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Fundamental shift in third-party property management.

The world of third-party retail property management has changed dramatically during the past decade, most recently--and notably--with the trend among institutional players and asset managers to target their management outsourcing by working with firms that specialize in a niche geographical area. This has meant a boost in new business for quality managers with local expertise and hands-on capabilities.

How is this fundamental shift impacting shopping center tenants? At Levin-managed centers, it is increasing ease of access to and familiarity with their property managers. Large national property management firms often will assign 30 or 40 centers to an individual manager. Our managers are more local, enabling them to be on hand more often. Each is assigned responsibility for no more than six or eight centers, allowing the manager to inspect each property, monitor services and meet with tenants, all on a weekly basis.

Recently, for example, we were awarded an assignment for a center where not one tenant knew the name of their prior property management firm--let alone the name of their assigned manager. Our managers are required to pay frequent, regular visits to each property. We expect that each tenant at our centers knows that individual personally and is confident that they will receive a timely response to any issues that arise.

Additionally, national firms often implement management and leasing plans that follow a "cookie cutter" format. A regional firm is more apt to think like an owner, assessing the unique needs of each individual center and paying close attention to the details that define its image.

Clearly, the ability to provide a proprietary approach, hands-on attention and local market expertise make regional third-party managers an attractive option for institutional owners and asset managers. However, only those management firms that also can provide a level of operational sophistication that mirrors that of their clients will succeed in this emerging arena.

Technological capabilities provide a great case in point. We are in the process of upgrading to the company's browser-enabled version, which we will run as an Intranet. But we also run four other major accounting systems within our fully integrated network, including MRI, two versions of Yardi, and CTI. Recently, we upgraded our corporate network to speed remote access and communication.

While the scope of our accounting technology may seem overly extensive, it is a direct result of assignments with institutional and asset management clients. Some of these new customers have benefited from technologies we installed for earlier clients. However, many have brought their systems with them because they desire to maintain reporting consistency across their national and international portfolios. To satisfy this need, we have incorporated the additional applications during the past few years.

With the sophisticated and increasingly complex reporting required of institutions, these systems can assist greatly in processing and customizing financial information coordinated and consolidated from various areas, such as property management, leasing and construction.

By eliminating many manual tasks traditionally associated with retail real estate reporting, these systems save an extraordinary amount of time and minimize room for human error.

In essence, marrying a hands-on approach with multiple technologies has been the key to our recent growth and will be the formula for success for other regional third-party property managers looking to capitalize on increased business from institutions and asset managers.

Those that win assignments from this elite clientele will contribute to the next generation of property management with an approach that benefits the tenants and centers they serve.

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Title Annotation:INSIDER'S OUTLOOK
Author:Evans, Rose
Publication:Real Estate Weekly
Date:Jan 4, 2006
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