Fiduciary Real Estate Development – or FRED, as the company affectionately refers to itself – is a real estate development and property management company that was founded in Wisconsin in 1985 by a group of friends and businessmen who were looking to diversify from the securities industry into real estate. They began by buying twenty-unit to thirty-unit buildings, and over time, moved to much larger multifamily housing projects.
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In the mid-1990s, Fiduciary Real Estate Development began focusing on the development side of the business, and since then, its steady growth has included more than six hundred ground-up condominiums, four-thousand-unit multifamily apartment buildings, ground-up construction, single-family lot developments, and over one thousand apartment-to-condominium conversions.
It builds two to four new buildings each year, generating anywhere between five hundred and nine hundred units, all of which come with a thirty-day satisfaction guarantee which it likes to refer to as the ‘Fiduciary difference.’ This guarantee stems from the pride it feels in its quality and doing things the right away.
“At FRED, we’re not afraid to give this guarantee, because we’re confident in our team to do everything they can before an issue arises and to give our residents the best move-in experience possible,” said Fiduciary Executive Vice President Kathy Nettesheim. “We’re committed to resolving any issue that does arise, and we’re very proud to say we’ve been able to turn almost all of the issues that have come up into a happy resident staying with us.”
The approach is one that the company has developed over the past thirty years. It is about doing things the right way for residents, employees, and investors – doing things the ‘FRED Way.’
“I preach two promises in the marketplace,” said Fiduciary President and Chief Executive Officer Brett Miller. “The first one is the most important because if we take care of the first one, the second one takes care of itself. The first one is about the people. It’s exceeding our residents’ expectations. If we exceed our residents’ expectations, they are going to be happy; our properties are going to stay full; our NOIs (net operating income) are going to be healthy, and we will be able to achieve the second promise, which is the promise of the returns to our investors,” he said.
“If we focus on those two promises and then provide the Fiduciary difference – keep our residents happy, we can achieve those two goals,” Miller added.
The group quickly found its niche in Wisconsin and has grown to have thirty properties in Milwaukee, Madison, Green Bay, and Kenosha and over three hundred employees, many of whom have been with the business for a very long time. For them, this is a more like a family run operation.
“I think that lends to some of our uniqueness and how we keep that family atmosphere versus spreading ourselves nationwide,” said Nettesheim, who has been with the company for twenty-four years. “I think that kind of makes us a step above the rest in the markets we are in,” she shared.
“We’ve added a lot of leaders to our mix to continue to progress and give our residents the best experience they can have when moving into one of our apartment communities,” she added.
Like many industries, property management and real estate development are not exempt from facing labor shortage issues. This is one of the biggest challenges, but to deal with this, it has increased its human resources (HR) staff and is trying to use branding and be more creative when recruiting to fill positions. This has included YouTube videos that feature staff.
“Because it’s such a low unemployment right now, it’s not that easy to find employees to work at all of our properties, but we’re trying to market and brand ourselves and add our HR team members, and they’re doing a great job,” said Nettesheim.
The company also makes sure that it keeps current staff happy and lets them know they are appreciated. “We go out of our way four or five times a year to plan various social functions where our employees can mix and mingle: a [Milwaukee] Brewer tailgate game for our maintenance guys across the portfolio, as an example,” said Miller. “We had a ‘spring fling’ where we get together and did some duckpin bowling last spring. We just got off our family picnic where we had over 250 of our employees and family members get together on a Saturday to spend time together. So we really focus on that kind of community and building a community and building relationships between people that don’t necessarily see each other on a daily basis.”
“And that’s what really contributes to that FRED family, so we’re doing things together as a family,” added Director of Property Management and Operations Heidi Kivi. “We work hard. We set up activities to balance that out with rewards and systems and appreciation. And even for myself, working for other companies in the past, FRED is above and beyond the appreciation of their employees which then just flows over into the residents.”
For the staff, being a part of the community is very important. They make it a goal to give back to the people who have helped them achieve their success. Some of the projects they have been involved in are a Habitat for Humanity build and regular participation in United Way campaigns by donating through payroll deduction. To date, they have raised over $26,000. Employees also volunteer with the Humane Society and all of the company’s communities are pet friendly). For the Boys and Girls Club, the staff fixed over one hundred bikes at the Milwaukee Bicycle Collective which were then given out at a National Night Out at a Brewers’ game in Milwaukee.
The community has also recognized the company’s quality and commitment as well. Since 2003, it has won over thirty awards of excellence from the Apartment Owners Management Association (AOMA) of Wisconsin and the Apartment Association of South Central Wisconsin (AASCW). It also received a top workplace award, which means a lot because this signifies that it doing the right things for its staff.
Currently, it has many projects underway. A thousand-unit apartment complex, which began in June 2018 and will be completed by April 2019, is one of the larger. It is also working on 270 units in two buildings on top of retail space in a development project called Synergy at Mayfair Collection in Wauwatosa, which will also feature a collection of restaurants and a hotel.
In addition, it is opening a 268-unit property in Greenfield called Forte at 84South, which is part of another planned development with retail around it, and a two-hundred-unit property near Madison called Fitchburg Square.
One of the most exciting prospects for the future of the company is the recent completion of a merger with a smaller development company called HSI Properties LLC, which will increase the capacity to develop multifamily and other projects. As a result of this merger, it expects to see some significant growth continue over the next four to six years, and this also gives a platform to look at other real estate development that the company may not have traditionally been able to. This merger also adds another 750 units to the management portfolio.
In the development arena, it is not always smooth sailing, and many delays or challenges can arise, but the team members feel like they have been doing a good job at managing those challenges.
“We brought up our construction team internally and do almost all our construction ourselves, so we can manage the projects and manage the risks,” said Miller. “There are challenges there but we are beating those challenges with some pretty unique things and showing the municipalities that we are long-term stable partners for them is one of the ways.”
It has maintained a very open relationship with those responsible for approving projects in the communities in which it builds. “Most of the municipalities we develop in we’ve been in before, and we’ve created great relationships,” said Miller. “We’re long-term holders, so when a municipality approves a project with us, they know that there’s a great likelihood that we’ll be their financial partner in that community for ten, fifteen, and in some cases, we’ve held assets for over thirty years.”
Fiduciary Real Estate Development has demonstrated that it understands what it takes to be successful on all fronts. “It’s a people management business,” said Nettesheim. “We’re managing our teams, and we’re managing our residents, and you have to have two good components to work with our company. One is a passion to do a great job and meet our owners’ goals, but it’s also to meet our residents’ goals and have that compassion to take care of them with their needs of living at our communities.”
And that is the FRED Way.
