The multifamily industry has long debated the merits of vertical integration versus outsourced property management. At OneWall Communities, our experience managing workforce housing has proven that alignment between asset management and property management isn’t just beneficial – it’s essential for success.
“Being vertically integrated allows you to have a holistic approach to your investment,” explains Ron Kutas, CEO of OneWall Communities. “When property management and asset management are completely aligned, you have a much greater chance in succeeding.”
The challenge with traditional third-party management companies lies in their incentive structure. Most property management firms focus primarily on revenue generation – leasing units and maximizing rents – because that’s how their fees are structured. While this approach has merit, it often overlooks a critical component of investment performance: expense management.
“We’ve seen property management companies that really don’t view the expense side as something that they need to really hone in on,” Kutas notes. “Aligning ourselves with asset management and ownership in terms of what the actual business plan is so we can advise on what types of expenses are or are not necessary at the property has been a very quick value add.”
This distinction becomes particularly important in today’s market environment, where rent growth has moderated across many markets. When revenue optimization becomes challenging, operational efficiency and expense management become the differentiators between mediocre and exceptional investment performance.
OneWall’s vertically integrated model ensures that everyone—from investors to on-site teams – speaks the same language and rows in the same direction. This alignment allows for more strategic decision-making about capital expenditures, operational improvements, and resident services.
The trade-off? Geographic constraints. As Kutas acknowledges, “The hardest part is being geographically constrained. When you’re a property management company, you have to have staffing on the ground.”
However, this challenge has driven OneWall’s recent expansion into the Southeast, where the company now operates in Texas, Florida, Georgia, Kansas, Arkansas, and several other states, bringing their owner-operator mindset to markets hungry for institutional-quality property management.