The Hidden Profit in Rising Costs (Sponsor Letter)

Brad Gebhard, CEO of Bryan Properties

Dear Fellow Business Leaders,

As we navigate another year of economic uncertainty, I wanted to share some insights from our experience at Bryan Properties that might help your organization weather the current challenges while positioning for future growth.

Like many of you, we’ve faced mounting pressures across multiple expense lines this year. Insurance costs have been particularly challenging, both property and casualty on our multifamily side and liability coverage for our hospitality operations. Real estate taxes hit us hard with reassessments across our portfolio, and supply chain issues continue to impact our new construction projects through tariff-related cost increases on materials and furnishings.

The temptation during tough times is to accept these cost increases as inevitable. I’d encourage you to resist that mindset. We’ve become more aggressive in shopping the market for everything from insurance policies to construction bids. When expense lines feel out of your control, it adds weight to examining every other cost to ensure you’re being competitive. Leave no stone unturned.

One area where we’ve consistently invested, even when margins are tight, is our people. We pay well above minimum wage because we’ve learned that the cost of turnover far outweighs the expense of retaining good employees. This isn’t just about wages. It’s about creating a workplace environment where people want to stay and grow. In a expanding company like ours, providing mobility and advancement opportunities has been crucial to maintaining the continuity that keeps our operations running smoothly.

Our diversification across rental properties, hospitality, and development has served us well during this period. While rental revenue growth has moderated to more historic levels, partly due to increased residential development giving people alternatives to renting, our hospitality revenues have grown and will nearly equal our rental revenues this year. The lesson here isn’t necessarily to diversify like we have, but to understand the supply and demand dynamics in your markets and position accordingly.

The key is balancing cost management with strategic growth. We’ve continued pursuing multi-family opportunities in Lebanon, Rogers and West Des Moines while planning new hotel projects in Columbia and Broken Arrow. But we’re doing so carefully, ensuring each market can support not just our entry but sustainable rent growth over time.

I want to end on a note that reflects our core philosophy at Bryan Properties: stay positive. Yes, it’s hard work. Yes, the environment is challenging. But we’re confident in what we bring to market, and we believe this is another pocket we need to work through, just like we have in previous cycles.

We’re bullish about our region’s prospects. The businesses that will thrive in a changing environment will be those that neither panic nor become complacent, but instead focus on fundamentals such as taking care of their people, being aggressive about cost management, and making strategic investments where the fundamentals support growth.

Brad Gebhard, CEO of Bryan Properties