose & Sons, offered him a full-time job when he graduated from high school. He took the job and put off college. It was a decision that changed the trajectory of his life. Those initial property management lessons gave Graf the foundation to work his way up both the property management and association ladders.

“They taught me the business,” Graf says.

Learning the Business

Even though its management training program was informal, Edward Rose provided Graf with an excellent education about the apartment industry. Graf worked in maintenance and leasing, before moving up the chain to assistant manager and manager.

“There are a ton of people that have come out of the Edward Rose factory that have great backgrounds and have done very well,” Graf says. “It’s a family-owned business and a very conservative business.”

Edward Rose also provided Graf with an introduction to his wife of 40 years,

Linda, who worked in the accounting department. After getting married, the couple left for a warmer locale. They settled in Texas in 1982.

After leaving Edward Rose, Graf got a taste of several company cultures.

“I worked for small companies and large companies to learn the business more broadly,” Graf says. “Edward Rose had a very particular way of doing things. So I learned different styles and ways to approach the business in different markets.”

In the early 90s, Pinnacle moved into Dallas. Over the years, headhunters recruited him to work for the Seattle-based manager, but he thought the firm had a “Left Coast feel.”

“I was much more conservative and much more institutional in nature,” Graf says. “They were not.”

A couple of years later, Pinnacle recruiters circled back to Graf. This time, he took an interview. He ultimately ended up taking a Regional President job at the company, where he would oversee roughly 5,000 units in Texas and the adjacent markets.

With Graf’s roots, he eventually added Pinnacle’s Midwestern portfolio to his job responsibilities. As this was happening, Pinnacle was dramatically growing. When Graf joined, the company was in the neighborhood of 60,000 units. Ten years later, it was at 185,000 apartments.

“We had a lot of success,” Graf says. “We grew the portfolio significantly. I think at one time, my portfolio in that capacity was 45,000 or 50,000 units.”

Taking the Reins

As Graf was working his way up the apartment business ladder early in his career, he’d never been involved in industry service. But in 2001, he reached out to the Apartment Association of Greater Dallas (AAGD) to volunteer.

Ultimately, Graf, a Certified Property Manager (CPM), ascended to a leadership role and became President of AAGD and then the Texas Apartment Association (TAA). Jerry Winograd, President, Judwin Properties and his successor as President at TAA, was impressed with Graf’s leadership style.

“He was just very inclusive and always willing to share his thoughts,” Winograd says. “I’ve always appreciated that about him. He’s just honest, but he likes a good laugh or two along the way.”

Through TAA, Graf got involved with NAA. He has been actively involved as a volunteer at the national level since 1999, serving as Vice President of the NAA Education Institute’s (NAAEI)

Board of Directors and Chair of the NAAEI NOW Capital Campaign to raise funds for industry leadership and education programs. Graf also has been involved in NAA conferences and served as the Chair of the Conference Committee.

“It [association service] has been an opportunity to give back to an industry that’s been good to my family,” Graf says. “It has offered credibility to Pinnacle and has helped our business. I don’t think we look at NAA as a source of business development, but just having contacts and connections and visibility as a leader at NAA for a long time has been important.”

As Graf became more active in industry associations, he continued to move up the ladder at Pinnacle. Eventually, he put himself in a position to take over the company from Pinnacle Founder Stan Harrelson.

After a two-year discussion, Graf took the reins on Sept. 1, 2008—not exactly the best time to be stepping into a CEO role in real estate and becoming a partner owner. The economy was collapsing, and Freddie Mac and Fannie Mae would be pulled into conservatorship a few weeks later.

The economic situation didn’t dissuade Graf from making some significant changes, including moving the company headquarters to Dallas. Graf thought moving to Texas would offer the company better access to talent.

“It was Stan’s suggestion, after a lot of seed planting on my part, that we should move the headquarters to Dallas,” Graf says. “If we didn’t do that, he thought he would never really step away and I would never have full control.”

Taking over a company from its founders can be difficult. But Graf’s leadership skills allowed him to overcome those types of challenges. “He is a very confident leader,” Winograd says. “He knows what he’s doing.”

Longtime friend Brad Williams, CPM, Regional Vice President at Lincoln Property Company, is impressed with how Graf makes management look easy.

“He makes the right small decisions,” Williams says. “When you make all the right small decisions, you seldom ever come to the point where you have to make a big decision. That is just a tremendous talent that Rick has.”

By 2010, Pinnacle had officially moved, though it still had a presence in Seattle. That wasn’t the only transition that was occurring at the company.

“We wanted to retool the company to turn it into much more of an institutional manager,” Graf says. “It was a high-net-worth developer and property management company for syndicators. But we had a vision to be much more institutional in terms of our approach and client base.”

At the time of the transition, 10% of Pinnacle’s clients were institutional. Now, institutions represent 75% of its clients. As the company focused on institutional clients, its number of units managed went down.

“I never really desired to be the largest,” Graf says. “Part of that culling process we went through was to reduce the sizeof the footprint. In 2008 and 2009, we reduced the size of the unit count, but our profitability went up.”

Taking Ownership

With Harrelson and partner John Goodman moving away from the business, Graf began discussions about buying the original partners out. He and some other Pinnacle management team members brought on equity partners and completed the purchase on Sept. 1, 2014.

“We had just incredible success in growing the platform over that period,” Graf says.

Even with that success, Pinnacle would eventually need a new equity backer. After exploring several options, it found its next match with a global real estate platform.

“We had a couple of different scenarios we were working on,” Graf says. “We had met the Cushman & Wakefield guys during that time, and they were interested in getting in the multifamily business.”

After circling back a few times, they agreed to a deal with Cushman & Wakefield. “Ultimately, we put the deal together for them to buy the company outright, which happened on March 1 of this year, by the grace of God,” Graf says.

For Graf, the timing was fortuitous. Two weeks later, the COVID-19 pandemic would force the country into lockdown. While the Pinnacle-Cushman & Wakefield union might have taken some by surprise initially, the two firms complement each other well.

“We’ve already had a lot of opportunities where there’s a tag-a-long business for us,” Graf says. “A lot of mixed-use developments are being built. They [Cushman & Wakefield] are doing the office or retail leasing management, and we’re doing the multifamily leasing and management.”

Cushman & Wakefield’s global platform could also provide a springboard for international growth. Some of the competition already operate apartments in other countries. Graf thinks that kind of expansion could also be on the horizon for Pinnacle, which has been rebranded as Cushman & Wakefield, with Graf serving as President of Multifamily.

“As purpose-built multifamily grows in the European markets and the Asia Pacific markets, it’s easier for us to build on that [international] chassis,” Graf says. “There’s clearly a global play at some point in time.”

Doing business internationally won’t be new to Graf. “He’s been all over the world,” Williams says. “He’s been in every financial center in the world raising investments and just building relationships with his clients.”

A Challenging Year Ahead

For 2021, a lot of Graf’s focus will be domestic, as he takes over as Chairman of the Board at a time of significant turbulence in the world. Even if a COVID-19 vaccine is widely distributed, 2021 will be a tough year.

Williams says that Graf’s experience building Pinnacle and as President at TAA and AAGD will be beneficial in 2021. “We're going to be facing so many challenges coming up, whether it's a COVID or new HUD directives [with the Biden administration] or our budget or worrying about falling revenues,” Williams says. “If we’ve ever had anybody that is prepared for this job, it’s Rick Graf.”

Winograd thinks Graf’s big picture approach makes him the perfect person to pilot the organization in this challenging environment. “He has a grasp of what has happened and what it’s going to take to get back on track,” he says. “From working at a larger organization, he knows how to make sure the right people are in place, give them the tools they need and put them on the path to go forward.”

Mike Holmes, President of Easlan Management Co. and Graf’s predecessor as NAA Chair, agrees. “He has a perch high enough up the tree to have a long-range vision for how we start digging out of the rubble,” he says. “Hopefully, next year, we’ll start seeing some receding [of the pandemic] and then we can start moving back toward NAA’s agenda. Rick is the guy to do that. He’s got great leadership skills and great vision.”

Driving Positive Solutions

With the country mired in recession, Graf knows housing affordability will still be a huge issue. He says the industry needs to propose solutions that don’t involve rent control or regulatory fixes. “We are better equipped than anybody to address the housing need because we are the apartment business,” he says.

Graf doesn’t harbor any illusions. He knows it will be a multi-year process to drive positive solutions. The resolution likely won’t occur in 2021, but there is no time like the present to continue moving forward.

With pandemic-induced state and local budget shortfalls, Graf also expects apartment owners to face increased taxes and fees in the year ahead.

“Every municipality we operate in is scrambling for dollars,” he says. “That’s going to get worse as the financial effects of COVID hit their budgets. And they’re going to be looking to the private sector for revenue sources. We need to have a positive relationship with our city leaders or state leaders and be proactive to help them understand that we have some ideas that can be positive.”

Those relationships will extend to the federal level. As a new Congress comes to Washington, Graf wants these members to see NAA as a resource. “As I’ve sat down with legislators over the years, I realize that they’re looking for help,” Graf says. “They’re looking for answers. And we can build those relationships where they come to us for answers. That’s a perfect situation for us to help shape policy and opinions.”

There may be no one better to shape policymakers’ opinions of the industry than Graf. “He carries a lot of influence in our industry with his knowledge and his experience,” Holmes says. “His opinion matters, and it carries weight.”

Graf brings unmatched expertise and experiences to the table. With a tumultuous 2021 ahead, that experience will be invaluable to NAA and its members.

“I got into this when I was 17. I’m 63 now,” Graf says. “In 46 years, I went from picking up trash and changing lightbulbs to leading one of the largest apartment management organizations in the U.S. and being part of Cushman & Wakefield’s global platform. It has been quite a run.”

During that run, Graf has made his mark on the companies with which he’s worked, NAA and really the entire industry. “There is nothing in our association that Rick Graf has touched and not made better,” Williams says.

Les Shaver is a freelance writer.