Jim Korman - Continuing Family Tradition; Building His Own Legacy
Tuesday, March 08, 2005 - The APTS
When a family name is highly visible and of historical significance, it can be a fascinating phenomena to witness how the generations that follow handle it. There are those that cannot bear the pressure of living up to the standards that have been previously established and either do their best to distance themselves from it or simply ride on its coattails without establishing their own identity. But then there are others that willingly embrace their lineage, taking great pride in the family history and have the courage to not only maintain and continue it but also to create a legacy of their own. It certainly cannot be easy as there will always be great expectations for that individual and others will sit in judgment to see if their perceptions become reality. It takes a rare person, one who is secure within himself and the values that were learned from that family to stand up and accept that challenge. A glittering example of one whose family surely can be secure in continuing the high standards and impeccable values that have been their hallmark for decades is Jim Korman, President of Korman Residential Properties.
In the property management industry, the name Korman has instant meaning. Thousands make their home in the houses or apartments which Korman built. Jim, who is part of the fourth generation of the company that was founded in 1919, not only continues the Korman tradition of excellence in the industry but is creating a legacy of his own. Along with his brother John who is CEO of Korman Residential Properties, they lead the company that currently owns and/or manages nearly 8,000 apartment units throughout the tri-state area. Jim has now been chosen as the 2005 President of the Apartment Association of Greater Philadelphia, a role in which he has already brought great energy and infectious enthusiasm.
"The President of the Association does set a tone and focus for the year and it is such a pleasure to have Jim head AAGP in 2005," said Pam Bennett, AAGP Executive Director, recently. "His initial response once he was voted in was to meet with the entire staff to discuss goals and hurdles faced by each individual. He shared his vision and goals for the year and together brainstormed solutions to the various problems discussed. His energy and attitude, plus his willingness to work for the entire Association has greatly lifted staff moral."
Upon taking office, Jim immediately hit the ground running. Recognizing the importance of the internet and the vital role it plays in today's business world, Jim set out to overhaul the AAGP's website. He enlisted the input of several AAGP volunteers, along with the immense creative abilities of Ellen Thompson from 4 Walls, and facilitated the complete reconstruction of the AAGP's web site. As Jim had hoped, all of the work was accomplished at no cost to the association.
Shortly after the completion of the new website, Jim felt the need to take stock of where the AAGP stood with respect to its goals and overall purpose. He consulted with Pam Bennett to discuss those that had been created at the Executive Board Retreat which took place in 2001. "I wanted to review the action plan that had been laid out in April of 2001 in order to benchmark our progress, or lack thereof. To the credit of the recent past Presidents and the tireless efforts of the staff and membership, we had accomplished most, if not all, of the 2001 goals. We are in strong financial shape, with outstanding educational programs. Our presence in Harrisburg is stronger than ever, and The Pennsylvania Apartment Association is about to hold its first ever Board Meeting in Harrisburg in April." Jim intends to call for another Executive Board Retreat in the near future in order to generate new goals and a new action plan to reach them.
As a child, Jim would spend time with his father, Berton, traveling around the areas where Korman had built entire neighborhoods, including single family homes, schools and shopping areas in addition to apartments. As he grew, Jim came to more intensely understand the major influence and impact of the Korman Family. But like most kids, he had to find himself and with the assistance of a close relationship with his parents, he soon set forth on his path. "To be honest, I was not exactly a great student," he said on a recent afternoon. "I was more interested in the social and recreational aspects of my life at the time. But one day, my mother sat me down and said, ‘I know you like your free time but it will be so much sweeter if you earn it. With hard work and doing everything you are supposed to do, you will enjoy the free time so much more'. She was right, of course, and I think about that conversation often."
An outstanding tennis player in high school and at the University of Delaware, both of whom he served as team captain, Jim joined the company full time upon graduation and was determined to learn every facet of the business. He began in corporate sales at KormanSuites at international City and was then rotated from apartment community to apartment community in order to learn the portfolio. "In order to effectively lease apartments you have to know everything about the property," he said. This experience helped form the foundation of Jim's apartment knowledge. After several years in sales Jim progressed through the company in asset management, operations, and some "crisis management" work in Philadelphia dealing with code violation resolution. At each stage, he gained a greater understanding of the business and more importantly, because of his approachable, genuine personality, he was building sincere relationships, earning trust and confidence. "At a young age, it would have been ridiculous for me to come in here and ‘big-time' people. After all, how could I, a twenty four year old kid possibly tell a seasoned manager that has been in the business for 15 years that I know better," he said reflecting on the experience. It is that kind of mindfulness that continues to make the company an amazingly close-knit and productive team.
"I really enjoy the people that I work with and do not see them as employees," he said, "they truly are like family. I see how hard they work and am grateful. From top to bottom they are such an incredible group. Building an organization with people that really care and believe in each other makes it fun to come to work. We grow many from within the ranks at Korman and, for example, we have managers who began in housekeeping, leasing experts who started as summer club attendants, etc. One of my jobs is to identify those individuals that have the desire and the aptitude to make our company better. I also recognize that there are other management companies out there that are as good as we are. We realize that there is much to be learned outside Korman and we will at times attempt to bring special individuals from other organizations on board."
His experience in athletics made a huge impact on Jim's management style and uses it frequently as an analogy. "It's almost like being a general manager for a sports team," he continued. "You have your homegrown talent and then you go out and consider outsiders or ‘free agents.' You want to strike a good balance. As in sports, there may be some tremendously gifted people, but if they cannot come in and integrate with our team, you can have problems. It's all about the team. The company is only as good as the team we put in place. They are, in essence, everything."
Continuing with the athletic theme, he said, "My sports background really helped me to learn that different people are motivated in different ways. I was always fascinated by different methods employed by different coaches and how effective they were or were not in motivating individuals. Certain people need to be stroked in order to bolster confidence to bring out the best in them. Others need to be constantly kicked in the butt. My experience in athletics helped me greatly to learn the difference."
The single most important influence on Jim Korman, though, has been his father who he refers to as "Big Boss Man." "He has been a major influence on my life, he was my teacher" he said proudly. "Most of what I have learned is from him. He is the consummate professional, the executive in the three-piece suit that is both brilliant and relentless. He is very serious and at times intimidating, although totally unintentionally. One of the lessons he taught me was that the less you speak, the more people think that you know. I always try to remember that pearl of wisdom because it is so true. When I was younger, we would drive through different areas and he would point out the different neighborhoods he and his father Max had developed. In addition to all the apartments, Korman built more than 20,000 homes in Northeast Philadelphia, Southwest Philadelphia, Bucks County, and Southern New Jersey. If I can accomplish half of what my father did in his career, I would consider myself very successful!"
THE ORIGINS OF KORMANSUITES
One of the most significant innovations of the company has been the development of the KormanSuites program. "It started in Center City in the 1970's as we recognized that there was a demand in the city for intermediate and long term rentals that were furnished. The concept really took off and was expanded out to the suburban properties. Originally, it was called Execu Suites but because of its success, other companies began similar programs and were in fact using the name Execu Suites. We knew there was only one surefire way to maintain our individual identity and thus the name KormanSuites was created."
Though corporate suites have become increasingly popular with several large national hotel chains getting into the furnished business, KormanSuites has a distinct advantage. "The difference between us and those at hotels is that as we see furnished business starting to wane, we can remove the furniture and accessories and convert them into regular one-year lease apartments. The secret to KormanSuites success is to be nimble. It's all in our ability to manage the flow. While others have to keep the units furnished and deal with vacancy, we have the flexibility to react to the ebbs and flows of demand for furnished units and avoid drops in occupancy.
Although the suites are available at all our properties, many believe that we are mostly furnished apartments. In reality, it represents only a small portion of our portfolio. It is the cherry on top of the sundae"
COMMITMENT TO THE REGION
"The Philadelphia Metropolitan area is traditionally a great market to be in," he said enthusiastically, "and absolutely a viable area for apartments because of the barriers to entry. If you go to places such as Charlotte, Austin, or Atlanta, they are slapping apartments up like crazy. They are overbuilt and oversupplied and many times have to give incentives, like 3 or 4 months rent free to get someone to move in. That is not an issue in Philadelphia because the overall supply of apartments in this market grows very slowly. If you are lucky enough to own properties here you can do very well."
John and Jim Korman have developed a solid formula for growth here which is right on track. "We identify under-managed or ‘dog-eared' properties in great locations. We buy wisely, usually not through the broker-auction process. After which, we will begin the process of renovating and repositioning them through strategic capital expenditures to enhance the community. Then we put our name on it and operate the heck out of it until the NOI ramps up. With our track record, I know that within months after we make a purchase, the property will be worth much more than when we initially purchased it," he said.
Because they resist overpaying for acquisitions, the company's growth has been slow but steady. Recent acquisitions include properties in Chestnut Hill, Willow Grove, Wilmington, and Haverford on the Main Line. "Any owner can tell you that it is a really tough time to buy properties now as everyone is looking and there is a lot of money out there," he said. "We are very careful when purchasing and though we have acquired sometimes only one property per year, it has had a positive effect in that it has enabled us to effectively absorb them and properly assimilate them into our portfolio."
Korman Residential is well known and highly regarded for what they bring to a community. Their detailed and conscientious attention to every facet on site is well known throughout the industry. Traditionally they have been the recipient of numerous AAGP Best in Apartment Living Awards, winning more than two dozen last year alone. They are constantly upgrading their product and it is taken for granted that living in a Korman community is a safe, secure, aesthetically impressive and well maintained place to call home. "One of the main things I learned while in asset management is that though our properties may not be newly constructed, they are not a day older. Rather, they must be a day better."
AT KORMAN RESIDENTIAL, IT IS A TEAM EFFORT
Again, Jim gives most of the credit to the incomparable Korman team. "John and I establish certain guidelines that we want to accomplish on site. Then we give these criteria to our managers and ask them to design "their" business plan to get us there. We want them to build the road map based on their firsthand knowledge of the sub-market while interpreting and utilizing the quantifiable data we provide them. We need them to view their property as their business and have a considerable voice into its success." To that end, the company designed its bonus plan to provide incentives to everyone that works at each community. "We wanted everyone's interests to be aligned," said Jim. "We wanted all of the staff to be ‘rowing in the same direction'. For example, we wanted the maintenance, staff when something is in need of repair, to determine whether it is best to fix it or replace it completely. We want them to consider the short and long term ramifications of their decision just like John Korman and I do. And it works really well because at the end of the day, if we are making money, I want them to profit from it as well. It goes all the way to housekeepers, maintenance techs and porters. Every single team member can play a positive role at the properties. It basically once again goes back to my experience in athletics where we have created a genuine team atmosphere and everyone is feeling they are a significant part of it."
THE PHILADELPHIA EAGLES YOUTH PARTNERSHIP
Jim's willingness to share good fortune with others is not limited solely to those within the company however. The Korman family has always been known for their philanthropy through the years for a plethora of causes. For Jim, his passion is the Philadelphia Eagles Youth Partnership. "I had come across an article one day in the Inquirer where the Eagles had taken a bus, gutted it and filled it with opthalmology diagnostic equipment," he says, the energy in his voice building. "What we do is go into schools in poor neighborhoods where the vast majority of students have never had an eye exam. They are given a full vision test and if it is determined that they need glasses, we will provide them free of charge. Furthermore, if the student has a more severe situation requiring surgery, we will make sure the surgery is performed at no cost to the family. It makes a huge difference in their lives because if they are in a classroom and cannot see the blackboard, it has a tremendous effect on their education. Originally we did it solely during the school year but now we have expanded the program to year round and hope to replicate it around the country. It's a phenomenal program and anything I can do to help it I will. You can even quantify it in simple terms: For every $25 that is donated, a child can have new glasses and quite possibly change their lives forever."
Giving of his time is certainly one of Jim's traits. Married for 11 years to his wife Laura and the father to 3 year old twins Josephine and William along with their older brother Henry, 7, he is a hands-on father and takes great pride in being heavily involved in every aspect of their upbringing. "Life moves so fast that I don't want to miss a second of them growing up. I take great pride in it and it is very, very important to me," beaming as only a proud father can.
LOOKING AHEAD AS AAGP PRESIDENT
With so much on his plate, he is very committed to his role leading the Apartment Association this year. Interestingly, like too many others, he was not heavily involved in the organization when he first came into the business. "I thought that, being a fourth generation company, after all, and we have been managing apartments for years...what do I need with that? But I quickly realized I was being young and naïve. Truthfully, what got me in the door at first was fear. Issues such as lead paint, radon, asbestos and all the disclosures that were necessary caused me to seek out the AAGP and take advantage of the wealth of information they provide. It opened up a whole new world in many areas and is an invaluable and critical resource not only for all apartment owners but associate members as well."
"The education courses offered are a significant benefit of membership and we have sent many of our people to them, it is a tremendous asset. The speakers and seminars they provide help even our most experienced people to expand their knowledge of the industry and there has been a direct impact on our success because of them. In addition, the simple fact of being able to interact with other owners and associates is extremely valuable. You can think of it this way: the more successful the apartment owners are, the more they will be able to grow and expand. The more they grow and expand, the more beneficial it will be ultimately to the associates. It is a win-win for everyone in the association. A strong and successful Apartment Association clearly promotes the growth and well-being of its members."
"We are a very diverse group in that we have both large and small owners as well as large and small associates. One of my goals as President is to make membership extremely valuable for everybody." On the legislative front alone, the efforts of the AAGP have and will continually save owners thousands, if not millions, of dollars by impacting the numerous governmental bills affecting the property management industry.
He went to work immediately upon becoming president by meeting with the AAGP staff, which rarely has ever happened previously, and reviewed with them what their specific individual goals are, what obstacles they face accomplishing them and how the path can be cleared. It has brought renewed energy to what has always been an exceptional and efficient team and his efforts have also been noticed by the membership. "Jim has been instrumental in the AAGP's growth and prosperity in the past, and his continued leadership will further strengthen our industry's common goals," said Paul Cohen, the region's foremost authority on landlord-tenant law and a longtime AAGP strategist for legislative issues.
Jim was part of an AAGP group that traveled to Pittsburgh to help create an association in Western Pennsylvania. This would essentially unify and increase the effectiveness of the less visible Pennsylvania Apartment Association, of which AAGP is a member. "We met with the members out there and it went really well," he said. "Finally we are moving forward and will be having our first PAA meeting in Harrisburg on April 12th."
It is apparent that one of Jim's strengths is being a great communicator. He is a strong proponent in building bridges between opposing factions. "One of my goals this year is to reach out to organizations such as the Tenant Action Group," he said. "Whenever legislative issues arise in Philadelphia for example, TAG will voice strong opposition to anything benefiting landlords because they view us as the enemy. Realistically, in the AAGP, there are no slumlords. None that I know of anyway. Yet, we can mistakenly be grouped together with slumlords. I feel it is important to work with these tenant groups and perhaps share our knowledge of resolving tenants issues and thus earn an ally while helping families being mistreated by such slumlords."
"I want the AAGP to have the best year it has ever had," he continued. "I want to do everything I can to make it the best it can be. I do not pretend to have all the answers but I'm quite sure that if we utilize the people and resources at our disposal we can have a major impact on the industry. The individuals that make up our membership at AAGP are an amazing cross-section of talent that, if fully mobilized, could accomplish almost anything."
It will be an exciting year for the association with a leader that is not only aware of practical aspects, such as the web site, that need attention but also one that has idealistic goals to serve the greater good. His impact has been felt immediately by everyone in the Association. "After our first Dinner Meeting, I had several members comment on his relaxed, positive and all embracing attitude towards the audience," said AAGP Executive Director Pam Bennett. "His genuine warmth and positive demeanor coupled with his enthusiastic belief in the value of the Association promises to bring about a year of growth and improved services and benefits to our members. All of us here on staff look forward to working with him in a real partnership for success."
It is human nature that not everyone readily welcomes change and Jim may have to fight against pockets of existing inbred negativism from some that certain aspects of his vision will not work. But he is a formidable presence and one that has a proven track record of willingly accepting challenges and creating solutions. It is the trademark of a leader. High standards of ethics, morals and values, qualities that have transcended through generations of the Korman family, have enabled the company to set an example in the property management industry. Continuing that tradition, Jim Korman is now extending those principles to leading his peers in the AAGP, the results of which will surely be his own legacy for years to come.