Zimmerman Properties LLC
- Written by: Eric Gundberg
- Produced by: Ken Lambright
- Estimated reading time: 4 mins
A lot of companies looking to expand naturally gravitate toward selling products and services in larger cities to attract the most number of customers. Zimmerman Properties LLC, operating out of Springfield, Mo., proves that in some instances bigger isn’t better for the business, and this attitude is better for the clients. Zimmerman’s Chief Financial Officer/Chief Operating Officer Bob Davidson, who has been with the company over a decade, explains:
“We specialize in Section 42 housing, and we pride ourselves on specializing in secondary and tertiary markets – towns with a population ranging from 10,000 to 100,000 people. We bring those towns quality, efficient, modern and most importantly affordable housing. Without the federal tax credit programs, most of these towns wouldn’t have any new rental housing. In Texas, for example, where we have a strong market presence, most of our competitors focus on Dallas, Houston, Austin and San Antonio. We’re much more interested in building in Amarillo, Midland, Longview, Palestine and Brownfield.”
Zimmerman is definitely not new to Section 42 housing. The firm has specialized in superior apartments at affordable rates since Congress passed the Tax Reform Act in 1986, and it has been instrumental in developing well over 7,000 units in the past two-plus decades. The Tax Reform Act allowed developers to claim a tax credit for developing housing for moderate and middle-income families. As with any government program, it sounds a lot simpler than it is. Potential credits are allocated to state housing agencies based off of census data. A firm wishing to participate in the program must go through a lengthy application process with typical amounts of federal red tape.
Zimmerman Properties has proven especially adept at navigating this niche to offer housing options in the Midwest that feature state-of-the-art amenities, while keeping rents within reason. Zimmerman doesn’t just specialize in building affordable housing, either; the firm designs, builds, and manages properties through a series of affiliated businesses – such as Zimmerman Properties Construction, Zimmerman Investments LLC and the property management firm of Wilhoit Properties Inc. The firm builds primarily in the states surrounding Missouri, including Kansas, Nebraska, Illinois, Tennessee, Oklahoma, Arkansas and Texas. Its workforce of 180 – including the property management personnel and the construction force that handles all framing, while other trades are subbed out – contributes to approximately $40 million in annual activity.
Stimulus Package Helped
Davidson details how the industry has changed since Zimmerman started Section 42 housing. “The last couple of years have been interesting, because prior to the subprime meltdown the bulk of tax credits were sold to Fannie and Freddie Mae. After they blew up, it really put a hurt on our industry and a lot of projects came to a screeching halt. As a company, we retrenched a little, but the American Recovery and Reinvestment Act in ’09 rebooted the program with an interesting twist. Instead of offering a tax credit, the government stimulus program provided a federal grant to building low-income housing. That’s always been our bread and butter, so we’ve been able to stay busy building six new apartment developments while other companies are on extended vacations.”
Green Building Before it was Trendy
Another factor in these government-associated projects has been the federal emphasis on incorporating green building techniques, and Davidson reveals that Zimmerman was building green long before it became an industry trend. “We incorporated green building practices long before most of our competitors. We’ve consistently tried to use sustainable building practices on our apartments and aim to develop energy-efficient housing. For example, we recently broke ground here in Springfield on a new senior housing facility that will be a Bronze-level NAHB-certified Green Building Community.”
One of best part of Zimmerman’s approach is that by focusing on specific designs that work well for smaller communities they are able to give local vendors and subs a clean picture of materials needed before the project even starts. The projects don’t get monotonous, however, because the buildings are scattered across smaller communities in seven states. “We get great economies of scale, and our regional sub-contractors and vendors know exactly what they’re building, as they’ve built it 70 times before.”
As for plans for the future, Davidson says Zimmerman plans on sticking with the formula that has made the company a success over the years. “This strategy works for us; we have new and existing investors like Google and Verizon joining the tax credit market. We’d like to expand out of our seven-state region, but that’s about the only change that we’re going to make. If you look across the U.S. and subtract out the major cities, that still leaves hundreds of millions of people who potentially need housing.”
It’s refreshing to see that a company can bring quality affordable housing to the smaller communities that make up the backbone of the country and still be successful. As the economy continues to strengthen so will the communities where Zimmerman Properties, LLC has a presence, and the company is setting an example for developers everywhere.
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