Ask Guy Halperin, president of a 105-unit co-op on West 89th Street, what he expects from a good managing agent, and he immediately ticks off a host of issues: someone who understands the building’s operations, has experience with façade work, roof repairs, and all kinds of maintenance issues. “They need to have the ability to deal with the shareholders, the staff, apartment alterations, questions about maintenance, and being conversant on tax-related issues, insurance-related issues, budgeting.”
With so many facets defining what is a good managing agent, “I don’t expect them to know everything,” says Halperin, “but they should be conversant enough to be able to know what’s entailed and go to the right experts or vendors to ensure that the work that needs to be done gets done.”
Welcome to property management, 2005.
With the regulations and laws regarding the running of cooperatives and condominiums growing ever more complex, and the costs of running co-ops and condos continuing to increase, more and more co-op boards are expecting their property manager to be not only a wiz at helping them operate their buildings, but also a human relations manager for the staff and the shareholders.
It’s a big job to fill, points out Sandra Kerin, the vice president of education for the greater New York chapter of the Institute for Real Estate Management, the nation’s oldest property management association, and a property management executive herself. “One of the hardest things we have to do is match the skills of the individual to the needs of the real estate. If you are not successful in that, you are going to have turnover, or you are going to have an unhappy client.”
For property management companies today, the biggest challenge is training and retaining agents. For while the demands on a manager have increased as boards have become younger and savvier about their investment, there is still no mandatory industry-wide certification for property managers. And this leaves many property management companies scrambling to fill in the gaps in their employees’ education. “Ninety-five percent of agents learn on the job,” points out Dan Wurtzel, chief operating officer for Cooper Square Realty, which manages 155 buildings around New York City, 85 percent of which are co-ops and condos. And the demands can be stressful on new managing agents. “People leave, because they are thrown into a job, and they don’t understand it.”
To reduce the attrition rate, and make up for the gap in experience, different property management companies have invented different solutions. The best way for a newly hired managing agent to understand the field is “working closely with a property manager,” maintains Lynn Whiting, director of management at Argo. At Argo, newly hired property managers are paired with a senior account executive who trains them in the day-to-day details of running a portfolio – how to deal with the building’s staff, how to handle bookkeeping, how to plan an annual budget.
“This is critical,” Whiting says. “You can learn in a classroom in theory how things work, but there is no way they can cover all a co-op’s documents. Even for people like me, who have been doing this for 20 years, new stuff comes up all the time.” With all the different demands on a property manager’s time, from issues of warring shareholders to helping a board check out contractors for a lobby renovation, it can take awhile to get a new property manager up to speed. “Usually, we will start them out with a building, and a senior manager on the account will stay with them until they are able to assume full responsibility on their own.”
The need for mentoring cannot be underestimated, stresses Kerin. “The biggest problem we see is that many of the people coming into the business really do not understand how to maintain a physical asset, in terms of the equipment and in terms of how that relates to creating value for each individual condo or co-op owner.”
A lot of the people entering the property management field today have finance degrees and economic degrees, “and that’s important,” notes Kerin, but to really understand how a building operates from the inside out, that’s experience that only comes on the job. “You need to drag people along with you, and the hundreds of questions that you get from a project – that may take a few days – is going to help them going forward in larger projects.”
At Rose Associates, the company tends to hire property managers who already have at least five years’ experience, but Rose also has a mentoring program, where a senior account executive will work closely with a new property manager until the company’s executive management is certain that he can work solo.
“Our property managers are limited in the accounts they have, because they are responsible for everything,” says Paul Herman, a managing director at Rose. And everything means a lot, including dealing with the building’s day-to-day issues and back-office support (keeping track of minutes, bank reconciliation statements, vendor receipts), attending monthly meetings, meeting with contractors, and serving as that all-important buffer between the building staff and the board, and between the shareholders and the board.
Many property management companies will start out a new managing agent with a small portfolio of one or two buildings, and then increase the portfolio and their starting salary (around $30,000 to $40,000 a year) as their experience increases. A managing agent with 10 years of training can be handling upwards of eight buildings, pulling down $70,000 to $80,000, according to real estate management executives.
The best property management companies not only train their new employees but provide education opportunities as well. Even with years of experience under his or her belt, a veteran agent has to stay current with trends in the industry. “Most property managers are going to be generalists,” explains Neil Davidowitz, president of Orsid Realty. Orsid requires that its more senior agents become versed in specific areas of maintenance and the law, making each one a “go-to” person when questions arise regarding issues such as façade work or asbestos abatement. The goal, says Davidowitz, is to create a pool of experts within the company who can serve as an in-house resource when questions arise.
Going a step beyond seminars and mentoring, the management executives at Brown Harris Stevens have developed a three-tiered system for keeping their property managers up-to-date on changes in the real estate industry. According to the director of management, John Sicree, the company assembles its 30 property managers once a week at its offices at 770 Lexington Avenue for an update on the latest issues affecting the industry. The meetings cover new regulations and trends in industry, and all the firm’s property managers are required to attend.
Along with the weekly gathering, the company hosts a monthly meeting with its in-house counsel, who briefs the property managers on any changes in real estate law. “If there has been a case that has been decided on some element of the law that pertains to co-ops and condos, the in-house counsel goes over it with all the managers,” explains Sicree.
In addition to the weekly and monthly sessions, the company has experts in different fields come in two to three times a year to host workshops, which can be on a range of issues, from alteration agreements and updating proprietary leases to briefing managers on understanding electrical insulation. Brown Harris recently invited a consultant to talk about building security, including such issues as handling packages, types of security systems that could be run from the concierge’s desk, camera and alarm systems, and what to do in case of fire. “I try to come up with two to three major workshops a year that we can send all our staff to,” explains Sicree.
Taking a slightly different path, Cooper Square Realty is poised this month to address the two-part issue of management training – the need for theoretical knowledge and practical hands-on training. To that end, the company will be unveiling a new learning center, complete with 15 stations, where property managers, board members, and building staff can literally see how a plumbing system works, how a boiler works, and what lies under the roof.
The learning institute, a year in the making, is designed to address not just gaps in everyday knowledge, but to provide a training center for both new and long-term employees and board members, so the day-to-day operations of a building becomes part of a board’s generalized knowledge.
“Nobody goes to school to become a property manager,” observes Wurtzel. “A lot of people fall into this by accident. They don’t get proper training; they sort of learn on the job. We wanted to try and sharpen the skills of existing property managers and allow boards to get a better understanding of what goes on in their building from a physical standpoint.”
In the learning center, located in a 700-square-foot space on the 14th floor of Cooper Square’s office at 6 West 43rd Street, property managers will be introduced to the fine art of lintel replacement, how sills are replaced, and what’s involved in cavity construction. There is a computer workstation, a concierge desk, a working elevator, and mini-water tank, all to show the internal operations of a building’s water supply system. The company, says Wurtzel, had long discussed ways in which it could attract and retain more business and, at the same time, “be able to provide information for our clients so they better understand how their buildings work.” After seeing a similar model in Florida, the executives at Cooper Square decided to open their own school for managers in New York.
Not only will property managers learn about the physical operations of the building at the learning center, but “they will learn about environmental issues, compliance issues, how to read a financial statement.” If a building is going through an elevator upgrade, the property managers and building staff will be able to learn about the mechanics of the upgrade in the learning institute, which has a working elevator. “It’s basically a school for property managers,” explains Wurtzel.