Vandenburg aims high for TVO growth Yep, you've heard it time and time again. The multifamily industry is booming and multifamily leaders are kicking butt and taking names.

Acquisitions and mergers are happening all over the country, and companies are racing to partake in the craze. And those who aren't exactly running are gearing up in hopes that they won't be left in the dust.

One of these such companies' CEO and chairman, Wayne Vandenburg, went on the record to speak with Multifamily Monitor to tell of the company's growth, future endeavors and its part in a competitive market. And believe you me, TVO is wearing its running shoes.

Chicago-based TVO Realty Partners, an affiliate of TVO Real Estate Services, serves as a principal in the acquisition of domestic and international income-producing and opportunistic real estate assets. With its institutional partners, the firm plans to acquire an additional $300 million in real estate assets during the year.

With a market capitalization of $645 million, TVO currently owns more than 19,000 units in 12 states. The properties are managed by affiliate EPT Management Co.

MM:When was TVO Realty founded and what goals were set at that time?

Vandenburg: TVO Realty Partners' predecessor was founded in 1978. TVO Realty Partners was founded in 1987 and is now one of the country's largest owners of multifamily apartment communities. The overall service goals set at the time the company was founded haven't changed dramatically other than having been enhanced, expanded and more accurately defined due to the experience gained and the examples demonstrated by other industry leaders. Our service goals were basically to provide a clean secure living environment for our residents, which has resulted in our residents taking pride of ownership in their rental community. Furthermore, it was our goal to provide our investors with a good investment, and we believe that our investors have been very pleased with the performance of their investment.

MM:Have the goals that were initially set been met at this time?

Vandenburg: The goals we initially set have been met both from a service and economic standpoint.

MM:What type of growth has TVO Realty Partners experienced?

Vandenburg: The company has experienced outstanding growth in the number of apartment units owned, specifically in the '90s, where growth in the first few years was 30% to 100% per year because of its relatively small size. Our growth since the beginning of 1994 has been phenomenal - 110% in 1994, 26% in 1995, 21% in 1996, 22% in 1997, and is projected at 21% in 1998. Conversely, our financial growth has also been outstanding and has produced above market results.

MM:Is the company where you want it to be? If not, how do you plan to rectify it?

Vandenburg: While we are very happy with TVO Realty Partners' performance and position in the marketplace today, we always strive to be better positioned and [to] perform at a higher level. At the present time, we are seriously contemplating the change from an asset-by-asset partnership acquisition structure to a private real estate operating company in which to operate in the future. By consolidating our operations into a single operating company, we expect to gain greater efficiencies and gain greater access to institutional capital and operate in a more cost-efficient manner than presently exists.

MM:Where would you like the company to be in five years?

Vandenburg: In five years, we would like the company to be a highly recognized and respected apartment operating company within both the apartment industry and institutional investor community. As a private operating company, we believe that we will be in a position to significantly grow the company through portfolio and corporate acquisitions. Being a private company at this time should allow us the opportunity to secure efficient growth capital to take advantage of changing market conditions.

MM:Has TVO acquired or merged with another company since the company was formed?

Vandenburg: We have not acquired or merged with another company since TVO's inception.

MM:Do you have plans for any mergers or acquisitions in the future? What do you hope to gain by this?

Vandenburg: We plan to acquire other real estate operating companies - private or public - which fit our strategic objectives. We expect to be able to create economies of scale by acquiring existing companies and gain entrance into and/or a large presence in markets where we have little or no exposure at this time. We believe that this will be a very cost-effective method of profitably growing our business.

MM:What makes TVO thrive?

Vandenburg: TVO thrives because of its entrepreneurial spirit, backed up by nose-to-the-grindstone management personnel who have an outstanding commitment to excellence and coupled with institutional investment capital from pension fund partners who support TVO 's vision of the future. Furthermore, TVO has a spirit [that] is best exemplified by 'success is not a destination, it's a journey.'

MM:How do you feel about the future of the multifamily industry as a whole?

Vandenburg: We like the future of the multifamily industry because shelter - housing - is a staple like 'meat and potatoes'; people need housing through the good times and the bad times, and it is our mission to provide the rental public with the best possible housing available to meet their respective economic and personal needs.

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