Learning from setbacks, Roers concentrates on building more worker-centered culture

This time, Brian Roers is “sleeping like a baby” as growth surges at Roers Cos., the multifamily real estate company run by him and his brother, Kent.

He attributes that largely to lessons learned — about culture, managing the business and focusing on employees — after “one of the biggest firm failures,” when growth overtook the company in 2017.

“Kent and I kept pushing the business, and we didn’t focus on the team enough and bringing them with [us] or in putting the right people in the right spots,” Brian, who co-owns the company with his brother, recently recalled. “All of a sudden, we woke up one day and didn’t have enough people, so now you’re burning people out, and we didn’t have the right people.”

Those aren’t concerns now, with Plymouth-based Roers Cos., launched in 2012, on pace to reach 20,000 units built and $5 billion in development by 2025, Brian Roers said.

The company, active in 14 states, has a large affordable housing program, with 2,500 units under construction, and has raised more than $550 million in private equity. Roers Cos. was the 2023 Developer of the Year in the Minnesota Real Estate Awards and ranked 25th among the nation’s largest apartment developers last year, according to the National Multifamily Housing Council.

Brian and Kent Roers this year also are finalists in the Ernst & Young Entrepreneur of the Year for the Heartland region. They also were finalists in 2021.

To manage growth more effectively, Roers Cos., 38th on the Star Tribune Top Workplaces list of midsize companies, is doing something that goes against the grain for Brian, given his accounting background.

“In this growth spurt, we have been hiring ahead,” he said. “That’s not the best financial thing, always, to do in the short run because it’s hard when you’re hiring ahead of where you’re going. But that’s the need, and we’re not going to do what we’ve done in the past.”

That’s not the only change. After the company’s earlier challenges with rapid growth, the Roers brothers used the Organizational Culture Assessment Instrument (OCAI) to understand the culture in place then and make changes to improve performance. The result is a culture under which the company hires, promotes and parts ways with employees based on traits such as passion, teamwork, work ethic, integrity and an ownership mindset.

“Brian and I have come a long way in the last three years, probably, around the whole culture topic,” Kent Roers said. “Maybe we wish we would have started that a bit earlier and built that framework out. That could have helped us on retention and other positive factors if we had had that more established and more at the forefront of everything sooner.”

The brothers also have adopted the Entrepreneurial Operating System as a framework for managing the company and aligning its goals and vision with results and growth.

“It’s really a system to moderate us as entrepreneurs and put the focus back on the team and how they can run things,” Brian said. “We have an accountability chart that shows who does what, and you’ll see Kent’s name and mine on there very little. We really did have to put trust in the teams.”

That has occurred as Roers Cos. has rounded out a “vertically integrated” business model. The firm added an in-house development team in 2020 to expedite new project origination, which Kent credited with driving much of the company’s current growth. Last year, it formed an internal contracting department to oversee construction. Those joined the construction management and property management teams already in place.

“We have 15 projects under construction that our construction company is doing,” Kent said. “It’s just been massive growth.”

Roers Cos.’ values include cultivating an ownership mindset among its 260-plus employees, 160 of whom are in Minnesota. For example, Roers now offers bonuses to company leaders in the form of shares in market-rate projects, Kent said. Employees also have opportunities to invest their own money in projects, with the company adding two dollars to every dollar an employee puts in.

“We’re a real estate investing firm that that invests in our people,” Brian said. “We’re looking for high-performing teams, and the way to get that is by taking care of them.”

Learning, leadership and development plans also are in place, and the company caters lunch twice a week and hosts all-company meetings twice a year. It hires professional coaches for thirty people identified as future leaders, Brian said. He and Kent each have two coaches.

“We’ve hired up, gotten very driven people and supported them,” Kent said. “And they’ve done amazing. I mean, they’re running these companies, not Brian and I.”

Todd Nelson is a freelance writer in Lake Elmo. His email is todd_nelson@mac.com.