Management focuses on the bottom line.
Computerization has become mandatory, but updating both hardware and software allows managers to take advantage of improvements in technology to provide instantaneous access and even more detailed information. The computerization of operating services, such as heating controls and water meters in some cases, is also allowing more controls over building costs.
"You have to be able to have instant access to information," said Kent Swig, co-chair of the newly purchased Brown Harris Stevens along with William Lie Zeckendorf, Arthur Zeckendorf and David Burris. With 128 buildings, they are the owners of the largest management firm in Manhattan. The experienced group is updating the white-shoe firm with top-of-the-line computers and sophisticated software, a new phone system with voice mail and other technology.
"You have to have the technologies to retrieve information, and maintain books and accounts in great detail, "he said, noting that each building's accounts must be operated as separate entities. "Bringing things into the 21st Century is important."
R. Bonnie Haber, president of RBH Management Corp. and president of the Community Housing Preservation Corp. (CHIP), who owns and manages 300 stabilized and rent controlled units and co-ops in Queens and Washington Heights, is already computerized and said just a recent update of her fax machine to plain paper has made a difference in her office because no one has to photocopy the faxes.
Along with the instant accessibility to computerized information, today's management requirements are more demanding and detailed than ever.
Steve Greenbaum, director of property management for Mark Greenberg Real Estate Co., Inc., that manages co-ops, condos and rental properties, said if anything, managing is getting more involved and difficult. Managing agents, he says, are more involved in budget controls, while at the same time trying to enhance the quality of life for residents.
Said Greenbaum, "We have to look at every line item while improving the value of apartments."
On the commercial side, the day-to-day details are being expanded by ever-increasing governmental regulations. Observes Roger Kahn, senior managing director of Edward S. Gordon, which manages about 55 buildings, "First there was the ADA; now we have the smoke-free workplace regulations; and OSHA has mandated asbestos notification requirements. We're dealing with regulations a lot more today than we used to."
Kahn said working with the owners to complete a yearly business plan if very important. "We can help position the building properly," he explained. If the owner intends to sell the building, it is important to let the managers know. "We can work with our sales department to make sure we can package the property for the different types of buyers," he explained. "If the owner is going to sell [and doesn't tell us] we can be putting together a plan for a new HVAC that would be missing the mark by a mile."
ESG is maintaining costs and quality by having its own in-house employees do work. That is something that Anthony Mal-kin, president of W&M Properties, says they do as well.
Control, he says, is a key factor.
"When markets are improving, rents are improving and money is being made, but people lose track of the fact that you can lose money without funding capital improvements just by not having adequate controls," recalled Malkin.
"Once we figured out how little it should cost us to run our properties, the thing that struck me was how much we were spending," he continued. "It is a meaningful issue when you end up living very close on the margin."
Now, W&M tries to do everything themselves, including cleaning, construction, engineering and management. "Any item on which we can break even or better we do ourselves."
Cambor Management's Robbie Gendels, who manages 22 buildings comprising some 1,500 Westchester residential properties, believes in reducing costs through strict controls. She also takes advantage of Con Ed and other energy rebate programs and tries to get discounts by insuring bills are paid on time, while cutting deals using the firm's buying power. Greenbaum, with Long Island properties in addition to the New York City portfolio, works with Lilco, as well.
The toilet rebate program has also paid off in water savings for middle income buildings, where not too many people have improved the bathroom installations on their own. "My luxury buildings don't want to get involved," Greenbaum added.
At one of the Mark Greenberg buildings, the board, the managing agent and the manager create their own budgets. Then they get together to discuss what stays and what goes. Greenbaum notes an accountant might have an overview of what items cost from handling the books of other buildings and management firms. In this building, this check and balance system maintains cost controls.
"As long as the board is well-informed, they keep the managing agent in check," Greenbaum added. In today's climate, he adds, not only is it important to have a balanced budget, but to have the appearance of being a stable building.
Greenbaum advises using the yearly sponsor amendments to spread the word about a stable building. "That's a great place to tout the building," he said. "That helps to sell the building."
Reviewing costs and vendors of such items as insurance and fuel; refinancing the mortgage and searching around for the best prices in general, can also pay off. Greenbaum's buildings carry a $25 million liability policy to protect the board. "They never sue for less than $5 million," he noted.
Gendels complains about board burn-out in certain buildings. "Some committee members have apathy," she said, because the same cooperators remain on boards. But if there are qualified members running the board well, she says, "you really want them to stay. We have boards that are very involved and keep tight controls while publishing newsletters and even recycling Halloween candy to the poor."
Haber says staying active in industry organizations, such as her presidency of CHIP, has been key to her acquiring knowledge about what rules and requirements are coming up. She also noted it is critical to screen tenants ever more carefully, because a tenant that stops paying rent can cost thousands of dollars in lost rent and legal costs and many months of aggravation.
Jerome Belson, who heads his own company, is another owner who is active in industry organizations as president of Associated Builders and Owners of Greater New York where he has been active in developing and supporting a state management licensing law. "A taxi driver has to be licensed," he noted, but the manager, with the keys to every apartment in the building, does not. "It's more than collecting rent," he said. "You are a fiduciary with all of its awesome responsibilities and great powers. It's a totally responsible position."
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|Title Annotation:||Property Management Supplement|
|Publication:||Real Estate Weekly|
|Article Type:||Industry Overview|
|Date:||Mar 22, 1995|
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