Getting a handle on evolving trends of property management

Real Estate Weekly, Oct 21, 1998 by Robert M. Podstawski

It's apparent that property managers, and the property management industry in general, face changes and challenges from all corners - owners, tenants and investors. In addition, new and emerging technologies are constantly changing the way property managers do business.

Today's evolving real estate market has created a situation where a property management team has to be creative, professionally skilled and on top of these various emerging trends. This ongoing evolution, in large part, is due to the changing face of commercial real estate ownership (fewer owners with larger holdings, the REIT phenomena, etc.). These shifts in the industry change everything including the role of the property manager.

Property managers are no longer seen as just bill-collectors or trouble-shooters. In the new paradigm, property managers have taken on a wide-ranging and more business-critical role. The role of the property manager continues to significantly expand as the ownership marketplace evolves.

At CB Richard Ellis, we believe that the call for integration of services from owners will continue for the foreseeable future. Institutional owners, in particular, want to work with a single account team throughout every phase of an assignment. Therefore, property managers' efforts must be synergistic. This means that the business planning must become more cohesive, the strategy and program implementation has to be more coordinated; and the day-to-day management must become more responsive.

It all comes down to a simple question that owners want their real estate services provider to answer: "How do I maximize the value of my asset?" We believe the answer lies in a concept developed and revolutionized by CB Richard Ellis called "Ownership Services." Through this unique concept, owners are provided with an integrated set of skills in brokerage, leasing and property management, as well as virtually all other real estate services. Backed by these resources, the property manager can maximize a property's value.

In our framework, property managers must not only evaluate a property within the context of its market position, but they also must consider general market trends, environmental factors, regulatory climate, transformation of ownership, financing trends, rental and occupancy rates, as well.

Moreover, with the emergence of high-tech Smart Buildings, tenants (and their business ventures) have increased their technological savvy and sophistication, as well as their dependence on sound managers. They've become more demanding. To compete in ever tighter markets, quality properties must be state-of-the-art. Thoroughly understanding and handling leading edge technology has become a major part of the way property managers are evaluated. These changes are the catalyst in a redefinition of how real estate services firms provide services - in order to attract and, more importantly, retain clients.

To remain ahead of the competition, we provide a team approach, supported by state-of-the-art technology, which includes the prudent use of the outsourcing of select services. For example, last year we outsourced several components of a massive property transfer involving a New Jersey-based household products corporation. Through the skillful outsourcing of certain tasks, the assignment was successfully executed in record time.

To establish a reputation for excellence and to grow, you have to be resourceful. And in the property management field, bigger usually means better. As such, a key ingredient for success today is having experienced personnel, comprehensive resources and quality technical support. Furnishing skill sets that not only meet, but exceed the owner's needs and expectations will always attract and retain business.

Prosperity in today's business environment also comes from capitalizing on the strengths of one's company. A company must possess the critical mass of resources to offer an owner the extra service customers have come to expect. And because the most important facet of our changing industry is the maintenance of high standards in financial reporting, documentation and market analysis, owners today demand a higher level of performance from their property managers. Reports need to be more comprehensive, more frequent and cover a broader scope of information; and budget scenarios - historically created on an annual basis - are re-projected and submitted quarterly.

Furthermore, in order to maintain and build strength, a company must invest in itself through training and staff development. Ultimately, we believe that a broad knowledge base sets you apart from the competition. Therefore, education covering advanced building systems, technical issues, financial analysis, strategic planning, real estate market analysis, changing regulatory and other related issues has never been more crucial.

Furthermore, via e-mail, many owners enjoy access to this information on a daily basis. Additionally, reporting to a property manager's multiple owners can mean the same reports are submitted in various formats to different parties, and subsequently undergo greater scrutiny than ever. In short, custom analysis and projections have become commonplace.