Photos by Rental Equipment Center
One wouldn’t think that the beginning of a pandemic is an ideal time to start any kind of business, certainly not equipment rental. But that’s what happened with Denver-based Rental Equipment Center, which opened for business late in 2019. But a unique combination of circumstances came together for REC and the company is now the leading independent rental player in the mid-range contractor construction space throughout Colorado.
Part of its rapid growth owes itself to the experience of the founding partners. Troy Miller and Jerry Morin started REC in 2019 but both have long histories in the equipment rental industry. Morin can trace his rental career back to Center Rentals & Sales, a Denver-based regional company that was one of the biggest rental companies in the industry when owner Dave Lanoha sold it to then-national rental giant Rental Service Corp. around 1996.
Morin, REC’s president and CEO, has been in the rental business for more than 30 years with his experience ranging from being a territory manager, location manager and district manager for Center Rental and Sales, Rental Service Corp. and other major rental houses in Denver and Minnesota. He was also a location manager for Contractors Equipment Center (CEC) in Denver and was later promoted to director of sales. REC’s chief financial officer Miller has more than 20 years of experience in finance and accounting, merger and acquisition activity, banking and private equity, with an accounting degree and master’s degree in finance from Colorado State University. He was also the CFO for Contractors Equipment Center in Denver.
Miller and Morin met in 2013 when they both worked for Contractors Equipment Center. Morin, a former Center employee, was branch manager for CEC and Miller was brought in as controller. The two men continued to work for CEC until it was acquired by H&E Equipment Services in 2017.
Morin remained with H&E and Miller went to work for D&D Lift, a California-based JLG dealer that predominately rented forklifts, scissors and booms and had been around since the 1980s. Morin came out to do some consulting but he and Miller ultimately decided to return to Denver to join forces on a new rental company venture. D&D Lift was recently purchased by Sunbelt Rentals and its founders are current investors in REC.
“We found a piece of real estate, made a few phone calls to some manufacturers that we knew in the industry and late in 2019 we started Rental Equipment Center,” says Miller. “We gained some momentum and market share those first 90 days and then Covid hit.”
When the far-reaching effects of the pandemic started to become clear, Miller and Morin decided they had two choices: Either sell off their fleet and give it up, or try to persevere despite the odds.
“We were stubborn and made the decision that we were going to try to grow through it and so we did,” Miller says. “We had pretty strong lender relationships, so between the manufacturers, the lenders, an abundance of available fleet and the lack of people borrowing in the summer of 2020, we were able to secure enough fleet for our current needs, so we were up and running.
“Before we knew it, we had $20 to $25 million in fleet and quite a talented group of professionals that we pulled together. Now we’re close to three years into this and we have more than $58 million worth of rental fleet and almost 50 employees. Currently we have two locations – one in Denver and one in Fort Collins (soon to be relocated to a larger facility in Loveland, Colo.) – and our next branch will be in Colorado Springs. The first year, we did about $4 million in revenue, last year we did $11 million and this year we’re shooting for $20+ million.”
Morin says much of the fast success has been related to several pandemic timing factors. “The first is that in the spring of 2020 other companies were looking just to survive,” he notes. “They were cutting costs and laying off extremely talented people just as we were looking to hire. Our company’s success is largely because of the caliber and experience of the staff we have been fortunate enough to employ, particularly in service and inside operations support. Our employees are familiar with the REC culture and have worked in the Colorado rental market for decades. Their experience and commitment are unparalleled in the industry, locally and nationally. The second factor is that there seemed to be a void in the market when it came to strong independent companies.
“Troy and I have worked in this market for the last 10 years. We felt the small to mid-size contractor market was underserved by our competitors and offered us a unique opportunity to take market share quickly. As REC started, everything kind of triangulated with people getting laid off, companies cutting back on their purchasing, lenders looking to loan money and customers that still had quite a pipeline during COVID who needed a customer-focused, local rental center. We were fortunate in our timing and able to seize that opportunity and scale effectively. Once we solidified our customer base, personnel, and facilities, we began expanding to larger customers and other industry sectors."
Morin adds that their experiences prepared them for the challenges the pandemic created. “Even though we’re an independent, in our market we run our business like a national,” he says. “We buy a lot of fleet, we get a lot of customers and we do it the same way the nationals do. We learned a great deal from the nationals we worked for.”
Still grassroots
REC’s customers come in all sizes, spending anywhere from $20,000 a year up to $1 million on rentals, Miller says.
“We have to be dynamic in our approach,” Morin says. “It makes us perform like a national but allows us to still be grassroots enough to interact with the smaller customers.”
The company needs to be flexible enough to deal with smaller customers because it continues to get a lot of walk-in business. “We’re a general rental business. We have around 60 categories of equipment including aerial, dirt, material handling all the way down to sump pumps and trash pumps, which are probably our smallest equipment categories,” says Morin. “We don’t do any homeowner rentals such as lawnmowers, weed eaters or small heaters. However, we do have everything from a 135-foot boom lift to a three-yard loader. Our sweet spot is mini-excavators, skid-steers, scissorlifts, along with 60-foot and 80-foot booms.”
The company’s marketing method is straightforward as well. “We have nine sales reps who go out and call on jobsites,” says Miller. During the early part of the pandemic when just showing up on jobsites was problematic, the sales reps made the contacts through a lot of phone calls, competitive pricing and keeping promises to customers who needed a home-town rental company during such tumultuous times.
“What I learned during my time with the nationals is that the sales reps are the real key to marketing,” says Morin. “We give out company swag and things like that, but it’s the relationships the reps have with the customers that really matter.”
Miller and Morin obtained more than half of their $58 million in fleet in 2021 before all the price increases and significant supply chain delays occurred. “Through the whole growth process this last year, we rarely dropped below 70-percent utilization and ran between 67 percent to 75 percent throughout,” Miller says. “We ran 76, 77, 78 percent at times, but we never grew at the mercy of our time utilization or our dollar utilization. We know what risk factors there are and what metrics work for us in this market.”
REC is, essentially, a company that knows who it is and how it wants to do business.
“Jerry’s go-to-market strategies have been effective for the past 20 years in this industry,” Miller says. “We keep doing what we know works. We don’t take a lot of chances. We don’t try to re-invent the wheel. We stay in our lane. We know the core categories of fleet that we rent, and we know what we don’t want to rent. We know what customers and industries we want to avoid.”
“We are a true rental house,” adds Morin. “We don’t do new equipment sales. We don’t do merchandise sales and don’t do parts and service for profit. It’s not a traditional dealer model, it’s pure general rental. In addition to that, we are accessible. We don’t have a phone tree so if you call into our main line, you will get a live person who is sitting within 10 or 15 feet from an owner who hears every phone call. If there’s an upset customer, we want to know about it, we want to talk to them, we want to defuse the situation immediately. We don’t call them back in two weeks and issue a credit, we deal with it that day.
“When issues arise, we always try to do the right thing for the customer and the employee. If there’s a problem in the field or in the shop, we resolve it quickly. We are focused on maintaining and developing both the customer and the employee experience. Our success is simply a product of our people and the relationships they have developed with the customers. We started REC because of an unmet need for contractors to rent quality new equipment while being served by a team who prides itself on customer service and attention to detail.”
Rental Equipment Center opened in Fort Collins in July 2021 and already has more than $13 million of equipment on rent in that market, which reaches beyond northern Colorado into parts of Wyoming. This branch will be moving to a larger facility in August 2022 in Loveland, Colo., having outgrown its current location.
REC is already working on its next branch, which will be in Colorado Springs, in order to enable the company to cover southern Colorado more efficiently.
“No customer is too big for us,” says Miller. “We know the basic blocking and tackling in this industry. We can get core fleet. We can get the resources and the real estate. What it really comes down to is relationships. Do what you say you’re going to do and do the right thing. In rental, things happen, it’s all in how you deal with it. Doesn’t matter if it’s a $20,000 a year customer or one who spends millions, it still comes down to doing the right thing and the handshake. We do business on a handshake and a basic contract.”