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Strategic management: one approach.

Managing a cooperative or condominium building requires more than monitoring day-to-day activities. It requires a property management firm which takes a pro-active approach to providing the best services possible and diligently seeks to keep costs down.

Yet, there is more. A well-managed building requires an overall plan of short and long-term objectives to improve services.

In the 30 years since we started Darwood Management, we've learned a lot about the proper way to manage a building. Above all, we've learned that good management requires a strategic approach to identifying and finding solutions to a building's problems.

Darwood has codified this approach in what it calls its Strategic Management Program. Simply put, it is Darwood's adaptation of sound business principles that establishes goals and objectives and a timetable to accomplish results so that performance and improvement can be measured. Strategic Management takes into account the short-term needs of a building as well as long-term requirements.

Strategic Management is the foundation for every Darwood assignment. It is a carefully thought out, managed approach to property management, rather than the usual band-aid cure. Most importantly, it takes most of the surprises out of running a building and gives the board of directors a comfort in knowing that important concerns are being taken care of and will be resolved.

By setting goals and time frames, Darwood's managing agents can evaluate the success of the programs they have instituted and set new courses of action if the desired results are not met. Darwood's principal objective is to maximize the value of the property and improve the standard of living enjoyed by all residents.

For example, the board of directors in one luxury Manhattan building managed by Darwood needed to reduce costs. As with most buildings, there is not as much leeway as most people think in cutting back. Many costs are mandated, such as various types of taxes. One area for reductions is in personnel. But here, a careful balance must be made between reducing costs and maintaining services.

For this building, we took a strategic approach to this by carefully analyzing the schedules for all the employees and analyzing the peak workload times. We found that we could eliminate shift overlapping and streamline staffing levels. By more clearly defining responsibilities, employees took more responsibility for what they were doing, rather than expecting someone else to do the work. In effect, we improved service with lower staffing levels.

We also stepped up employee training and helped reduce the costs for repairs by reducing the time it took to do the job, improving the quality of the work and relying less on outside contractors. Overall, by looking at the entire staffing picture add setting up specific targets, we were able to reduce our costs and improve service.

When Darwood starts an assignments, it conducts a comprehensive analysis of the financial conditions of the condominium or cooperative association. When the analysis is completed, specific goals are set, taking into account short-term cash-flow needs of a building as well as long-term financial objectives. This includes a review of expenses for insurance, real estate taxes, and payroll in addition to other operating expenses. Darwood also analyzes maintenance collections, purchasing procedure, building policies and the numerous activities involved in the daily operations of a coop or condo.

From this initial review, short, intermediate and long-term objectives are established and a plan of action formulated.

Another element of each plan is to develop capital improvement objectives that protect the value of the property as well as improve the quality of living for residents. Over the years, Darwood has found that planning ahead for improvements avoids imbalances in cash flow and ensures for longer and better service of elevators, boilers, plumbing, and other building mechanical and operating systems.

By putting to paper a strategic plan, Darwood manages the building according to concrete objectives. Regular inspections of the building interior, including boiler rooms, basement, hallways, as well as outside grounds are documented and evaluated. This enables the board, the managing agent and a principal of Darwood to review the target objectives set for the building and evaluate management's success in achieving these goals.

Our strategic management program helps Darwood meet a board's management expectations and improve the financial and physical performance of the property. It is a map, directing us and the buildings we manage to the goal of providing the best services at the most reasonable cost.
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Copyright 1992, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

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Title Annotation:analyzes methods of commercial property management
Author:Rosenberg, Allan D.
Publication:Real Estate Weekly
Date:Oct 28, 1992
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