Monarch Bob Nicolls
Tuesday, December 12, 2017
By Rebekah Tilley

What was your first job? Not your first job out of college, but the very first job that put money in your hand. Many of us have similar first jobs:

Babysitting. 

Lawn mowing.

Paper delivery.

Snow shoveling.

The lessons we learned in those first jobs-diligence, discipline, drive-are attributes we transfer into college and finally into a career field. We carry those early employment experiences with us throughout our lives and careers, and each experience is the building block for the next.

Bob Nicolls was no different. House painting in high school later led to career experiences in a Big 8 accounting firm and a Fortune 500 company.

“I had to go out and write bids, and convince people that this dopey college kid could actually paint their house correctly,” recalled Nicolls, who graduated with an accounting degree from UI in 1980. “I didn’t necessarily want to be an accountant. But as Warren Buffett said, ‘The language of business is accounting.’ I thought if I knew the numbers side that would be critical to my career path.”

Today Nicolls is the owner of Monarch Investment & Management Group, which specializes in the acquisition and management of investment grade, income-producing properties. Nicolls harnessed lessons along the way that taught him how to be financially successful and how to treat people well. Due to these efforts, Monarch was recently recognized by The Denver Post as a 2017 Top Workplace.

After he graduated from Iowa, Nicolls was hired by Ernst & Whinney (now EY), had a 360-day stop in the Playboy financial reporting department where his boss taught him how to write financial reports, and was eventually recruited by a big bank with a nationwide apartment building portfolio.

“That was five years of a lot of work – 60-80 hours a week. But I kind of got my Ph.D. in commercial real estate by doing it,” said Nicolls.

Nicolls then teamed up with a client he had worked with when making real estate transactions for the bank.

“We envisioned a company that would be cradle to grave for investors, where we’d identify apartment buildings to buy, we’d close them, manage them, recommend times to sell them later on,” explained Nicolls. “People could invest with us and not have to do anything.”

The other key piece of the vision was sweat equity.

“When we were starting the business, we always got sweat equity in the deals from putting them together. When we closed the deal, we didn’t take cash and say, “Okay, good luck,’ to our investors. We closed the deal and our fees came in the form of ownership of the buildings. That way we aligned the investor’s interests with our interest.”

Founded in 1994, the company’s focus on sweat equity continued after Nicoll’s partner retired and Nicolls transferred the business over to Monarch Investments & Management Group in 2001. Modest and successful, Monarch owned 6,000 units and employed 200 people in 2008 when the financial crisis hit.

“At that time, nationwide apartment building occupancies were around 92 percent because people who simply should not be owning a home were able to own a home,” said Nicolls. “The 2008 financial disruption happened and for four years almost no new product was brought to the market on the apartment building side and the single family side. Yet the population increased and people had to live somewhere. Currently, occupancy is around 96 percent.”

Today Monarch has 40,000 units and has grown its staff to 1,200.

“The fundamental thing for us is we’re an operating company,” said Nicolls. “When we buy, we want to own for the long term. Unless we feel like we have the staff to operate a building correctly, we don’t want to buy it.”

Staffing is so essential to Monarch’s success that Nicolls created an employee relations department-led by his wife Kathy-to help foster a positive work environment. This is accomplished through a number of ways: an excellent compensation package, recognition programs, clear advancement routes, and community-building cookouts and baseball games. In addition, the company makes sure employees have the tools they need to do their jobs well, such as the best gloves, tools, and footwear for maintenance employees plus beautiful spaces to work out and unwind with colleagues and family after a hard day’s work.

But the crowning piece of that equation was something Bob and his partner discovered early on: sweat equity.

“We have 1,200 employees. I think about 500 now are part-owners in buildings we buy,” said Nicolls. “As people advance through the ranks, or if a cleaning person does a fantastic job, that person is awarded a percentage ownership in the new properties we’re buying. That is something that stays with people forever. They’re an owner and very few of our competitors do that.”

With each new property Monarch purchases, on average 50 employees participate in the ownership. Nicolls has found this helps retain good people, which is critical to Monarch’s overall success as an organization.

Despite being based in Colorado, many of Monarch’s investors are in Iowa City. The story goes that one of the people working on Monarch’s loan transactions was Tim Dwight’s roommate during rookie training camp for the Atlanta Falcons. (Dwight played football for UI between 1994 and 1998, and today is a businessman and entrepreneur in Iowa.) The loan officer introduced Nicolls to Dwight who later became a Monarch investor. Monarch now has upward of 60 investors who live in the Iowa City area.

It was on an investor visit to Iowa City that Nicolls walked over to the Pappajohn Business Building-which was built after he graduated from UI-to wander the halls and see if any of his old professors were still teaching. He found Dan Collins, professor and department executive officer, and reconnected with the accounting program.

Nicolls is now on the Professional Accounting Council, and has parlayed his professional success into building the next generation of Iowa accounting students through a number of generous gifts, including support of the Accounting Writing Program-skills that Nicolls himself had to learn on the job.

“We didn’t have a writing program when I was at Iowa,” said Nicolls. “Once you get in the business world, it’s great to be an accounting technician, but you’ve got to be able to communicate verbally and in writing in order to advance beyond mid-level manager. Supporting the writing program at Iowa fit into that.”

True to his Midwestern roots, Nicolls is humble and unassuming. He still has his original 1990s AOL email address because “I don’t want to trouble people” to update their contact information.

“I always say there are two kinds of people in the world: Iowa grads and people who wish they were,” smiled Nicolls. “It’s a great school for academics. Iowans are salt-of-the-earth people. Any excuse to go back to Iowa City, I jump to do it. It’s a great place, and it’s a great school.”