The Preiss Is Right

by Liza Roberts

photographs by Christopher T. Martin

Once upon a time, if you were a college student, you most likely shared a cramped dorm room with a roommate or two, walked down the hall to the bathroom, drank stale coffee in the campus cafeteria, watched TV from a fifth-hand couch you chipped in to buy, and hauled your laundry down to the basement to wash, quarter by quarter.

Things have changed.

If you are a college student today – thanks in no small part to Raleigh’s Donna Preiss – you just may have your own fully furnished bedroom in an off-campus student housing mecca designed to suit your fancy. Your bathroom is your own. You drink coffee in your suite’s sleek stainless-steel-appliance-appointed kitchen, and watch TV on the 50-inch flat-screen that came with the place. You don’t need to stockpile quarters, because you have your own washing machine and dryer.

“We play a very important part in people’s lives,” says Preiss, founder and chief executive of Raleigh-based The Preiss
Company, the nation’s third-largest privately held student housing provider and an early mover in the industry’s creation. “They’re planning their life’s work. If they enjoy where they’re living, they do a better job at that. We believe we make a difference.”

More than 21,000 students in 14 states from California to North Carolina agree, paying $340-$1,185 per bed each month to live in one of Preiss’s 53 fully furnished uber-dorms with private bedrooms, private baths, utilities, and Internet. More than 7,000 North Carolina students live under a Preiss roof, making the company the largest student-housing provider in the state; in Raleigh alone, its 14 properties house more than 3,500 N.C. State students. These folks typically pay a bit more than they would for an on-campus dorm, but depending on the property and the layout, it’s competitive: a private dorm room typically runs about $667-$752 per month.

Indeed, Preiss properties are so ubiquitous and successful here that it’s hard to remember that the concept of a purpose-built, appealing alternative to on-campus living was new as recently as the late ’90s. Preiss was oneof the first in the industry to recognize that universities are not necessarily best-equipped to serve as full-service landlords – and then seize the opportunity to provide an alternative, says David J. Hartzell, director of the Leonard W. Wood Center for Real Estate Studies and a professor of real estate and professor of finance at UNC Kenan-Flagler Business School.

Donna Preiss, founder and chief executive of The Preiss Company, meets with her senior executives in their Hillsborough Street offices. Her son John Preiss sits to her left; her son-in-law Kyle Barger is in the foreground; her daughter Amy Preiss-Barger is out of the frame. Chief operating officer Adam Byerly and chief acquisitions and development officer Susan Folckemer sit to Donna Preiss’s right; executive vice president DeWana Falks sits across the table.

She grew her vision quickly, and in the process turned student housing “from a niche industry into a respected asset class of its own,” says Doug Bibby, president of the National Multifamily Housing Council, an industry group of more than 1,000 apartment businesses across the country. “Her leadership, business acumen, passion, and energy are second to none.”

If you’re surprised you haven’t heard of Preiss before, you’re not alone. Despite her success, Preiss’s profile has remained low. “She is under the radar in terms of Raleigh real estate,” Hartzell says. “I run into more people who mis-pronounce her name. And yet she is a force in the industry. She’s just a force.”

Preiss herself is quick to credit her family and team, which in several cases overlap, for the company’s success. Preiss’s husband, Kirk Preiss, serves as the company’s president; her son John Preiss is chief investment officer; daughter Amy Preiss-Barger is vice president of marketing; and son-in-law Kyle Barger is vice president of construction management services. There are also half a dozen senior executives who are non-family members. She says she’s learned over the years to lean on the trusted team around her, to empower them to be leaders in their own rights.

They work together, vacation together – last October, the whole team rented a villa outside Nice for a week – and celebrate together. Every Christmas, Donna and Kirk Preiss invite employees from all over the country to their annual holiday party; this year, nearly 200 of the company’s 500-strong workforce (110 based in Raleigh) gathered in the couple’s grand Hayes-Barton home.

Kirk Preiss listens in during the meeting.

“It’s been a good year,” Donna Preiss says. “People feel a lot of pride that our brand is growing.”

None more than the company’s founder, who launched The Preiss Company in 1987 with next to no capital and little more than the strength of her own convictions. A young mother at the time, the UNC-Chapel Hill graduate had spent several years teaching children with emotional handicaps and buying up
Raleigh rental properties on the side. Her husband Kirk was working at IBM and investing alongside her.

More and more, the real estate investments fired Donna’s engines. “I realized this was what I was meant to do.” Growing up in Gibsonville, N.C., she’d helped her father, a post office employee who owned a few rental homes, to help keep them up, painting and cleaning. As her own portfolio of single family homes, duplexes, and apartments grew, the work soon “consumed” her. Today more than 100 of these “legacy investments” remain in the Preiss portfolio. “By doing these things early, I built a business.”

One that’s made a mark. Her success has earned the Preiss Company more than a dozen top industry awards including Business Leader magazine’s Impact Award, the Commercial Real Estate Women Network’s Impact Award, and Student Housing Business magazine’s Innovator and Best Creative Financing awards. Donna herself has also been recognized with Business Leader magazine’s Top Entrepreneur Award, Women in Business Award, and several others.

“In a male-dominated business,” NMHC’s Bibby says, “Donna has succeeded where very few females have.”

College town

At Preiss’s 440-resident College Inn on Western Boulevard across the street from N.C. State’s campus, Preiss greets a group of students walking out of the lobby, each well over 6 feet tall. A large percentage of residents here are athletes, she says, most on the basketball and football teams. “We had to get bigger beds,” she laughs.

Adapting to the needs of students is what sets her industry apart, she says, and it’s a focus she believes particularly distinguishes her company. “You have to understand what (students) think is important, and change. We spend a lot of time observing, reading … I love that new learning.”

When she realized that nobody was using the computer desks installed in the public spaces at many of the company’s properties, she removed them in favor of laptop-friendly sofas and chairs. “Now they have soft seating. You’ll see students in there at 2 to 4 a.m., they’re all in there. Kids today want privacy in public places. Like Starbucks.” At a building like the athlete-heavy College Inn, free meals are popular: “We do one or two food events a week.” Other free social events – trivia nights, movie nights, pizza parties – are in demand at every property. Among other top requests: “bedroom-bathroom parity” and swimming pools.

At the College Inn, a central gathering area is adjacent to a hotel-style pool.

But sometimes what students want isn’t explicitly asked for. When property managers reported in some locations that international students (a growing percentage of Preiss’s student population) were retrofitting bidets onto their toilets, Preiss installed permanent bidets, then advertised them as “global friendly bathrooms.” They leased out immediately.

“The exciting thing is that it’s always changing,” she says. “You have to re-create it every year. You collect data, and you act on it. What drives people to lease? What drives people to stay? You can’t be complacent. You have to up your game.”

As she talks to staffers in the College Inn property manager’s office, Preiss has her antennae up. Mid-sentence, she leans over to pick a stray candy wrapper up from the floor with red-
lacquered nails, tucking it in her purse as she walks past the lobby’s Ping-Pong and pool tables, past the kitchen and gigantic TVs, the sliding glass doors that lead to the swimming pool, the workout room, the tanning bed. She asks Mariana Luciani, who helps manage the building, to show a model apartment. “She knows the players,” Preiss says of Luciani, who is all smiles. “She watches all their games.” Luciani is a former N.C. State student; her fandom is genuine. “It means a lot to say, ‘hey, I saw you play.’ A lot of players’ families can’t come to many games.”

At University Village at 2505, a few miles from Centennial Campus, Preiss again greets a fleet of buoyant, toothsome staffers. “It’s all about the people,” Preiss says. “They’re my favorite people to hang around with.” She picks them carefully. “A lot of people will interview well,” she says, but don’t have the authentic enthusiasm needed to do the job. “It’s kind of like being a camp counselor. If you don’t want to do that, you probably don’t want the job.” She focuses on finding good managers, and allowing them to grow their own teams: “People come to work for people.” She also invests in training and travel, opportunities for teams to bond.

“The challenge … in all business, is not to get out of the rain, but to figure out how to dance in it. The things we’ve been afraid of have provided some of our best opportunities.”

–Donna Preiss

The 288-bed University Village looks like a good place for a bit of bonding. It could be mistaken for the set of a TV show about millennials at play. The gym, the pool, the main living room, the TV area – they’re all huge, stylish, and sparkling. Every resident has a separate lease for his or her own room, and a key to his or her own bedroom door. A shuttle leaves every 15 minutes for campus. “It’s the magic number,” Preiss says. “If it’s over 19 minutes, they won’t use it.”

Every night, Preiss tracks how each property is doing month-to-date and year-to-date, and tweaks things when numbers begin to fall. This particular building is already 34 percent leased for the fall semester; ideally it will be full by spring. “If you can measure it,” she says, “you can manage it.”

Making a difference

Donna Preiss will be the first person to tell you that her success hasn’t come easily. An ability to find deal partners in an industry where she remains an outsider has been a key hurdle to overcome. “It’s a capital-intensive business, and very affinity-driven. People want to invest with people who look like them.” That means male, usually, and when she first began to venture out of her home market, she found that description expanded: “A man who was educated in the Northeast. All of the things I was not.”

Preiss found entree to that broader industry and its capital sources in part through an unexpected route: public speaking. In 2003, an invitation came to speak at a conference on “the new concept of student housing.” Though public speaking was not her forte, she agreed. A man in the audience became one of her first institutional investors. “I think that’s the key for women, is raising your hand, saying yes. I was asked to speak again and again. The public speaking gave me credibility, and gave us the appearance of being bigger than we were.” In addition to opening doors, she found public speaking also crystallized her thinking. “It has helped me so much, to synthesize things.”

In a typical student apartment, Preiss talks to staffer Mariana Luciani, who works in the building’s management office.

Stretching beyond her natural inclinations has grown her skills in all sorts of ways, she says, from leading her workforce to striking a deal. UNC’s Hartzell says her reputation precedes her: “She walks in a room, and you immediately know she knows her stuff,” he says. “She gets it. She’s everything you’d want a real estate partner to be. She’s honest, she’s forthright, she’s smart, she truly understands how that asset class works, and as an early mover, she’s really ridden the tide with the growth of the industry.” Being a woman in a man’s world, he says, doesn’t seem to have affected her at all: “People see her as they should – as a confident deal-
maker. They know what they’re going to get.”

Preiss says if anything, being a woman has galvanized her: “We had to work harder and as a result grew stronger, and probably grew better. I have oftentimes been in situations with people I felt were smarter, or more articulate. But I knew they wouldn’t outwork me.”

Staking her own claim is something Preiss has done from an early age. “I didn’t want to have a safe life,” she says. “I wanted to have a life where I challenged myself.” Going to Chapel Hill for college was a first step: “Nobody I’d ever known had gone there.” It was where she met Kirk, who won her over with his sense of adventure and kindness. “He always acted like everything I said and thought was so special. He always believed in me.” Nothing else, she says, has been as important: “The single most important thing is finding a life partner who believes in you,” she says.

“Purpose-built student housing – it was revolutionary back then.”

–Donna Preiss

Preiss’s friends say they’re big believers as well. “She’s not afraid of anything, and she loves challenges,” says Lekita Essa, founder and owner of Raleigh health care provider Lekitacare and a friend of Preiss’s since the late ’90s. When Essa suggested the two get some early-morning, pre-work exercise together by swimming in the Pullen Park pool, Preiss didn’t let a long-standing dislike of being submerged in water get in the way, Essa says. Instead she bought “huge face goggles like she was going deep-sea diving” and flippers so big Essa had to put down the top of her convertible to fit them in. And every morning for many months, they set out for a swim. “She was so determined to overcome that fear,” Essa says. Preiss is also determined, Essa says, to give back to her community. When the two served on the SPCA board together, “she was very instrumental, but she did it quietly. She’s not one that needs a lot of fanfare.”

Caryn McNeill, chair of the board at Ravenscroft school, on which Preiss currently serves, agrees. “Donna brings a singular perspective,” she says, citing Preiss’s “business acumen” and experience with student housing as particular assets. And she’s a champion for women and minorities in her role on the executive committee of the National Multifamily Housing Council, says Bibby.

Meanwhile, at work, Preiss is looking ahead. She’s got new student housing projects in the works, new markets to consider, and possibly, new businesses to enter. Transitional housing for young professionals, for instance, might be interesting. But she won’t decide alone. “When I’m at my strongest is when I am surrounded by people I trust, and I allow them to make a difference,” she says. “I don’t think I’m necessarily a great leader, but I think I’ve been a great entrepreneur. I’m a passionate person. I care a lot.”