In his best-selling book, The Seven Habits of Highly Effective People, author Stephen Covey offers a handful of principles for life and work. "Be proactive," he recommends. "Begin with the end in mind."
There are five more habits, of course, but just those first two seem strangely familiar after spending time with another business leader named Steven: Steven LeBlanc, president and CEO of Charlotte, N.C.-based Summit Properties. Talk to LeBlanc and those who know him, and these themes emerge again and again in his career and corporate decisions.
Colleagues and competitors alike talk about LeBlanc's curiosity, his concentration, and his ability to create a vision for a company's future. "There's a lot of good real estate people who know bricks and mortar, but the industry has not been long on strategic thinking and professional management expertise," says James Allwin, president of Aetos Capital in New York and a member of Summit's board of directors. "Steve is one of those rare people."
Now, as Multifamily Executive's 2004 Executive of the Year, LeBlanc will join another elite group of industry leaders.
It's an honor about which the soft-spoken LeBlanc says he is humbled. "I feel blessed to have had the opportunity to lead a great team of talented professionals," says LeBlanc, who knew nothing of the award nomination prepared by Summit COO Michael Schwarz until Schwarz told him.
It's also a final tribute to LeBlanc and his work at Summit. This fall, the CEO announced the North Carolina-based REIT would merge with Camden Property Trust in a $1.9 billion deal expected to close in early 2005. How did LeBlanc take a young public company still emerging from its entrepre- neurial start and turn it into a highly appealing acquisition? Let's consider the seven habits of Steven LeBlanc.
1. Seek knowledge.
When it comes to gathering information, there's little that stops LeBlanc. "You never get to the end of a conversation without him asking a question," Summit CFO Gregg Adzema says. "He wants to know everything about everything."
LeBlanc has been that way since his early days in real estate, when as a young appraiser, he would attend local zoning board meetings, staying until things ended in the wee hours. To some, such a schedule sounds about as enjoyable as a regular root canal. But not to LeBlanc, who had discovered the tradeoff for those late nights: "I knew every development that was planned in Austin," he recalls.
It stands as an example of LeBlanc's inquisitiveness, not to mention his competitiveness, two qualities he has exhibited at Summit as he's led the company toward more financial and strategic sophistication. "He understands the industry, because he asks a million questions and remembers everything," Adzema says. "He is an accumulator of knowledge."
LeBlanc also transfers it to his people, in the form of a seemingly endless stream of ideas and information. "Steve is our Factiva," says Randy Ell, Summit's executive vice president of property operations. (Factiva is an online archive of news and information from around the world.) "He goes through all the crazy ideas and filters back the top seven ideas and leaves us to figure out one or two worth trying."
The approach pushes the company forward without losing sight of the practical considerations. "Steve is a fire hose of ideas," says Schwarz, "but he also respects that people have to get the ideas down to things that work."
2. Manage that ego.
Certainly, LeBlanc has the trappings of a CEO. He drives a BMW and carries a Blackberry. But the 47-year-old multifamily executive doesn't necessarily display the ego one might expect. "He's a mild-mannered guy who gets the job done in an industry of big egos," says William D. Sanders, co-chairman of Verde Realty in Texas and founder of Security Capital Group, where LeBlanc worked earlier in his career.
It has made a difference at Summit, where senior managers say they can respond honestly to their CEO's suggestions, whether their comments are positive or negative. "The danger with top executives is that the emperor needs someone to tell him when he doesn't have any clothes," says Ell, "and the best thing about working with Steve is that he takes that better than anyone I've ever seen."
3. Learn from the best.
Perhaps LeBlanc learned that openness at Security Capital, the virtual training ground for multifamily executives where he worked in the 1990s. He certainly embraced one hallmark of that company's philosophy: the open office. Even as the CEO of a nearly $2 billion company, LeBlanc works in a cubicle. "How many CEOs do you know who work in a cube?" he asks with a smile, walking from the smaller closed-door conference room he uses for private meetings. It's a large cubicle, certainly, but it's still a cubicle, with partial walls, an open doorway, and Summit's standard office furniture.
Katherine Lambert His former employer approves. "You learn in an open environment," Sanders explains with unexpected intensity. "You learn and you teach.")
LeBlanc learned other things as well. "Security Capital and Archstone both taught me the importance of strategic planning and capital allocation," he says. "I learned about the importance of building a fully integrated operating company."
Also on LeBlanc's resume: multifamily powerhouse Lincoln Property Co. "Lincoln Property gave me an opportunity in 1984 to be a partner when I was only 26 years old and inexperienced," he recalls.
That certainly wasn't the case for long, as he learned how to develop multifamily communities, raise capital, and, in the Texas real estate depression of the 1980s, do workouts on troubled properties. "I am proud of the fact that I built apartment communities in the '80s in Texas and broke even," he jokes.
4. Lead for the future.
Experiences such as those prepared the young executive for the job at Summit, which hired him as COO in 1998 and promoted him as planned to CEO in 2001, when Bill Paulsen stepped down.
It was in many ways a challenging time for Summit, irrespective of the rental market. "We were like most REITS," Adzema recalls. " We were a private company in a public company shell."
It showed. "Summit started out as a compilation of assets developed when it was a private company, and it grew beyond its base," says Stephen Swett, a Wachovia Securities analyst who has covered the company since 1998. With properties scattered across 22 cities from Charlotte to Dallas, Richmond to Raleigh, and Newark, N.J., to Indianapolis, Summit was both too big and too small.
Enter LeBlanc, who proposed positioning the company for the future by slicing the company's 22 markets to five. "We wanted to be a fully integrated real estate operating company, with development, operations, construction, and management expertise in every market. We wanted economies of scale and branding opportunities. You can't do that if you're all over the place in different markets," explains LeBlanc, who also wanted to dramatically boost Summit's presence in Washington, D.C., and Southeast Florida.
It was a difficult process for Summit, which took a few hits on its self-image and its sold properties. "It's always painful to leave a market," says Adzema, "because once you say you're exiting a market, everyone knows you have to sell those assets."
But the plan proved its worth after the tech bubble burst in 2000 and the apartment industry began struggling. "Class A properties have been hit very hard with interest rates and the for-sale market, but we have weathered the storm really well," says Schwarz. "It's all starting to click," Adzema agrees.
LeBlanc has left his mark on the company in other ways as well, pushing for better uses of technology. "Steve and Summit were one of the first companies to roll out credit screening online. They started revenue enhancement early on," says R. Scot Sellers, chairman and CEO of Archstone-Smith, whose history with LeBlanc goes back to Lincoln Property and Security Capital. "He is willing to look at the business in a different way than the old-school mentality."
One of the results of that is Summit's daily pricing system. Introduced in 2003, the program gathers data about occupancy, unit availability, and vacancy rates, analyzing it to produce market-responsive rents daily. If things are tight, rents will go up; if the market is softer, rents will go down. The logical, efficient system has helped Summit drive revenue and maintain high occupancies during an undeniably tough market; from 1999 to 2003, Summit's yearly average occupancy rate never dipped below 92.9 percent.
Technology has also helped Summit gain financial control and efficiencies in purchasing. In 2002, the company rolled out iSave, a Web-based system that allows on-site staff to shop online for light bulbs to new carpet, ordering what they need from chosen vendors. The program has saved time, of course, but also millions of dollars.
LeBlanc has also encouraged simple solutions to property management issues, such as staggering lease expiration dates rather than always writing leases for a precise 365 days. "We create our own inventory problems when [leases for] 17 one-bedrooms expire on the same day," says LeBlanc. "If we can reduce the average number of days vacant per apartment home, we can generate over $500,000 in additional revenue annually."
5. Challenge your people.
Regardless of the decision, though, it's pretty certain at Summit that it was preceded by heated discussion. "I love the debate," LeBlanc admits over lunch, his animated exclamation temporarily breaking his polite but friendly reserve. "It's how you get to the best solution–as long as the debate stays respectful and focused on solving the problem."
It's one of the ways LeBlanc both challenges his management staff and tests their commitment to an idea. "He wants people to state a position, but he wants you to defend it because then he feels confident that you are passionate about it and will follow through on it," Ell says.
6. Respect a company's past.
LeBlanc has also treated the Summit culture with respect. Tight-knit and creative, the company values and expects independent decision-making. "You're in charge of what it is you are hired to do. It's almost like working for yourself," says Keith Downey, Summit's executive vice president of construction. "We don't hire people who need to be directed to what to do."
That hasn't changed under LeBlanc. "A lot of people coming in from the outside would have wanted to put their stamp on things. What he discovered was a positive, powerful culture worth saving," Schwarz says. "It takes a lot for a person to recognize that."
To LeBlanc, it's simply part of being a leader, particularly when joining a new company or assuming a new managerial role. "The first step is to honor the past," LeBlanc explains. "Every company and every team have stories they tell about their rich history and culture and you need to listen and learn them. Only then can you acknowledge the present before you begin the process of charting a course for the future."
Along the way, LeBlanc has made his own contributions to Summit's culture, including an annual community service day. This year, the company chose to help children's organizations, closing its offices so employees could descend upon shelters and alternative schools to paint walls, replace furniture, repair plumbing, rebuild play areas, and more. "[T]he difference from start to finish was like an episode of 'Extreme Makeover: Home Edition,'" wrote Jennifer Branscome, a Summit associate in Florida, in one of many e-mails that circulated around the company after this year's service day.
Such transformations floored the recipients. "The girls were screaming and crying with surprises and joy when they walked into their rooms for the first time," Cindy Barnes, a Summit construction accountant, said in an e-mail. "I have never seen tears that could touch your heart so deeply as the ones we all shared with these girls on Friday."
"That's a Steve deal, and now it's part of Summit," Ell says of the community service day. "It's something we'll do forever."
7. Know when it's time for a change.
Of course, sometimes forever ends sooner than expected. As of January, Summit will become a division of Camden Property Trust, and Steve LeBlanc will step aside.
"Instead of being an egocentric corporate executive who wants to hold onto his job at all costs, he did a great thing for stockholders," says Arthur Zankel, senior managing partner of High Rise Capital Management, an investment management firm in New York.
That remains a top priority for LeBlanc, as the days advance toward January. "My goal is to deliver a fully integrated operating company running on all cylinders on the day of closing," the Summit CEO says.
As for LeBlanc's own post-merger plans, he says he hopes to help Summit associates who won't be joining Camden find new jobs. Beyond that, nothing has been announced. But wherever he goes, he'll take his philosophy of big ideas, considered decisions, and small but symbolic gestures with him.
Steven LeBlanc
- Title: President and CEO
- Company: Summit Properties
- Education: B.B.A. in real estate, University of Texas, 1980
- Background: Joined Summit in 1998 as COO; promoted to CEO in 2001. Worked for Security Capital, Lincoln Property, Archstone, and others.
- Personal: Wife Ellen, son Andrew (17), and daughter Aubrey (13)
- Notable: Worked his way through college as a real estate broker. Bought his first computer from fellow University of Texas student (and future technology titan) Michael Dell.
Summit Properties at a Glance
- What: Public real estate investment trust that owns, operates, and develops luxury apartments
- Headquarters: Charlotte, N.C., in Summit Grandview
- 2003 Revenue: $144.135 million
- 2003 Net Income: $16.331 million
- Apartments: 14,806 with 1,715 under construction (as of September 2004)
- Markets: Charlotte and Raleigh, N.C.; Washington, D.C.; Southeast Florida; Atlanta
- Big Deals: Announced $1.9 billion merger with Camden Property Trust in October, creating one of the largest apartment companies in the country