DONALD H. LEVY Account Executive
Donald H. Levy sees himself as both a detective and a diplomat. “You have to do a lot of investigating into the cause of problems,” he says, referring to a call he has just finished with a contractor concerning damage to a building façade. “That’s time-consuming but relatively straightforward. Dealing with the shareholders is another matter.” That is where the tact of a diplomat and the skills of a professional negotiator come into play.
Levy has both those abilities, which he has had to develop in order to survive and prosper in what most would admit is a tough job. For 25 years now, Levy has been a property manager, both in the field and at a desk. He is currently settling in as executive vice president and account executive at Brown Harris Stevens, his sixth post since he entered the field in 1980.
Management was not his first choice: after graduating from Columbia Law School, he spent 13 years at S.M. Frank, a company that designed smokers’ pipes. “Since I don’t think any of us has seen anybody smoking a pipe lately, I pretty much put that business under,” he jokes. “So I figured why not try my hand at real estate management?”
It was an opportunity that seemed more appealing than going into corporate law. A cousin was the owner of a real estate management and brokerage company, and the 38-year-old ex-pipe executive started working with him. He has rarely looked back.
The bespectacled Levy, who speaks in a matter-of-fact, reassuring manner from behind a cluttered desk in his east Manhattan office, is a manager with a difference: his firm practices an increasingly rare form of management that had once been the industry standard. It is a two-tiered system in which a building’s management is split between two people: an account executive, who handles the back office and administrative work, and a property manager, who handles the site inspection. Both agents attend the monthly board meetings. (Levy also handles two other buildings under the single-tier method.)
“The reality is that there are virtually no two-tier systems left because of purely economic factors,” he notes. “Leaving aside revenues from other sources, like brokerage and things that have nothing to do with management, it’s very difficult to be able to get a building to pay a high enough management fee to support whatever our salary ranges might be to run a building [in that way].”
There are pros and cons to having two tiers. On the plus side, it allows the manager to handle more buildings (Levy manages nine, including his two single-tiers), and also gives a property the benefit of two professionals’ know-how instead of just one. “Another advantage is that a lot of the property managers are relatively newer to the industry than the account executives, so it also serves as a training program,” he observes. On the negative side, there is more opportunity for things to fall between the cracks and/or for finger-pointing by the two managers.
Levy says the system’s strengths outweigh its weaknesses. “For an old guy like me to be the account executive and not to have the same responsibilities of being out in the field as much and running from building to building, certainly has some advantages,” he observes with a chuckle. “And, besides which, you’ve got, in a situation like the one I came into when I got here eight months ago, instead of just taking over a whole portfolio of buildings, knowing nothing about them, I’ve got the continuity of working with property managers who have already had varying periods of time working with those buildings, the staff, and the people.”
The manager, who came to Brown Harris after serving as director of management for six years at Lawrence Properties, sees management as a challenge, full of rewards as well as frustrations. “You kid around about the fact that, maybe every three or four years, somebody sends you a small ‘Thank You’ note, which you immediately laminate, and put up on your wall. Because it’s essentially a highly labor-intensive, relatively thankless business. But if you can, in fact, deal with the complexities of these properties and the people and the egos, and keep things on track and help to improve their values and their homes, that gives you a good deal of satisfaction.”
He proudly shows a visitor his trophy plaque for “Manager of the Year,” awarded him by a former employer, Insignia Management, in 1996. He has also received a Habitat Management Achievement Award. Belinda Markel, a board member at the 191-unit 50 Sutton Place South, has nothing but praise for Levy, with whom she has worked for ten years. “He’s very knowledgeable and helpful,” she says. “I’m impressed with everything he does for us. He will follow up and call. If there’s a problem, he will come over. He’s a very thorough guy. He is, quite frankly, a phenomenal managing agent who goes above and beyond the call. We’re at Brown Harris now because we wanted Don Levy.”
Typically, the account executive leaves his home in Forest Hills to begin his workday at about 8:30 or 9:00 A.M. and ends it “whenever it ends, either at 6 or later, if I have a board meeting.” On an average day, he sits at his cluttered desk, taking phone calls, reading documents, or dealing with the unexpected visitor.
“Mr. Schumacher is here for a 10:30 appointment,” says Levy’s assistant, who has been with him for a decade.
“I don’t know a Mr. Schumacher,” replies Levy.
“Perhaps he’s a disgruntled contractor,” jokes a visitor. Levy laughs and offers a more likely explanation: “We have another manager here whose first name is Livi. There’s often confusion.” Sure enough, Schumacher had come for Livi not Levy (the two agents later pass each other in the hallway, giving rise to an odd-sounding exchange: “Hi, Don.” “Hi, Livi”).
“I didn’t create this mess just to impress you – my desk generally looks a lot like this,” he says at one point, indicating the piles of paper scattered around his desk top. “You know, massive amounts of paperwork come in. Just as an example, at the moment the thing that this is resting on is a mortgage binder for one of the Park Avenue co-ops that I manage. A question came up at a board meeting – excuse me…”
He answers the telephone and, after a number of “uh-huhs” and “yes, I sees,” asks a few questions, thanks the caller affably, and hangs up. “That was an exterior contractor who has been doing work on one of the properties that was left behind at Lawrence, and a couple of issues have come up about the board not making payment promptly,” he explains. “He was hoping to get me to help convince them that he should at least get paid for whatever he’s done so far.”
Such calls are normal, as is the rest of Levy’s day, which will often find him shuttling between floors (Brown Harris Stevens occupies three floors and owns the building it is in), sometimes seeking out closing documents from a room lined with filing cabinets and shelves (with some paperwork going back to the 1920s), and other times meeting with the boards that hold morning or lunch-time directors’ meetings at the management offices. He is also currently pinch-hitting with fellow agents in the firm for an account executive who “had a hip replaced last week. We’ve divided up his properties for the six weeks or so that he’s going to be out,” Levy says, indicating some paperwork an assistant hands him: “I got one of his Dag Hammarskjöld properties, so this is just something that he wants taken care of – staff bonuses.”
He talks with both excitement and wariness about new technology: “I am about to get a Blackberry, which I hope doesn’t overwhelm me. It’s an electronic device most commonly used by attorneys and investment bankers, and it combines everything from a cell phone to [displaying] all of your e-mails. It’s something you carry on your belt and I’m sure it’s going to be wildly intimidating for me. But what happens is that now there’s a lot more communication with boards that was never in existence before – the electronic. The e-mail exchanges go on at an almost daily basis. [The equipment has] become sophisticated, breaking boards down into groups so that, for instance, I’ll have one e-mail code that’s just for the executive committee of a board, and another code for the entire board.”
He takes pleasure from his family: a wife and three children, the youngest of whom is in law school, and from his hobby: keeping track of the weather. His office contains not only a barometer but also a device that monitors the cloud cover and weather patterns minute by minute.
Although some may say that dealing with metaphorical storms is what management is all about, Levy sees the weather in more literal terms, “You do need to pay attention to it, only because of the possible impact of real negative weather. During the Nor’easter of 1991, I was with Manhattan Pacific and we managed The Corinthian. The wind ripped the curtain wall off of about the 46th story of the building, and it actually went through the roof of somebody’s townhouse a couple of blocks away. Thank goodness, nobody was injured.”
“I was also managing a complex on East End Avenue, 90th and 91st, and the force of the wind pushed the East River over the retaining wall, and actually flooded out the entire basement of [the complex], killed all of the mechanical systems. A two-story garage, all the cars were floating to the top, and then the water stopped just before getting over to the next property, which was mine. But those types of things, sure, they take on a different meaning whenever you’ve got serious storms coming in, whether it’s snow in the winter, and you have to have enough staff on and make sure you have salt and shovels, or heavy rains and all of the buildings that have terraces and drains, and you have to make sure the staff has the drains cleared, because otherwise you’re going to have them back up, and have serious flooding problems. All of those types of things.” He smiles. “It’s all part of the job.”
Man on the Scene
B. Kerry Smith Site Manager
On a recent morning, B. Kerry Smith sits with his office manager, Ann Woods, to review the day’s schedule. It is packed with meetings to discuss apartment renovations, fire extinguishers, fitness center equipment, security enhancements, newsletters, and upcoming holiday events. No time for lunch, but that’s the usual for this busy site manager.
Smith, general manager of 860/870 United Nations Plaza, knows the meaning of a home business – his business is at the home of some of New York’s wealthiest and most prestigious residents, including corporate CEOs, top journalists, and even the Japanese ambassador. “I have everything a site manager might hope for,” he says, referring to his property management employer, Manhattan-based Rose Associates, and the loyal staff of 51 that run the two-tower, 340-unit Turtle Bay co-op.
Resting atop 866 United Nations Plaza’s six-story office space, two residential towers stand 38 stories high and contain 170 units, each ranging from one-bedrooms to duplexes. Apartments run from $500,000 to $5 million. Built by Alcoa Plaza Associates in 1964, in part to showcase Alcoa’s aluminum-and-glass building façade, the towers are two distinct corporations and have different lot and block numbers and different boards of directors.
The co-op corporations own their respective air rights but not the commercial space. That belongs to Manhattan-based Vornado Realty Trust. The space contains and controls the towers’ electricity, its sump pumps, and the complex cooling-and-heating system, making a good relationship between the co-op and Vornado vital to shareholders’ comfort and the co-op’s ongoing success.
One of Smith’s many duties is making sure that the relationship remains smooth-running. An Upper East Side resident with graduate degrees in both international relations and real estate, he seems the perfect person for this property and job. “I suppose I’m a diplomat still, if that means anything,” he says.
And a diplomat he must be, not only to effectively work with the two boards and the large staff, but also to handle the co-op’s committees and the hundreds of shareholders. For example, the residents of each floor decorate their own hallways based on consensus. Each is assessed for the decoration, which can mean trouble if someone disagrees with the decision to redecorate or with the chosen décor. That’s when Smith may need to help smooth things over. “The door’s always open,” he says. “People need to know they can always come in and see me. They need to know [issues] will be responded to.”
Smith notes that he is very dependent on his staff as well as his employer, Rose Associates. He says that, although “you can’t get up and walk over to a colleague for advice about an issue,” a strong management company is crucial to a site manager’s success. He telephones his managing director – who hired Smith away from his previous employer specifically to work at UN Plaza – several times a day for advice and direction. And while resident manager Frank Marko and Smith both sign off on all bills, the bills are released for payment at the main office.
The co-op’s site manager for seven years, Smith says that focusing his attention on one property is a far cry from his days as a portfolio manager of 1,000-plus units. “I think your ability to be effective is compromised by the number of buildings you have and the kind of buildings you have,” he says. With one property and an on-site office, “it’s just so much easier to be that much more hands-on.”
The two 13-member boards mean 26 board members total, with each co-op corporation having separate newsletters and holiday parties, and three board meetings a month – one including both boards. The property’s amenities include a fitness center, pay parking garage, roof deck, package room, dry-cleaning valet, doorman-attended private driveway with two-hour parking and Smith’s on-site management. Among the co-op’s 51-member staff are handymen, doormen, security guards, elevator operators, and resident and assistant resident managers, all members of Local 32BJ. New employees are generally referred by existing staff members, and once hired, they rarely leave.
Forty staff members are trained and certified to administer CPR and defibrillation (the buildings have four machines). In fact, recently a service-car operator performed the Heimlich Maneuver on a female resident as she choked on an apple. The staff’s annual payroll totals about $2.5 million, not including bonuses and tips. Residents expect – and receive – the best of service.
It takes a special kind of person to oversee all this. Smith’s office door is open all day, every day, five days a week, and he is always on call. Shareholders walk in to the management suite about four times a day, usually seeking Marko, whose office sits next to his. One of the city’s most well-known resident managers, Marko has lived and worked at the towers for 25 years. The former assistant chief engineer for Hillcrest General Hospital in Queens remembers Smith from the days the site manager counted One Beekman Place, across the street, as one of his properties. “He’s a wonderful boss,” Marko says. “A great guy to work with.”
While Smith knows the scope of everyone’s duties, he does not get involved in other people’s jobs unless he has to. Running the property is “a collaborative effort between Frank and the staff and the boards and Rose,” he says. Instead, he focuses on the administrative side of things – financials, share transfers, legal issues, projects, and for much of the last two years, insurance.
Although located about six blocks north of the United Nations, after September 11, 2001, the insurer deemed the property high-risk – diplomatic missions make up about half the office space – and premiums skyrocketed from $40,000 per year to $500,000 per year for each tower. He fought to lower the cost and even met with the New York State Department of Insurance, finally managing to drop back down to about $400,000 per year per tower.
Board members seem to trust Smith and appreciate his efforts. “It makes the job of a board of directors a lot easier and eliminates the necessity to micromanage, which boards of directors tend to do,” says Donald Bady, board president of 870 and a former CEO. Bady and Smith meet about twice a month in Smith’s office, surrounded by pictures of his children and museum prints of Degas and Gauguin paintings. He has close interaction with Robert Hodes, 860’s board president, as well. Both are longtime residents.
Smith is happy that his career focused on the residents’ quality of life.
“People tend not to move out once they’re here,” he notes. “They may upsize or downsize according to their needs, but most residents [recognize] the quality of life here and they don’t want to leave.” And, although he, in fact, answers to three masters – two boards and Rose, he loves being able to focus on one property, one place, one universe. “You are that much more appreciated. They know you more. That doesn’t always happen in property management.”
His 25 years of experience help him in every aspect. “I suppose a successful site manager needs enough experience to know how to respond to day-to-day issues and management issues,” he says. “A board like this [one] would not respond well to a novice.”
MICHAEL DONUK Property Manager
On a bright, cold morning in early November, Michael Donuk, a property manager with Argo, stands in the backyard of the co-op at 309 East 87th Street, listening carefully as the engineer explains a potential hurdle to the upcoming garage roofing project. Pointing out the proximity of several air conditioners to the garage’s roof, the engineer is recommending an expensive change in the work order: moving the A/Cs further up the wall so the machines don’t interfere with the flashing (the weatherproofing material that insulates the bricks and the roof). That means removing the A/Cs and their metal sleeves, bricking over the holes, and building new alcoves for the A/Cs higher up on the wall.
Donuk frowns. Breaking through the building’s exterior to construct nine new A/C sleeves is an expensive proposition – and the building’s shareholders are already paying $700,000 for both an extensive repointing and the garage roof weatherproofing. Donuk questions the engineer closely: Is it possible to install the flashing with the A/Cs as is? Would the flashing warranty cover any potential leaks, even if the A/Cs weren’t moved? Is it absolutely necessary to remove the A/Cs and build new and smaller A/C alcoves higher up the co-op’s back wall?
After the engineer finally acknowledges that it is not absolutely necessary to move the air conditioners, Donuk heads back into the building. Problem solved; now he has another issue to deal with before heading to the office: a shareholder is complaining that her unit’s pipes were banging in the morning when the heat came up, and she wants him to do something about it. The Argo property manager will have less success fixing this than he had getting the engineer to back down from his expensive proposition regarding the A/Cs, but still it has been a good morning. He has headed off a potentially expensive outlay of money, and the very expensive capital project is on track to being finished by the end of the month. And it is only 11 A.M.
“A lot of times board members don’t see all this,” explains Donuk, referring to the behind-the-scenes negotiations with the engineer and the back-and-forth over pricing. “If there is anything I would like boards to understand, it’s that there are a lot of things that go into getting this done – dealing with staff members, vendors, trying to get pricing down.” Then there are the other aspects of his day: shareholder complaints, staff issues, alteration agreements. “I don’t need to go in there and toot my horn,” he says of his meetings with boards, “but at the end of the day, when I get an $800,000 project in on time and under budget, that’s a reward in and of itself.”
For Donuk, learning the ropes of property management was something that started early. The youngest of four children, he grew up trailing after his father, a superintendent who managed buildings during the day and ran commercial cleaning crews at night. For years, Donuk senior worked two jobs, saving money to buy several small buildings that he then managed with his wife. The 37-year-old property manager credits his father with instilling him with a “get it right the first time” attitude.
After high school, he did a brief stint as a property manager and then went to work for a small construction firm, where he was field supervisor. The company often bid on work with the city, with either the Housing Authority or the Housing and Preservation Department, and Donuk learned the ins-and-outs of construction projects, from bidding and payroll to overseeing work sites. But after several years of dealing with the city, Donuk felt that enough was enough.
“It was a huge headache, having to qualify for projects and then bid on them, get the forms together and apply for the money, and then wait 90 days for the money to come.” Everything took a long time and there was no guarantee that the bid would be accepted. “When you are underbid by $100,000, there is no way to survive. I saw the writing on the wall and I left. I came back to the property management field in 1996.”
Four years ago, Donuk went to Argo, and for the past four years, he’s been the property manager for eight buildings, seven in Manhattan, one in Queens, a total of 1,200 units. All of them have benefited from Donuk’s experience in construction. He is careful, detail-oriented, and loath to spend more money than he and the board have budgeted for work. “My problem is when I have to go back to a board and tell them I have a problem,” says Donuk, explaining why he had pushed the engineer at East 87th Street until the man acknowledged that the scope of work didn’t have to be changed.
“The most challenging aspect of dealing with the board is that you have to make sure that when you are asking them to approve spending money on a project, big or small, that you have all your reasons. If any co-op or condo is spending $700,000 on a project, spending more money is always going to be an issue,” says the property manager.
“He works very well with the board,” observes Lydia DeSantis, the president of 309 East 87th Street, calling Donuk “hands-on” and someone who “stays on top of everything.” Her only complaint, says DeSantis, is that she would like him to spend more time at the co-op. But because of the number of properties he manages, “that’s beyond his control,” she acknowledges.
It is, agrees Donuk. “Right now, I have four façade projects going on. In the last three years, there have been three building upgrades.” Then there are the meetings, the paperwork, and the site visits. To keep track of all the projects is a complicated act of coordination. “You can’t possibly visit every building every day,” says the manager. “I try to get to buildings once a week, at minimum” – more, if the building is undergoing extensive repairs and alterations. “I also try to pop in on the weekends. It keeps the staff on their toes so they don’t think, ‘Mike’s here every Tuesday at 10, so we can goofball off the rest of the time.’”
Most mornings, Donuk is at work by 9 A.M., either at his office or one of the buildings, or downtown dealing with a city agency over a summons or some other aspect of running a residential building. Then it’s over to Argo’s offices at 50 West 17th Street to answer phone calls and e-mails, read letters, contact contractors, answer questions from board members, and read buyer applications. There’s always an apartment alteration agreement to review, a letter to a contractor to be written, or some dispute to settle. Being a property manager is time-consuming, but there are benefits, admits Donuk. “The one good thing is, we don’t punch a clock.”
Good property managers know how to maintain a balance – working late, juggling building visits, and finding downtime all in the same week. But the freedom comes with responsibility. No one can expect to get all his work done within an eight-hour day. To be a good manager, you have to be prepared to put in the hours. “We are not 9-to-5 workers,” says Donuk. “You can’t be a 9-to-5 worker and be a property manager.”
Over the past five years, there have been a number of different projects going on at a 116-unit co-op at East 73rd Street. And Donuk, the building’s property manager, has done a good job of keeping on top of all of them – from the boiler installation and the elevator upgrade to the façade work. “I would say he’s one of the better property managers we’ve had,” says Jerry Sherwin, the co-op president. “He’s good on the follow up. Good on details. He has the building’s interests at heart.”
“At any given time, you have countless projects going on,” says Donuk: apartment renovations to keep track of, roof work, Local Law 11 work, staff issues. For him, the most rewarding aspect of the job is seeing a big project, like a capital improvement, through from start to finish. That includes preparing the financial spreadsheet for the board members so they can figure out how to fund the project, bidding out the project, hiring the contractors, and getting the job completed on time and under budget.
The harder aspect of being a property manager is dealing with the nitty-gritty issues that tend to be more subjective, such as squabbles among residents or assessing whether pipes in a radiator are banging loud enough to be bothersome for a shareholder. Then, too, boards always want more attention for their particular building, he points out. Sometimes it’s hard to make them understand that each building’s board feels the same way, and a property manager needs to prioritize.
With so many buildings, it’s hard to find downtime, though Donuk does manage to squeeze in visits to the public golf course in Brooklyn’s Dyker Heights. “That’s my country club,” he laughs. And he likes to travel – a lot and far away. This past year, he went to Iceland; next year, he plans to go to Antarctica.
For Donuk, property management isn’t an easy field. “You need to be very patient, for it can get frustrating,” he acknowledges. When meeting with boards to go over issues, there’s a lot to think about, particularly if it has to do with an outlay of money: does the building have enough, can the shareholders afford it? When will the money be paid back? Do they dip into the reserve? When sitting in these meetings, “you have to think about the entire building, and have everyone’s best interests at heart.” If the building is doing an assessment, for example, “you have to take into account the financial wherewithal of the shareholders. Sometimes the board doesn’t see all this.”
But that’s okay. Being a property manager may not be very glamorous. It may not land you on the front page of the paper or in the gossip columns, but it comes with its own rewards. “It’s a lot of hard work. You are in the trenches. But as long as the work gets done, there is a lot of freedom.”