Printer Friendly

Superior management vital to building success.

It is no exaggeration to state that in today's economic climate building management is often the key that makes the difference between a successful building and a disaster.

In the go-go years of the 1980's, lax or indifferent management was forgiven by the market which continued to add value to both leases and property.

Today, the world has changed again. In order to generate good results from a property, a manager with expertise in many areas is an absolute must.

A good property manager should feel as if there is a "partnership" between the landlord-client and the management company. If one fails, so will the other and it is only by focusing on the property from the landlord's perspective that the full potential of each building can be realized.

There are obviously two legs that hold up the building's success. On the one hand it is important to increase income, and on the other one has to reduce expenses. None of these areas can be neglected without harmful consequences.

Some of the areas that a manager must successfully address are:

A) Increase Income

Leasing: Although it is not unusual that the leasing agent and the managing agent be different, a building clearly benefits by having a good managing company which also has a strong leasing agent. The prospective leases, as well as all the leasing marketing efforts will then be looked at from a landlord's long-term perspective and not only based on the commissions that can be generated. Vacant space is a valuable commodity to the landlord and a good manager fully understands this and will do what it takes to capitalize on that commodity. The traditional ways are no longer enough; with vacancy rates as high as they are, now one must envision new aggressive ideas with quality and creativity in order to attract and retain valuable tenants.

Collections: This is an area that has increasingly gained in importance over the last years as real estate - along with so many other businesses - has suffered from late and decreased collections. Threats of eviction, which was the best tool towards speedy collection in the past, is no longer enough. A good manager will try to get to the bottom of each individual problem and treat it accordingly - just as the landlord would do.

Tenant Relations Satisfaction: It is not enough to get tenants to sign a lease; they must continue to be satisfied in the building. A satisfied tenant not only will renew in the building but will also provide the property with the best and most effective advertising that exists: Word of mouth!

B) Reduce Expenses

Capital Improvements/Repairs: Capital improvements and repairs are often necessary but this is another area where the manager plays a tremendous role. The easy and convenient way for the manager to address problems is not necessarily the best or most effective for the building. A manager that truly has the interests of the Owner at heart will find the solution that is best suited, rather than spend money that is often inappropriate.

Violations: City authorities have increased their inspectors and inspections and they often very liberally write up violations on the buildings. The result can be substantial fines if any aspect of the building is neglected even temporarily. A good building manager not only knows how to prevent most violations but also knows how best to expedite their resolution, both by correcting the conditions and by properly and advantageously presenting his case at the hearing. The resulting savings in fines and penalties can be substantial.

Tax Certiorari: This is another area whose importance has increased significantly with the current economic climate. Real estate taxes represent a huge portion of a property's expenses and many a building has gone under because of them. Current assessments are often way out of line with the buildings' realistic values and the building manner must work closely and expertly with the attorney who is involved in finding reasonable tax assessment.

Financing: Servicing a mortgage loan or securing new financing have become more difficult than ever since the Banking industry has problems of its own. There is no doubt that current value of properties is difficult to pin down and financial institutions have been looking more and more at the building operations. Banks know that a good manager can operate the building far better than their real estate department can and this consideration is strongly taken into account whenever a decision on financing is to be taken. And of course, an experienced manager can help in procuring and negotiating a loan or a workout.

In summary it is important to realize that the job and duties of the property manager has evolved into a full service function and the landlord who employs such a company with interest and expertise in all areas of real estate is rewarded by seeing his property flourish even in the current pessimistic climate. We tend to hear the disaster stories but New York is still a vibrant city with lots of successful deals happening every day. The trick is to locate the right people who can offer these positive results.
COPYRIGHT 1992 Hagedorn Publication
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1992, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

Article Details
Printer friendly Cite/link Email Feedback
Title Annotation:effective property management ensures success of property operation
Author:Georgitseas, George N.
Publication:Real Estate Weekly
Date:Nov 11, 1992
Previous Article:Law firm negotiates leases.
Next Article:CHIP seminars: help for multi-family owners.

Related Articles
Turning a building into a success story.
Property management propelled into new era.
Expanded roles mandate trusting relationships.
Property management critical for institutional owners.
Financial controls key to selecting management.
Keeping your guard up.
A year of great opportunity.
Management company's growth tied to lifelong experience.
Apartment manager certification key issue in 2000.
Corporate facilities management a 'hands-on' assignment.

Terms of use | Copyright © 2016 Farlex, Inc. | Feedback | For webmasters