Printer Friendly

Property industry celebrating change.

Change was the message throughout Bill Clinton's campaign, and the contancy of change was the theme of his naugural address. On our office wall is ny invitation to the inauguration, displayed as a reminder that each of us has m important part to play in the direcion of the changes to come.

The prospect of change has stimulated optimism, and signs of an awakening economy are evident. Earlier this month t was reported that the index of leading economic indicators soared 1.9 percent in December, its third straight advance, and the biggest jump since 1983. Sales of new homes rose 19.4 percent in 1992, the largest annual climb in 10 years.

Real estate development in New York City is back. The City Planning Comrnission's 12 to 0 vote in favor of the Trump Organization's Riverside South development is indicative of a trend to consider new projects that have the potential of generating economic activity throughout the state.

According to Jerome Belson, president of the Associated Builders and Owners of Greater New York, Inc., "for the first time in several years, real estate entrepreneurs and financial institutions are beginning to communicate."

Even as the smoke is cleared from the White House, this season of change is certain to test us with difficult choices. Witness the explosion of issues surrounding the nomination to fill the nation's "top cop" position. Take a deep breath and put on your seatbelt. This administration is rattling the status quo, and meaningful change will not be accomplished overnight.

The Verdict's Not In

In less than two months, the glow of the inauguration has given way to harsh reviews in the media. Only two days after the inauguration, Lisa Myers of NBC said, "Trump up close, the CI inton White House has looked like the 'Not-Ready-for-Prime-Time Players."'

At the conclusion of the president's first week in office- Eric Engberg of CBS noted, "that Mr. Clinton's "promise to focus on the economy like a laser seemed to come unstuck in the Washington centrifuge."

The rush to judge the Clinton presidency in the first nine, never mind the first ninety days, is unfair. If the administration is to have a chance at breaking the logjam, it will bebecause the America people have the good sense to take time and have more information before reaching a conclusion about the new administration.

When you consider the complexity and diversity of the agenda, and what will be required to reshape huge instimtions and build large coalitions, you're looking at a long timetable. It will not be the stroke of a pen that will. Solve these mega-problems, but rather, the resolve of our people.

Agents of Change

It may be that battering the administration for backpeddling on campaign promises is a lot easier, but certainly less productive than looking to ourselves for positive change. As leading real estate and property management professionals, we can take aturn under the microscope, and look at more effective ways to become agents of change. In this decade, a full-service real estate firm will require the resources and personnel to satisfy the increasingly complex needs and demands of owners who have been hard-hit by the recession. Firms that offer professional property and asset management, as well as sales and brokerage services, are clearly the best prepared to maintain the value of a property for the fast track.

This is no small task in light of the obstacles board members and property management professionals face in their joint effort to protect the investment.

While the majority of board members and managing agents are committed to promoting the health of the asset and the quality of life of the tenancy, co-ops and condominiums can be magnets for the unprincipled.

The board, at the top of the command pyramid, and the management firm operating under it's direction, must collaborate to change the conditions that target a building for trouble.

Preventing Abuses

In an upper east side luxury residence, a board president threatens to resign if two board members are not replaced. After a long and bitter fight, two new members, highly recommended by. the president, are elected to the board. Two years later, the president and one of the new replacements are caught diverting funds.

A successful co-op in Tribeca is encouraged by a powerful board member to deal directly with contractors and suppliers. Six months later, the same member recommends a contractor for a lobby. renovation. The renovation runs way over projected costs, severely draining the reserve fund. Not long after, the member is overheard boasting to other shareholders that the contractor did a great job, and even renovated his unit at no cost.

There are ways to effectively change your co-op's vulnerability to these kinds of abuses. Board officers can institute controls to discourage personal agendas and special interests and limit the power and authority of each member. Members can be helped to understand, and be on the alert for individual actions or dynamics that suggest manipulation or misconduct.

Board continuity depends upon having strict guidelines and policies that are enforced, even as officers and members change. Continuity is furthered by defining the roles and responsibilities of each member and the overall function of the board as 'decision-maker."

A policy of "no kickbacks, no gifts, no special interest, no dipping into funds, no personal agendas," is a good place to start.

Working with a respected management firm is the best way to assure continuity and-enhance board performance. Preferred agents offer board training seminars and comprehensive manuals covering all aspects of the management process. These top-notch firms are committed to promoting and facilitating board productivity with valuable tools and information.

Rating Management

The property management industry has seen rapid growth and change over the past few years. The proliferation of new firms, offering what seem to be similar services, has made picking a winner very difficult. Owners looking to cut costs are cautioned to avoid cutrate service.

We hear stories about successful boards, made up of lawyers and accountants, or architects, really star performers, who have been burned by hiring an unqualified agent. The attraction was the low fee, however, the result was less service, and in some cases, severe and costly mismanagement.

There's no ignoring the talk about 'gifts' offered by unscrupulous agents to board officers as a means of persuading them to fire their existing management company. Change is long overdue.

Unfortunately, as the competition for management dollars heats up, you can expect to see the best professionals bidding side by side with the worst in our profession. While the majority of management firms are reputable and meet or exceed high industry standards, it is critical to choose wisely.

There needs to be a change in the way owners evaluate companies under consideration, with the spotlight on experience, track record and qualifications, rather than on the lowest bid, or monthly fee.

Researching the history of the firm as well as the former ventures of the principals, is time well spent. A history of numerous failed ventures-or bankruptcy may influence the selection of whom you entrust to manage the asset. Get the firm's Dun & Bradstreet rating and a list of references.

Top agents insist on a company policy of "no graft, no kickbacks from vendors, no unqualified managers, no comingling of funds, and no independent or unauthorized activity," and they have a portfolio of satisfied clients to prove it.

Trickle-down Change

When you're dealing with a multimillion dollar enterprise that involves people's life savings and their day-today quality of life, there can be no vulnerability to abuse. Working together, and assuming a shared responsibility for change, professional managing agents and board members can institute safeguards to prevent impropriety, and maintain the asset on the ;fast track for success now, and in the future.

It's a mistake to expect change, economic or otherwise, to trickle down from the top. In every venture, at every level, we can collaborate to break the gridlock, and change for the better.
COPYRIGHT 1993 Hagedorn Publication
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1993, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

Article Details
Printer friendly Cite/link Email Feedback
Title Annotation:Property Management/Improvement; Section II; New York, New York real estate industry shows improvement in 1993
Author:Sapirman, Anita
Publication:Real Estate Weekly
Date:Feb 24, 1993
Previous Article:Watch for dangers of liability deductible.
Next Article:Design firm to provide 'Capital Asset Management.' (Parsons Brinckerhoff Inc. offers new services) (Property Management/Improvement; Section II)

Related Articles
Adjusting to changes key to success in 90's.
Slowdown in new supply may mean bottoming out.
Blue Hill Plaza: 90's success story.
Positive ideas to help change the times.
RE can lead NYC out of the recession.
Rates are low ... and that's not all.
How has NYS Gains tax changed for filers?
Tax changes may stimulate residential market.
Investors will be cautious but flexible in new year.
The changing face of asset management.

Terms of use | Copyright © 2017 Farlex, Inc. | Feedback | For webmasters