As CEO of Post Properties for the past decade, Dave Stockert has become a familiar figure to many in the local business community. But he became more broadly known during the past year when he stepped into the political arena, leading the failed effort to pass the controversial transportation referendum in metro Atlanta.
Stockert, 50, took on that role while steering his company beyond the recent housing collapse. Apartment owners like Post, which expects $325 million in revenue this year from renting more than 22,000 apartment units nationally, have been doing relatively well recently, recovering quicker than the single-family sector has. Stockert talks about managing through the recession, the unsuccessful T-SPLOST referendum and what he belatedly learned from his father.
Q: You have a better appreciation for the importance of maintaining a good work-life balance than you once had. Would you please discuss?
A: I grew up in Denver. My dad was a lifer at IBM, managing manufacturing plants. He passed on some opportunities in the ’60s and ’70s. At IBM, you moved around the country to advance your career. He made some choices not to do that because he wanted the family to be in Colorado.
I grew up thinking that maybe we did not have certain things materially that we should have had. But I’ve come to realize, later in life, that my dad got it right. At the end of the day, I learned that there’s a whole lot that matters more than chasing career aspirations.
Sacrificing family on a long-term basis is not a sacrifice worth making. There are other ways to get by. But it’s scary for people. In an economy like this, there are some people who do need to be more mobile to pursue employment, but are trapped in their housing. It’s a great tragedy.
Q: That tragedy occurred because your industry started collapsing five years ago, and it’s still hurting. What have you learned about managing through tough times?
A: There are always cycles. You have to go through a few of them before you understand them.
When things are going well, there’s a tendency to think that you’re smarter and better than you really are. And when things are going poorly, there’s a tendency to think that you can’t get out of your own way. Cycles happen. You’ve got to be prepared for the down side of the cycle because it will come.
On the one hand, negatively speaking, I allowed us to be too late into the cycle in the condominium business. As the cycle was turning down, we were exposed on some projects. We started them too late and then delivered them into the bad part of the cycle.
In terms of preparing well, we managed our balance sheet with low leverage to ride through the cycle. If you have too much debt, there’s nothing you can do about it. We didn’t have that so we had options, including refinancing the debt we had at favorable interest rates.
Also, we were able to sell some assets to drive a lot of liquidity. We paid down our lines of credit to zero. And we had to lay off people. It kills you to do it.
Q: Where’s the local housing market right now?
A: I think we’re at the bottom. If we haven’t turned the corner, we’re awfully close. The closer in you are, in general, the healthier the housing situation is across the board. And if you’re in Johns Creek and Alpharetta, for example, it’s healing up quite nicely. Some of the recovery involves people who owned a single-family home who are now renting a home owned by an investor. But it’s still solid ownership.
I think the headlines out of the housing business next year — if the U.S. avoids a recession — will be progressively better news. That will draw some of our customers away from renting because they will get more confident. Still, that will be good for our business because the economy will be getting better if that happens.
Q: The T-SPLOST effort you led was more soundly rejected than anticipated. What did you learn?
A: One of the reasons I got involved was because I saw what other cities were doing that we were not. We had a lot of momentum in the 1990s, partly because of the Olympics, that we no longer have. I worry about the big cities in Texas, especially Dallas, where they are making big investments in infrastructure that we are not making.
No business succeeds by not reinvesting in itself, and a city is not different than a big organization.
But the reality is we asked too much from the voters. We went from zero to 60 overnight, from not doing anything to proposing 157 projects costing $7.2 billion. We blew people’s minds with the scope and complexity of it.
I feel terrible about the outcome. We still have to move forward, understanding the results. A few years from now, we might be able to tee up something that’s a lot more targeted to two or three counties, with a much narrower set of projects. I don’t think that’s going to happen in the near-term. In the meantime, we’re going to be stuck looking over at Texas with some envy.
Q: What’s your best advice for younger workers seeking to advance in a company?
A: I’ve been fortunate in my career that I’ve had some opportunities that I wasn’t sure I was ready for. I was 40 when I became CEO of Post. My advice is that if you have an opportunity that you think is a stretch, take it. If someone sees something in you, run with it. Don’t be afraid. Smart people will figure it out along the way.
Having said that, it’s a humbling experience to figure it out along the way. You do make mistakes. The central mistake we made, starting in the middle of the last decade, was we got into the condo business, which is very different than the apartment business. It has a completely different risk-reward tradeoff. For condos, developers only get the chance to sell them once — and that can be into a bad market.
We’re getting out. We’re sticking to our core apartment business. The worst thing that can happen in the multi-family rental business — if you don’t have too much debt — is that you have to drop your rents for a couple of years during a recession. We can then draw people in and maintain high occupancy rates. Then as the cycle turns and gets better, we start raising rates, which is what’s happening now.
Each week, Sunday Business Editor Henry Unger has a candid conversation, called “5 Questions for the Boss,” with a top executive in Georgia. Some remarks are edited for length and style.