The New A-Team

Extreme property management

By Paul Rosta on Sep 12, 2012 in News

These days, a capable property manager must carry an extra-large toolbox. An ambassador for the building with an increasing number of responsibilities, they must have an ability to negotiate a lease with a tenant, analyze a profit-and-loss statement, bid and execute a service contract with a vendor, solve problems of every description and lead a multifaceted team.

In addition, the team leader must have an outstanding ability to work effectively with a wide variety of people. They must be equally at ease interacting with the CEO of a Fortune 500 company and with the crew that keeps the property clean. If an individual “is not flexible enough to interface with that broad spectrum of people, he or she isn’t going to be a very effective manager,” notes Thomas Kruggel, senior vice president of operations for Hines’ western region.

That has become all the more necessary as a result of the recession, during which the increased emphasis on cost-effective operations further blurred the line between traditional property management and asset management. “The property manager’s job description has evolved,” notes Marla Maloney, executive vice president & head of property management for Cassidy Turley. The property manager must be able to think creatively about the asset’s role in the client’s strategy, as well as to drill down into the activities that keep the property running smoothly.

In addition, warp-speed advances in technology are influencing the makeup of the real estate management team. While the trend does not necessarily stack the deck in favor of Generation Y, executives say that owners and service providers now expect a high degree of adaptability to a world where property managers routinely walk the property and convey a message via tablet or smartphone.

Service providers and owners also paint a picture of an inclusive approach that extends well beyond the property manager’s office door. “It’s going to have to include both staff members and service professionals, like outside contractors,” says Kruggel of the team. “They also need to be invested in the day-to-day objectives of making sure we hit the target of what the investor wants.”

Indeed, it is hard to overstate the importance of vendors to the team. “They are our eyes and ears on the property every day,” agrees Rose Evans, vice president for property management at Levin Management Corp., which manages a 12.5 million-square-foot portfolio of retail centers in the eastern United States. Often, the reports from contractors address routine issues—an electrician reporting a lighting problem, for example.

But Evans also relies on contractors to catch potentially serious problems. Because maintenance crews are on site every day, they are in an ideal position to notice anything out of the ordinary. Late last winter, a maintenance contractor reported some unfamiliar cracking at a retail property in New Jersey. The property manager, in turn, told the in-house construction department, which called in engineers for an inspection. The engineers recommended several options for repairs, which are under review by Levin’s construction team.

As the recession has increased the volume of distressed properties and foreclosures, it has also placed a spotlight on the skills required to handle properties that change hands suddenly. In what has become a familiar challenge, foreclosures have heightened the value of what might be called “extreme property management.” In these urgent situations, a lender or other client will call and say, in so many words, “We foreclosed yesterday and we don’t know anything,” notes Matthew Stephenson, an asset manager for Voit Real Estate Services Inc. In a matter of days, the property management team must quickly assess the property’s physical condition, the state of its leases, the status of utility bills and other basic issues—all without cooperation from the previous ownership, which has likely left under protest. Not only must all the conventional real estate management skill sets be on hand, from accounting and customer relations to maintenance and security; the team must execute its tasks precisely, at lightning speed and often under the most unwelcoming conditions imaginable. “There’s no one to ask and no one to go to,” Stephenson notes.

Regardless of what new tasks the property management team must take on, it is essential not to lose sight of what remains constant. “This is still a high-touch business,” points out Dean Holmes, COO of Madison Apartment Group Inc., the multi-family affiliate of BPG Properties Ltd. “It’s still a service whose customers want to deal face to face with our managers in the field.” Thus, in the end, “it still comes back to the quality of the team.”

Paul Rosta is a senior editor for Commercial Property Executive who writes about property management topics every month. The full article on property management team characteristics appeared in the September issue of CPE. And be sure to check out the other property management articles in the digital edition archives.