With adult communities, planning paramount.

The growth of active adult communities, as well as new, amenity-rich and recently converted condominiums, has reached unprecedented levels in the tri-state area over the past several years. Real estate owners and developers such as K. Hovnanian, Pulte, Toll Brothers, Metro Homes, Centex and Crescent Heights are all active participants in leading this trend. A vital area, especially during the construction phase and pre-occupancy stage, is allocating the appropriate costs for the building services that will be required to appropriately operate these new complexes for the future residents.

Over the past year and a half, I have had the opportunity to meet with countless owners, developers, management companies and accountants who are tasked with allocating the budget numbers for the services that are being marketed to prospective residents. This is a crucial and often overlooked step for determining the appropriate maintenance fees being charged per individual unit, as well as comparing those fees to the marketplace. In addition, having an outside service consultant/professional allows for a more accurate and meaningful assessment of the overall staffing and service levels required (based upon site-specific building amenities and configurations) and for accuracy in profitability and cost calculations.

Calculations that need to be factored into the budget process include wages, benefits, insurance and miscellaneous items, such as screening, training and uniforms, as well as the following building services: concierge and doorman personnel; security guards, maintenance personnel (from the superintendent through to the handy-men); and janitorial personnel, Furthermore, accurate budgets are required for valet parking, signage, pest control and more.

Having someone within the industry, but outside of the ownership group, review the site plans and drawings, as well as meet and discuss the service expectations of the community or complex, at the time when planning and estimating is still on-going, saves a great deal of time expense and guesswork during the critical phase of the first closing. During this important time, there are a number of critical factors which affect the costs and service levels at a particular building or community. For example, the number of trash chutes per floor, or compactor rooms per building, as well as the recycling system, will affect the number of janitorial personnel (or hours of service required). The skill set and function of a concierge, such as whether that individual is making dinner reservations or obtaining theater tickets, as compared to a front-desk individual who greets residents and their guests on a daily/nightly basis, can influence the overall budget number for that service. And the number of handymen, as well as the role of the chief engineer or superintendent, depends on the work order system and number of units in the facility.

As a service professional, I am extremely excited about the extraordinary growth and change that is taking place in the industry. It is an important responsibility we have to assist our clients in assigning budgets based upon service requirements and expectations. Our current portfolio of new and existing development projects we are servicing spans over 30 properties in New York and New Jersey. This expertise provides a clear understanding and unique perspective that many owners, developers, management companies and accountants are leveraging to ensure that the numbers being inputted in the spreadsheet are indeed the appropriate ones. I believe the trend of utilizing service professionals as objective consultants will only increase as these groups realize the true value being provided by having us at the table.

BY ROBERT FRANCIS 

PRESIDENT

THE PLANNED COMPANIES