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Following two portfolio managers, Habitat acts a 'fly on the wall.'
A meeting, a crisis, or just another phone call: on the streets and in the back offices with two New York City managing agents.
A meeting, a crisis, or just another phone call: on the streets and in the back offices with New York City managing agents.
It’s TEN O’clock on a Sunday evening. Mike Brandt, a manager with John J. Grogan & Associates, answers the phone in his New Jersey home. One of his nonresident supers is calling because he has heard that a fire has just been reported in a building Brandt manages. The fire department already has gotten everything under control, but that means Brandt’s job is only beginning.
He knows the routine. The damage will extend beyond the blaze, thanks to the aggressiveness of the firefighters. “They just take a lot of water and pour it everywhere,” he says to the super, adding that, “You’ve got to get down there and take a look.” The super lives in Queens. The building is in Manhattan. It doesn’t matter. He has to make the trek, Brandt insists, to be the manager’s eyes and ears. Later, Brandt makes sure that the super knows that showing up late on Sunday night won’t go unnoticed. “You’ve got a lot of brownie points for that one,” the agent tells him.
On Monday morning, Brandt is dealing with the fallout. The super calls in early with a report from his Sunday night visit. The apartment located below the fire is in bad shape: it was flooded. The rest is as expected. But Brandt reflects that things aren’t as dire as they might have been. The building could have been without insurance. At the eleventh hour on Friday, when the co-op’s insurance policy should have been locked up, the broker called Brandt to say that the premium had almost doubled. “At that point, I couldn’t do anything, and it was expiring by midnight. I said, ‘If I can get better coverage, I will but, for now, just [continue] it,’” Brandt recalls with a laugh. “That’s what happens.”
Indeed, as some have notoriously said, stuff happens – and when it does, portfolio managers like Brandt know that they have to jump in the right direction or they’ll hear about it – one way or another – from their boards and their boss.
Management is a high-stakes juggling act. From a board’s point of view, the manager is the guy (or gal) who is there to help solve its problems and make life easier for everyone. As a board member, you expect to hear him report at your monthly meetings, supervise the staff, return phone calls, and see that your building’s bills are paid in a timely manner.
But what goes on behind the scenes? Why are phone calls often not returned? And why do some problems fall between the cracks? What does a manager actually do when he isn’t at your building?
To find out, we visited two firms, Orsid Realty and John J. Grogan & Associates, chosen because they are at opposite ends of the size spectrum. Orsid is one of the largest management companies in the city, with 91 properties in its portfolio and a full-time staff of fifty-five, including eighteen managing agents. By contrast, Grogan has 27 properties with a full-time staff of fifteen and three managing agents. The firms agreed to let us spend a day with two senior managers: Laura Krasner at Orsid and Mike Brandt at Grogan. Krasner has been in the business for eighteen years, nine of them at Orsid; Brandt has been at it for over thirty years, two of them at Grogan. Both depend on support from their back-office staff, but the most noticeable difference between the two is that Krasner delegates part of the work to her in-office team while Brandt operates, to a large extent, as a one-man band and is responsible for almost every aspect of his buildings’ operations.
But, either way, they are both juggling multiple issues at any given time. It’s no wonder that things can get lost in the shuffle; in fact, after spending a day with a manager, it’s a wonder that they succeed at accomplishing anything at all.
Mornings at Orsid
Laura Krasner wants a little recognition – at least from her husband. “I left the office at 10:20 last night. It took me 45 minutes to get home. I was back in the office at 9:30 this morning and today I have three meetings. Every time I complain to him, I know he doesn’t get it. He’s in the finance industry and he’s used to a fast pace, but he’s crunching numbers.” For a property manager, she notes, 90 percent of the job is dealing with people. And that’s a different game.
Krasner is a large woman with a wavy mass of red hair. Her bright red lips and fingernails and her exotic jewelry and blouse all serve to convey a powerhouse of a woman who constantly switches gears while dealing with the properties in her portfolio. In fact, while she talks with a visitor, another six e-mails have snapped onto the computer screen, and Oren Goldstein and Donika Dodaj, two employees whom she supervises, are crowding into her tiny office space to check out issues on a couple of buildings in her portfolio. Goldstein, a dark, slim man in his late twenties is the youngest member of the team. Dodaj, a three-year Krasner veteran, has a soft European accent that betrays her origins in Albania, where she had served as a judge. Now, she presides over the hundreds of alteration applications received by managers throughout the office.
They both wait while Krasner leaves a message for a real estate broker. “Hi, it’s Laura Krasner calling from Orsid Realty,” she says. “I’m calling with a request.” Krasner needs to identify an apartment in one of her buildings that is up for sale and advertised having a laundry machine in the unit. The board members are up in arms. They don’t allow individually owned laundry machines in the units. Krasner suspects a mistake in the ad, but she needs information about the offending apartment.
Goldstein wants to talk with her about a board meeting that’s coming up the next day. He and Krasner will both be attending – Goldstein as the 400-unit building’s manager, Krasner as the supervisory agent – because Orsid utilizes the so-called “team approach.” There is a formidable list of items on the board’s agenda. Dodaj, an administrative staffer, wants to discuss how to deal with a shareholder request to install a one-piece shower lining. She shows Krasner a photo of the unit: “This is how it looks; it goes on top of everything.” The building’s architect has no experience with this kind of installation and can’t give advice. But Krasner doesn’t need photos. She’s already seen the item in a Home Depot, and there is an important question that needs answering: how will the building deal with pipe problems that occur behind the one-piece shower wall? Krasner wants an opinion from the property’s superintendent and leaves a message for him to call her.
Krasner asks how Goldstein is doing with the “to-do” list from the last board meeting. He has a report on summer deck furniture that is being stacked on the roof. “It’s fine, normally, but the engineer wants groups of no more than four,” he says. If it snows, the added weight could drive the chair legs into the roof. Krasner wants closure on the item before the meeting. “Do me a favor and check on it,” she says. Goldstein will visit the building later in the day. While there, he will present the handyman with a special bonus for stepping in when the building was without a super, and he’ll also check out water damage in a shareholder’s bathroom.
The central area in the Orsid office is crowded with small, back-to-back cubicles for the support staff and managers, while senior managers and executives such as Krasner have windowed offices along the outside walls. Every surface in her small office is teeming with piles of manila folders and papers, with an overflow parked on the floor by her feet. Visitors find space where they can between the filing cabinets.
The organized chaos of her workspace is complemented by the constant flow of visitors that she receives. Indeed, the office is always a hub of activity. And now it’s budget time, a period when she often does double duty for most of the properties in her portfolio, attending a regular board meeting and a separate budget session. That’s why Andre Kaplan, the financial controller, has stopped by to discuss a pair of budgets. Peter Hoff, manager for the building that’s having a budget meeting today, is hovering behind Kaplan.
A tall, powerful-looking man, Hoff is the newest member of the team. The board president from the building under discussion is coming to the office later in the day, together with the newly appointed treasurer and another director. A budget shortfall will have to be dealt with and Krasner has worked out a budget that includes a maintenance increase of just over six percent. Like all boards, the group is concerned about the reaction of shareholders to another increase and is anxious to know what other properties are doing.
What they don’t know is that the first draft Krasner looked at had twice the shortfall, caused by a huge increase in the real estate tax. Thinking there might be tax savings somewhere, she got on the phone with the tax-certiorari attorney. He reported that a tax-cert challenge had actually reduced the co-op’s assessed value by over a million dollars. That reduced the shortfall significantly.
Krasner reassures the people at the budget meeting that the increase is well in line with other buildings – and has already been significantly reduced by the tax-assessment reduction. Krasner has the kind of commanding, clear voice that usually only comes with vocal training – in another life, she would have been a singer – and there is not the tiniest inflection left of the strong Russian accent she had at 12 when her family emigrated to the U.S. from Russia. Perhaps the most Russian thing about her now is a big, infectious laugh.
Judi Goldstein (no relation to Oren) phones from her desk down the corridor. The elegant, dark-haired woman, who came to property management with a background as a board president in her own building, is checking on Krasner’s response to the e-mails she has been sending about the property they co-manage. Krasner has already fielded a call from a board director at ten o’clock the night before about a hysterical-sounding resident complaining over some unplanned renovation work.
Krasner asks Judi Goldstein for an update on a parking facility in the building. A new garage operator had taken over without board approval when the former tenant skipped out. “We slapped a ‘notice to cure’ on him,” she notes. Nonetheless, Krasner is philosophical about the issue, saying that the board will probably okay him “as long as the guy pays the rent... He owes three months, plus real estate taxes.”
For Krasner, a key management function is to present boards with alternatives and options – “not, necessarily, to tell them what to do, but to try and steer them down the path that I think makes the most sense.” But, she stresses that a lot depends on the board makeup – directors with professional expertise bring in their own ideas and initiatives.
The PA system in the office suddenly instructs all employees to shut down their computers. For the first time this day, Krasner’s fingers stop flying over the keyboard. She admits she does “14 things” at once. “And I wonder why I come home tired! I couldn’t fall asleep last night. I was so wound up. Like all of this stuff was going through my head on everything. Yes, budget time is a little stressful. A little crazier than usual.”
Later, Krasner plays phone tag with a rental tenant who’s complaining about the need to have air conditioner supports installed at her own cost. Krasner sent a letter to everyone in the building – owners and renters alike – informing them that she’s arranged a bulk rate for installations in the building to meet the new Department of Buildings facade requirements. Now she leaves a message explaining that the management doesn’t have a relationship with tenants but, rather, with owners. Still, she’ll speak to the apartment owner to see if he will allow the tenant to pay in installments.
Then, she suddenly comes across an agenda item and throws back her head and laughs. A building with an operating budget of several millions has an item for the board to consider replacing the lobby plants. The cost? One hundred dollars. It takes all sorts, she remarks. And every waking hour.Meanwhile, Back at Grogan
Mike Brandt is a heavyset man with a thatch of white hair who talks with the speed of a bullet train. He wears the white shirts and formal ties of old-school conservative businessmen but, when he’s out in the field, moves with the intensity and grace of a boxer.
He seems to be constantly in action. One of Brandt’s supers has been dealing with a mouse problem in a sublet apartment but without keeping the apartment owner in the loop. Brandt is in the process of defusing the aggravation. “I hear you, I hear you, right, right, right,” he says to the aggrieved owner through his cell phone. With the super, he’s more blunt: “I don’t care that there’s mice. We’ll deal with that. We’ll deal with the holes. But now it makes us both look like idiots!”
The super doesn’t get it yet. “But, I spoke with the [subletting] tenant.”
“Yeah, but how do you think it looks in the owner’s eyes that she had to hear about the problem from her tenant and didn’t hear it from you?”
“Oh!” Point taken.
Brandt is proud of his role in saving this building money. When he took over the management a couple of years before, he noticed that the building wasn’t billing water and sewer charges to its commercial unit. It took months of negotiations but he says he got the co-op thousands of dollars in reimbursements.
By ten o’clock in the morning, Brandt is meeting on site with one of his board treasurers, Bob Miller, to inspect a roof that is going to need a lot of work – and a lot of financing. Raising the flip tax might be in the cards. Brandt is waiting for votes to come in from the shareholders and Miller needs to get a feel for the problem. Brandt has brought along Alex Asgar, a contractor who’s working on another of Brandt’s projects, to discuss the options with Miller. Spongy bricks on one of the roof structures are just one more issue. The super wants Brandt to look at an electrical problem in the basement. The vacuum pump in the heating system is shorting out and the building will either have to bring in additional power or rewire the breaker box. Brandt asks Andre Electrics to see whether new wiring can be run through a “chase” in a shareholder’s first-floor apartment.
Half an hour later, Brandt is out inspecting another building’s roof with Asgar. The super has reported leaks and Brandt asks the contractor to pull up some of the roof panels to see what’s happening underneath. They may have located the problem: a pool of water is lying under the tiles. They can vacuum up the liquid and replace the tiles, but a longer-term solution may be needed. The wood beams need to be inspected. Brandt is under no delusions, however. It all comes down to finances and priorities. “You say, here’s the problem, here’s how to resolve it. It’s going to cost money. You can lead the board to water (no pun intended); but you can’t make them drink.”
Brandt is also acting as project manager on a huge renovation of the façade and other areas that has been under way for the past year. Currently, they’re replacing the concrete steps in front of the main entrance because of bad leaks. The new steps will be covered with granite. Brandt is arguing with the contractor about the final concrete pour. Asgar says that one pour gets a better result, but Brandt is concerned about access to the building during the initial eight-hour drying time. The service entrance is too steep to be a substitute.
“You’re killing me,” he tells Asgar and convinces him to use two pours so that residents have access on one side or the other.
“Okay. I can leave an access bridge of 26 inches, maximum.”
Brandt’s still not satisfied. “Not going to happen. I need enough space for the strollers...”
His cell phone interrupts – an insurance company wants to set up a walk-through of the apartments damaged in a weekend fire at another property.
Not a Rose Garden
Later, back in the office, a commercial tenant is calling to complain. He wants Brandt to send a notice to the residents telling them not to throw cat litter and sanitary napkins down the toilet because his restaurant has had to clean out its waste lines three times in just two weeks. Brandt says, “Yep. Thanks a lot. I needed this.” But he reassures the caller: “Don’t worry. I’ll get to work on it.”
He puts the phone down, and it buzzes again the second it hits the cradle. A resident is complaining of cigarette butts being flipped out of someone’s window down onto her terrace. “Again?” Polite notices haven’t helped. Brandt needs to be creative. “I’m going to ask the board if I can get permission to put a camera back there so I can see who’s doing it. That’s the only way we’re going to catch them at this point. Yes, I hear you. Cigarette butts. Yep.”
This afternoon, Brandt will be drawing up a spreadsheet for another building outlining the options for funding a lobby redesign – option A, using reserves; option B, with an assessment; and options C and D, part reserves, part line-of-credit. He has to respond to a resident who needs help dealing with an upstairs neighbor who left her kitchen faucet running and forgot to remove the sink stopper. An insurance broker has to be called regarding replacement values for this year’s insurance policies; an engineer has to be nudged (“This is your conscience calling you”) to get cracking on plans for replacing a roof vent – the penthouse roof is vibrating as though there were elevated tracks running on the roof; and a building president has to be reminded to find time out of his busy day to supply two purchase-order numbers that the building super needs.
“I’m getting them for you this afternoon,” the president promises.
“Yes, and you’ll marry me in the morning.”
There is a big laugh – at both ends of the telephone. Brandt says to a visitor that he should get the numbers now, before the day is over. And so it goes. Until Brandt, like Krasner at Orsid, winds up his day, with a meeting, a crisis, or just another phone call.
No one says management is easy. Managers make mistakes; some are inept, others incompetent. And both Brandt and Krasner acknowledge that to be any good at the juggling act known as portfolio management you have to be able to think quickly and use your experience. In addition, says Brandt: “You’ve got to be a person who’s tolerant of people’s concerns. And you can’t take things personally, because if you do – the biggest problems in this field are alcoholism and divorce.” But he also notes that a good manager is only made better by an involved board: “Everybody has their own way of managing. I’m low-key, I listen, and I try to develop what the board wants over time. Nobody wants to be pushed. But I like a board that is active, challenging – that questions everything. You don’t want a managing agent who’s running the board; you want the board being the ruler of the roost.”
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