Probably the most important job for the leader of any organization is to establish and communicate a simple strategy for that organization.
Maybe that’s easy for other leaders. But I like to “Hamlet” things… go back and forth, see the positives and negatives of different courses of action, and generally fail to be decisive. So, defining exactly what it is that we’re trying to do at Adaptive has not been easy for me (just ask Jon!).
But, over the past few weeks, in conversations with Jon, our strategy has come into focus. Adaptive seeks to:
- Grow our permanent assets under management by buying and renovating well-located apartment buildings where the post-stabilization levered yield exceeds the preferred return we owe our investors; and
- Grow the number of high quality apartments managed by our management company at a responsible pace (ie one that does not imperil our ability to deliver good service to our existing tenants and owners).
That’s it. We’re not going to start renovating hotels or office space. We’re not going to build ground up (at least, not until the numbers change to make the yields more appealing).
We will, however, systematically review all of our options for numbers 1 & 2 above. And then we will test the new ideas that seem most likely to yield the outcomes we’re looking for, cull the ones that fail, and pour our resources into the ones that gain traction.