Building owners expect excellence from property managers.

New York property owners today demand excellence in property management skills with the ability to provide a full scope of services, financial reporting and tenant retention programs while keeping a tight control on operating costs. They further require that property managers maintain a high degree of integrity in all areas of operation.

Whether the buildings are under institutional or private ownership, the standing orders are to reduce costs in the buildings' operation everywhere possible. To reduce costs, property managers are expected to institute operational changes and policies that take advantage of utility company rebates, to competitively bid every service contract, and to reduce staffing levels where possible without diminishing the level of service.

To meet these increasing demands on the property management function, institutional asset managers in particular look for a higher degree of financial sophistication in reporting and management controls.

Today's property manager must be as well versed in the financial operations of the building as in the physical operations.

Concerned with tighter operating margins, with less flexibility to increase rents, owners are looking to managers to be concerned with improving the actual and potential revenue of the property. Short of sacrificing maintenance and service to achieve cost savings, property managers are expected to help build value and improve the return on investment through efficient operations, planning and economies.

One result of these developments is that the job description of a property manager takes on more of the aspects of an asset manager. Management is expected to be more concerned with property cash flow, for example, as well as the overall performance of the property. More and more, property management is required to demonstrate the ability to use superior technology and methods in managing day-to-day accounting and monthly financial reports.

With mounting pressures to maintain or build property values comes an increasing requirement for sophisticated management skills in at least four areas:

As noted, the property management function requires state-of-art financial reporting capabilities and property accounting, covering such data as cash flow forecasting, valuation programs, trend analysis, lease analysis and capital expenditures.

Second, it requires a dedication to error-free property operations. This requires paying attention to details and keeping the building safe, clean and secure and in top physical shape.

Third is administering effective and aggressive leasing campaigns and innovative activity programs designed to attract new tenants and retain current tenants.

Fourth, property managers are being held accountable by the industry to the highest ethical conduct with regard to the hiring and supervision of outside contractors. Recognizing the importance of integrity, Axiom requires its managers to be thoroughly familiar with our company pamphlet, published several years ago and titled "Business Conduct Guidelines."

The emphasis is increasingly on expanded management skills, with an ability to provide expanded services and the ability to reduce overhead and operating costs wherever possible.

For the remaining years of this 20th Century property management's job will increasingly revolve around this dual ability to provide sophisticated and accurate financial reporting and maintaining operational services while keeping a tight lid on costs.

Gerard V. Schumm Vice President New York District Manager Axiom Real Estate Management, Inc.