CEO, Vesta Asset Management
In the dog-eat-dog world of property management, where the established few have traditionally ruled the pack and guarded their territory with unmatched ferocity, outsiders, particularly newcomers have had to work twice as hard to establish a beachhead. Into this challenging environment enters Paul Griffiths, calm and personable by nature, but possessed of a drive, grit and self-confidence that has enabled success in establishing a name and growing reputation in the competitive Bay Area in a relatively short period of time. Now the marketplace is asking, “Who is this person, and how have they achieved success so quickly?” To which they would respond that their success has been predicated on establishing an operating bond with their clients that has patiently been built upon a platform of trust, veracity and authority.
The Score Card
- Attended West Chester University of Pennsylvania (BA), Long Island University MA), Columbia Business School
- Extensive not-for-profit experience e.g., Supportive Housing Network of New York
- Extensive experience in real estate leasing and property management – Zephyr Real Estate, Coldwell Banker, and Pacific Union International.
- Founded Vesta Asset Management in 2015; Currently manages 1600 units under contract; with a 130% growth in 2021, and a mid-term goal of 5000 units under contract
- Strong supporter of Lyric, an organization based in the Castro that supports LGBTQ youth, many of whom have been marginalized by family and society, and Portfolia, an investment fund that supports women-owned businesses and micro-financing
On the early years
I learned commercial leasing and property management under the guidance of some very experienced mentors, but I went to work for Pacific Union because I wanted to work for a luxury brokerage that was handling property management. They weren’t the top brokerage in unit count, but I wasn’t only focused on numbers. It was really about learning about the brand. How do you create a luxury brand when not all the houses you’re managing are luxury? How do you create a brand that attracts the properties that you want to be managing? I knew that by attaching myself to the Pacific Union brand it would help me learn all of this, and build my personal brand as well.
I’m trying to raise the bar on what people can expect from the field of property management. I discovered that when a top sales agent referred a client to a broker who handled property management, the client was not receiving the same caliber of service that the referring sales agent was providing. So, I came into this field to recalibrate what people can expect on the property management side.
We cover all of California because a lot of our clients will invest cross market. When San Francisco’s rental market was softening, some of our clients sold their assets here and invested in Los Angeles, so we now manage their properties in Southern California as well. But the bulk of our portfolio remains Bay Area-based — San Francisco, the Peninsula, Marin and the East Bay, as far as Walnut Creek.
On growth and success
I anticipate we’ll grow by 60-70% in 2022/2023, that equates to approximately 500-600 units that we’ll add to our portfolio each year, so, size-wise, we’re very rapidly becoming a solid mid-sized property management company. We made three acquisitions in 2020, which were a huge boost, almost doubling our property portfolio. In all three instances, they were brokerages where the owners were interested in getting out of the business. The problem is you can’t just get out of the business without ongoing obligation. You actually have to sell the relationship, because someone needs to continue managing the properties. That’s where Vesta comes in. That’s our strength.
We have a definite acquisition strategy. I have certain firms that I actively pursue even though they’re not prepared to sell at this point. A lot of them, frankly, are older brokerages, that ultimately don’t have someone in place to carry on the business once the owner retires. But I don’t just rely on the acquisition route. I live and breathe property management. I’m a seven-day-a-week broker. Today alone, I’ve already made three sales calls, and all three of them resulted in contracts. Other brokerages grow very comfortable hitting the threshold of what they’re comfortable managing, and then they stop selling. Not Vesta!
At some point, we’ll expand into the corporate sector where corporations own the buildings, but for now, the bulk of my clients are individuals who either inherited family assets – meaning they own and manage three to five properties, and sometimes they’re new clients, for example, tech people who came into money and bought their first multi-family, but they don’t know anything about tenant rights or owner obligations. We’re there to help guide them into this new investment, because ultimately, we want the process to run smoothly from an operational viewpoint and inspire them to invest in additional properties.
On managing in an operations-intensive industry
We average 6 — 15 rental units in the traditional multi-family apartment building. We also handle larger properties with 80 — 100 units, as well as condos and single-family homes. Our average monthly rental rate starts at $5,000 and can go as high as $45,000. Some of our rentals are in a rent control buildings where the rate is around $3,500, but that’s not common.
We have a staff of twelve – someone who handles in-house leasing, four portfolio managers, two associate portfolio managers, a full-time accounting department and a personal assistant. I get the bulk of my business via referral, from realtors who buy and sell properties that need management. I’ve taken the time to build an extensive network of realtors who are, in essence, my de facto marketing department.
Property management is the best example of an industry that can only succeed with the right people. So, my hiring process is very thorough. The singular characteristic I’m looking for is “emotional intelligence”. If an employee lacks that characteristic, they will inevitably open me up to potential litigation. In our business, whether you’re dealing with a tenant, client or vendor, you need to quickly determine their feelings, needs, wants and desires. I absolutely insist that my staff have some sense of intuition and understanding about the human condition.
Clients hire us because we invest a lot in client education and interpersonal relationships. These are the clients who are going to call me on a Sunday morning at 7:00 a.m. because they want to chat about an article that they just read about the real estate market. I’m going to take that call and educate them in the process. They see me less as someone who is managing their property and more as their expert real estate advisor.
Frivolous lawsuits keep me awake in the middle of the night. They’re part of every brokerage’s business and they’re time-consuming and expensive. It’s taught me to sharpen my radar and trust my instincts. Nowadays, when I see one red flag, I walk away from the table.
On working with Realtors and leasing agents
A lot of our business comes from leasing agents who don’t have anywhere to send their property management business. I think (and hope) that I am perceived within the realtor community as being a trustworthy partner. I am very transparent with agents. I’m never going to step on their toes or poach their clients. I’m there as part of their team. I think they find it reassuring that I stay in my own lane, that I show them respect and that I’m going to take care of that client with an unparalleled degree of diligence and top-notch service.
Vendors and trades people appreciate my direct approach — “Just tell me when it’s going to get done. Tell me when you’re going to bill. And let me know that everything’s okay.” Clients and vendors find my “East Coast” approach to be refreshing. I’m an ex-New Yorker, so I’m accepted positively here in California where everyone is very casual about business. On the one hand, I express a no-nonsense, direct East Coast approach in my transactions and dealings. On the other hand, I’m also very empathetic with my clients and vendors. I think they appreciate that duality.
On motivation and drive
It’s not totally about the money. I like to compete. I like the challenge. I have had tight situations where people underestimated me, didn’t think that I was a closer, or that I could follow through. When I started Vesta, I wanted to prove them wrong. I also never want to disappoint those agents and brokers who trust me with their clients. I want to prove to them that I’m consistent and trustworthy. That’s really what drives me.
Vesta is unique in the business. Most property management brokerages don’t invest in the tenant relationship because tenants are the end-user and they don’t directly pay the bills. So, they’re the commonly-neglected party in the transaction, which often results in an adversarial relationship. I tell my clients at the start, “I invest in tenant relationships. These are also our partners and it works to have positive dialogue, to invest in repairs, and to show them respect, because they are the core of our business.” It’s vitally important for me and for my staff to see the tenant relationship as being just as important as the clients who are paying our bills. Vesta is the symbol of hearth and home, and we work to give tenants their best definition of ‘home’ that keeps them happy, and keeps the units occupied. This makes everyone in the equation a winner.
I definitely burn the candle at both ends. I need to get better at delegation and hire more team members who can support what I do. I’m a serious micro-manager, but in this business, you have to be. On the positive side, I believe that people are naturally drawn to optimism and happiness, and one of my biggest strengths? My optimism.
On Paul, the person
I suspect that my clients view me as direct, not warm and fuzzy. I’m not afraid to deliver the hard truth. I give them caveats, and I warn them ahead of time, but if I have bad news, I’m going to tell them. My staff would probably say that I drive them very hard. But I’m also forgiving. I understand through bitter experience that ours is not an industry that always delivers perfection in what we do or how we react to emergencies and the unpredictable.
Because I have been fiercely independent since graduating college, I’m used to doing everything myself. Everything I know about the business, I taught myself. That’s forced me to trust myself, and, as a result, I’ve developed finely-honed instincts about people, business and life itself. There’s a reason why I called Vesta an asset management company. Our entire business model is structured around being different and not being beholden to the conventional wisdom, much of it outmoded, that drives the industry.