Almost everyone in real estate has the same complaint about their third-party property manager. The fees get paid whether the asset performs or not. When occupancy slips, expenses run over, calls go unanswered, the management company still collects a sizeable check regardless. The incentive structure that governs most of the industry rewards scale, not results, and owners feel it.
Teddy Abdelmalek was brought on to build the third-party management arm at HH Red Stone, a vertically integrated owner-operator with roughly $1 Billion assets under management across student housing, multifamily, affordable, mixed-use, and senior housing. The decision began with a deliberate question: why create another third party vertical if it was simply going to replicate what already existed? With 25 years in real estate and experience scaling third-party management platforms, Abdelmalek believed HH Red Stone should only enter the vertical of managing other assets for owners of real estate if it could offer owners something meaningfully different. The intention was not to build another traditional, fee-driven manager in an already crowded field. Either the company would challenge the conventional model and create stronger alignment with ownership, or it would remain focused on owning and operating its own investments.
That confidence led to a performance-based structure that ties a significant portion of the management fee directly to NOI’s performance, measured monthly. The model creates shared accountability around revenue growth, expense control, operational execution, and the overall business plan. Put simply, HH Red Stone performs best when the asset performs at its best.
Abdelmalek is presenting an NOI case study at Blueprint this September, walking through the practical best practices that turn owner alignment and the proptech they have used into real results. It’s one of hundreds of sessions across three days where the people actually building the future of the built world share what’s working and what isn’t. If the conversation below is any indication, the hallway conversations alone will be worth the trip.
BH: Tell us about HH Red Stone and your role there.
TA: HH Red Stone is a vertically integrated real estate owner and operator with experience across student housing, multifamily, affordable housing, mixed-use, and senior housing. Our largest concentrations are in student housing and multifamily.
Most recently, HH Red Stone was recognized as one of the top student housing operators in the nation, earning the No. 10 position in J Turner Research’s 2025 Student Housing Company Online Reputation Assessment, or ORA, Power Ranking. J Turner Research evaluates the online reputation of more than 3,200 off-campus student housing properties across review sites and internet listing services, representing an estimated 1.78 million beds nationwide.
Today, HH Red Stone oversees approximately $1 billion in assets under management across the country. For most of our history, we primarily owned and operated our own properties. In 2025, we made the strategic decision to expand into third-party management, giving outside ownership groups access to the same operating platform, leadership team, systems, and performance standards we use across our own portfolio.
I was brought in to build out the third-party management and business development arm of the business. I had over a decade at a large institutional owner and investor scaling its third-party business. But my honest first reaction was why do we want to do this. There were already so many property management companies in the industry, and owners did not need another company offering more of the same. So, I put the question back to the firm: what is it about our model that would cut through all the noise?
BH: That’s a creative way to interview for a job…interviewing them.
TA: I wanted to join something forward-thinking where I know I could build something meaningful. My view was simple: unless we could create something genuinely differentiated, there was no reason to pursue third-party management at all. They could simply continue owning and managing their own assets and create value for themselves.
So, they turned it around on me. “You’ve been in real estate 25 years. You’re the expert. What would you do differently?” That’s the question that produced the model.
BH: And what was the answer?
TA: Nearly every owner has a frustration with a third-party manager. The sentiment is usually the same: I am paying you a fortune, you could have done this better, you did not respond in time, and you never give my property enough attention. And based on that, I wanted to build something that disrupted that dynamic entirely.
What we said is, if we were managing our own asset, how would we want to structure the deal so that it was advantageous to the owner and protected us from the frustrations of the industry. What we landed on is an owner-aligned, performance-based structure that connects our compensation directly to the asset’s performance. We charge a base management fee well below the market average, and we only earn more when we meet or exceed the budget NOI. When we hit the target, the owner pays us slightly more than a traditional manager might have cost, but when we miss, we absorb the difference. That level of alignment remains rare in property management. Alignment isn’t what you say, its what your structure rewards.
BH: Walk me through the economics.
TA: Take a property with $5 million in revenue. A traditional manager might charge around 4% in student housing and, depending on the asset’s size and scope, potentially more in multifamily. At 4%, that is $200,000 a year to manage a $5 million asset.
Now say the property produces only $4 million, representing $1 million in lost revenue. 4% of $4 million is $160,000. The difference to the manager between a fully occupied building and one that has lost $1 million in revenue is only $40,000. That may not materially change the manager’s economics. Meanwhile, the owner has lost $1 million in revenue, and the manager still earns six figures for 80% occupancy and high vacancy. How does that make sense?
Consider how the economics work for our model now: Our performance fee is evaluated monthly against the property’s NOI target, giving the owner a clear, cumulative view of our results over the full fiscal year and in real time. If we consistently meet or exceed the NOI budget, our blended management fee may rise above 4%, potentially reaching approximately 4.25%. If we fall short in any given month, we earn only the 2% base management fee for that month. At year-end, the blended fee reflects our actual performance and the value we created, rather than simply the revenue the property generated.
BH: Why hasn’t this model become more common?
TA: Because it is the harder road to take. Large management companies have built profitable businesses around scale. Asking them to move to a model that places more of their compensation at risk would require changing the economics of their entire platform. The common response is that managers cannot control every expense, that a flood or a bad winter is out of their hands, and that anything beyond revenue is difficult to predict and control.
I would push back on that. We cannot control every event, but we can control how well we anticipate, mitigate, and respond. Frozen pipes in a vacant unit are not simply the nature of the business… I would argue that if the heat was checked and maintained, you could mitigate said issues. Excessive charges for electricity in vacant units is not inevitable if lights, thermostats, and HVAC settings are actively managed. When the fee structure does not reward that level of attention, those details are easier to overlook.
We think like owners because we are owners. Every asset we touch, whether owned by us or entrusted to us by a third-party client, is held to the same operating standard.
BH: Does this make you more selective about the deals you take on?
TA: Absolutely. The question we ask ourselves is straightforward: can we add value here, and can we be successful? If it’s yes and yes, we’ll take the deal.
That selectivity is harder for pure-play managers whose business depends entirely on management fee volume. Because we are owners as well as managers, our third-party growth can be intentional rather than volume-driven. We can walk away from a deal when we do not believe we can create value.
BH: Then why get into third-party at all?
TA: Two reasons. First, talent. Buying deals at an attractive basis is difficult right now, and we are selective, so making deals pencil is difficult because we are disciplined in that regard. So we do not always have a huge pipeline of acquisitions to keep our bench continually challenged. Third-party assignments, especially challenging assets, give our people real problems to solve and room to develop under our leadership. When you put very talented people in situations where they must solve difficult problems, and they flourish and grow.
Second, third-party management can create long-term investment relationships. When we take over a property, improve performance, and build trust with ownership, that relationship can sometimes lead to future acquisition, co-investment, or development opportunities. Because we already understand the asset and the market and are intimately involved on the operations, we can move efficiently when the owner decides the timing is right to sell.
BH: Blueprint is focused on technology and innovation. What role does technology play in your operations?
TA: Technology is a supplement to the human side, not a replacement for it. The way I think about AI, it should reduce administrative burden and allow our people to spend less time behind their screens and give more time and attention to our residents, improving the resident living experience.
We also use technology to strengthen leasing. Earlier this year, we launched ‘LeaseMagnets’ to engage prospects more directly, create additional opportunities to showcase our brand, and highlight the quality of our properties. The NOI case study I am presenting at Blueprint explores the practical impact of that strategy: how we created a faster, more personalized digital leasing experience that streamlined the prospect journey, increased engagement, and produced measurable occupancy gains while remaining disciplined with the marketing budget.
BH: What are you looking forward to at Blueprint this year?
TA: This is officially my first Blueprint. I was set to go last year and my kids brought home every virus daycare had to offer, so I missed it unfortunately. I’m looking forward to connecting with like-minded owners and operators and the PropTech community, and to learning what’s genuinely cutting edge right now. The networking is a big part of it for me.
BH: Anything else you’d want people to know?
TA: My path into real estate was unique. I started out managing on-campus housing for an urban institution in Kansas City, and I got into the business when that institution did a public-private partnership with a developer. That’s where the story began, and I’ve now worked across more than 200 markets in the U.S.
The thing that stays with me from all of those markets is how much local knowledge matters. You can have all the data in front of you, but until someone has actually stood on the ground in a market, you don’t really know whether to develop or manage on one side of the interstate or the other. The data gets you close. Being there is what tells you the truth.
People often ask what motivates me to work so hard. Everything I do in real estate is about building a future legacy for two very important people: my son (Fred) 3 years old and daughter (Elle) 2 years old. They are my why. My drive. My daily reminder that passion and commitment are not just professional values, they’re personal ones.
Every deal I close, every asset I help optimize, every partnership I build, it’s not just business. And none of it would be possible without my wife Ciera, my partner, my support, and the one who makes the late nights and early mornings possible especially when I travel for work.
Together, we’re showing our kids that when you work with heart, lead with integrity, and never stop chasing what matters, you build something bigger than just a career, you build a legacy.
The lesson I hope to pass on to my kids: That when you work with integrity, lead with purpose, and stay relentless in your pursuit of excellence, success follows. I’m honored to serve my ownership clients with that same level of dedication because I believe they deserve someone who approaches their investments with the same discipline, care, and determination that I bring to building a future for my own family.
