As featured on GlobeSt.com
COSTA MESA, CA—What makes the difference between a good property manager and a great one? That topic and others related to property management were addressed at yesterday’s IREM Orange County’s Asset Management Roundtable: “A View from the Top: What do Asset Managers Really Think?”
GlobeSt.com and a packed room of attendees listened as moderator Chris Hite, president and CEO of Coreland Cos., asked panelists what makes a great property manager. Drew Stepanek, VP of asset management for Stockbridge, said it’s important to “have an opinion. A property manager has their eyes and ears on the ground. It takes a strong personality and an open partnership with the property owner. Communication is important—talk to me like you’re an expert on the property.”
Scott Felix, EVP of Hutton Development Co., agreed that personality is important, as well as attitude. But integrity is a property manager’s most important asset, he added.
Scott Murray, VP of asset management for Greenlaw Partners, said knowing what’s going on with tenants’ businesses is key. “It’s about relationships. Sometimes you have to be the bad guy, but turn it into a positive for the tenant. And provide tidbits of information for the owner that are useful.”
Allison Lynch, VP of asset management for Watt Cos., added that in retail it’s important to understand how the retailer is doing and what his business model is. “What are they spending their time doing?” A good property manager will also present solutions to challenging situations and leverage their firm at the table.
The panelists agreed that a great property manager never loses sight of the fact that the property is an investment. Piling on landlord projects and CAM charges is not good business, and they should be more aware of the financials now than they were 10 years ago.
Transparency and truthfulness are also important. “It’s not a good relationship if you’re not getting the truth,” said Stepanek. “Don’t hide anything.”
Felix admitted that being a property manager is “a tough job, and it’s easy to get buried in detail.” But, he added, it’s important to know how to “manage up” and clue the owner in to the things that will save him money, like talking to a tenant before his lease expires.
When asked what their “go-to metric” was for asset management, panelists said dealing with “cash-on-cash” and meeting distribution. Stepanek said he doesn’t have a go-to metric, but deals with situations on a case-by-case basis because “different investors are looking for different things.”
Hite interjected that “communication is important,” and Felix commented that it depends where an asset is in the life cycle. “If I had to use a single metric, it would be ‘Where are you in the aggregate overall vs. where you were when you started in the transaction?’ ”
Some of the panelists most challenging issues were dealing with dark stores across the street from a great retail center owned by someone else, understanding Title 24 and the potential TI costs involved and making the transition from construction through stabilization since “nobody knows where retail is going,” said Felix. Lynch said to expect more diversification of portfolios over time, and Murray said, “Know enough to make a recommendation on a solution to a problem.”
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