FEATURE ARTICLE, OCTOBER 2007

SPECIALIZING PROPERTY MANAGEMENT
Property managers seek ways to stop pinballing their duties.
Paul Mendel

Specialization permeates both our professional and personal lives. Gone are the days of the generalist. Attorneys, doctors, CPAs and other professions are now highly specialized in very narrow niche fields.

If you are having a retina problem, you don’t just see an ophthalmologist, you engage the services of a retina specialist. Should you tear your ACL in a pickup basketball game, you bypass the orthopedist and immediately see a doctor specializing in sports injuries of the knee. If you want to assist your parents in estate planning, not only do you seek out the services of an estate planning attorney, but you need one that specializes in elder care law as well. Even professional baseball is in on the act. Teams pay for relief pitchers that specialize in getting out left handed batters. Usually, they pitch to one batter and they are done. In the American League, they have the designated hitter and their only job is to hit — no fielding required.

The world of commercial real estate is not immune to specialization. Instead of an investment broker that represents buyers or sellers of various types of real estate, we now see brokers that deal only in land or multifamily with a minimum number of units or office buildings with a minimum of 75,000 square feet.

One segment of our industry that has not ridden the wave of specialization is property management. The property manager, sometimes known as the project manager, is typically required to handle a multitude of tasks all in the same day. If real estate were a pin ball machine, property managers would be the silver ball, property owners are the flippers, tenants are the bumpers, and contractors, vendors, service providers, city authorities, asset managers, leasing agents, etc., are the bells and lights. The typical property manager bounces around throughout each and every day, attempting to provide the services and performances demanded by tenants and owners.

But to truly perform as a professional, a property manager must not be a pinball careening from side to side, up and down, day in and day out. So, the solution is to reduce a number of secondary functions that many of today’s property managers have assumed. Actually, by off-loading some of these functions, tenants will be served more effectively and may actually thank you for being more focused.

The day has arrived for property management companies to place their rafts in the ocean and catch the waves that will give them a ride all the way to the specialization shore where all the other specialists are sunning themselves and thriving. Managers that specialize will provide better service to their tenants and owners, and, if they are doing their job properly, will save money for these same tenants and owners.

Specialized property managers not only concentrate on the meeting the needs of the tenant and building, but they can build better relationships with tenants and make each one feel special.

There are several areas that stretch the time and capabilities of the property manager. Tenant improvement projects and associated construction management duties are services that draw property managers away from their daily management duties. A construction/facility management group can be more responsive, contain costs and can deliver the improved space in a timelier basis. By handing over this function to another set of specialists, the tenant receives prompt and direct attention and micromanagement of the project. A tenant’s suite is built-out to their exact specifications, and is always finished on time and on budget. Owners are ensured that the construction cost is competitive and up to code, and that all permitting is completed properly. The bottom line is that a new tenant moves into their space very satisfied with the services provided. Thus, on the first day of occupancy the property manager inherits a very satisfied new tenant and they are given more time to devote to other tenants and building(s) during this process.

In a full-service lease, the landlord is responsible for the operation of the building along with the maintenance within the tenant’s suite such as lights, cleaning, and HVAC operation. However, there are many facility issues and needs that tenants incur during the normal operation of their business, including electrical; the relocation or addition of phone and data ports; the relocation, installation and purchase of cubicles and cubicle repair; and research and purchase of a security or card access system for the tenant’s space. Additional areas include furniture procurement and repair; redesign and build-out to accommodate the changing needs of the company; or the management of a vending machine program in the company breakroom.

By creating a construction/facility management arm of your company to relieve the tenant of these facility burdens, you enhance your relationship with the tenant and increase the value of your property management firm to building ownership. The tenant can maintain employee productivity by taking facility issues off their shoulders. In addition, the work will be achieved faster and at less cost. Why? Because your management firm has specialists that can scope out the best solutions and the best prices. The tenant can reap the benefits of your expertise, versatility and vendor relationships. Once again, you increase the likelihood that a renewal will be accomplished.

The most important objective for any property manager or owner is tenant retention. The cost savings are huge when a space remains leased. A vacant space means decrease in cash flow, and a guarantee of a large future tenant improvement cost and higher commission expense to release the space.

By offering these and other similar services, property managers are free to handle the crucial day-to-day needs of the building and its tenants, and concentrate on the initiatives and goals of the owner. Ownership goals, such as managing expenses and maximizing the value of the asset, are crucial. In this era of e-mail and voice mail, we have become quite impersonal. Enabling a property manager to have the time to personally visit tenants on a regular basis also enhances the relationship, and will differentiate your firm and personnel from most of the competition.

Tenants and owners want proactive service not reactive responses. Being the pinball means you are reacting to the action of the bumpers and flippers, having no control as to the direction you are heading. Property management firms can be proactive by enlisting specialists to handle some of these time-consuming services, so managers can focus on servicing tenants and owners.

Paul Mendel is vice president with Atlanta-based RB Management.


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