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Property Prognosis

If boards keep their buildings running, it is the professionals who keep them humming. From those who repair the bricks and mortar to more white-collar types who advise on the legal, financial, and operational functions of the properties, these professionals are essential to a well-run building. Essential because of their experience – experience that has also made them good prognosticators. Here are their predictions.

 

 

Building services

 

 

American Pipe & Tank

102 years in business

Richard Silver, President

The cost and availability of water will be on par with those of oil. The accessibility of our greatest natural resource will decline; the cost will rise. In fact, some experts predict the next world conflict will be over water. Conservation will become paramount. From house systems such as roof tanks to the faucets in each apartment, all buildings will be required to be water-efficient. Every drop of water used will be measured. Fines for waste and overuse will be steep, and the market value of co-ops and condos will be directly related to the building’s water efficiency.

 

SDi Laundry Solutions

60 years in business

Ron Garfunkel, President & CEO

The biggest change in the laundry room business will be in technology. In addition to using Smart Cards, customers will be able to use credit or debit cards to start the machines. Using computers or mobile devices, they will be able to check service, installation, and collection status, as well as card balance. Commissions to buildings will be paid electronically, and machines will report their own service problems and generate automatic service calls, meaning less down time. Machines will operate more and more efficiently, using less soap, water, and fuel, which will save money for co-op and condo owners.

 

Laundrylux

57 years in business

Neal Milch, CEO

The laundry industry must respond to and support LEED and other environmental initiatives to reduce the resource footprint of buildings. Route operators will equip buildings with laundromat-quality equipment that reduces water and energy consumption with the highest-quality results. Appliance-type washers will decline over the next five years as they are replaced by true semiprofessional machines.

 

Varsity Plumbing & Heating

50 years in business

Robert J. Bellini, President

We expect to see greater awareness of resident safety and health issues. As New York City and New York State pass regulations protecting our drinking water and requiring stricter fire safety standards, we foresee a big demand for compliance installations. The Backflow Prevention initiative requires virtually all co-op and condo buildings to install these devices and file for Department of Environmental Protection approval to help protect the city’s drinking water. Concern for water safety is also leading more buildings to install pipe-descaling and filtration systems. Unit-owners are installing under-the-sink filtration systems as well. The end result will be safer environments for co-op and condo residents.

 

American Security Systems

32 years in business

Lawrence T. Dolin, Founder & CEO

Interactive electronic security surveillance will accelerate over the next five to ten years to become the preferred system protocol for providing safety and security for residents in condos and co-ops. Ninety-five percent of apartment-building crime begins at the front entrance. Current security systems provide CCTV surveillance monitoring that allows management to review video-clip history after an incident occurs. Now it’s possible to use video analytics linked to a central station’s operator to view and interact in real time to prevent lobby loitering and monitor doors ajar and forced front-door entry.

 

Bargold Storage Systems

17 years in business

Josh Goldman, President

We expect to see more demand for on-premises storage units. Many buildings are converting to steam heat, which requires no boiler, and natural gas power, eliminating oil tanks and creating space for storage. We also expect to install more bicycle storage racks and areas. Cutting-edge mobile technology will allow vendors to collect up-to-the-minute data about the storage units, so that they can identify and repair any problems immediately, as well as notify those on waiting lists as soon as a unit becomes available. All billing and payments will be done electronically within the first few days of every month.

 

AtHomeNet

14 years in business

Susan Sanders, CEO

The condo/co-op market will continue to expand its use of online solutions to automate office and residential tasks and communication. These organizations will be able to communicate with residents, handle security responsibilities, and so much more with the convenience of feature-rich websites and add-on services. While services are already highly customizable, options are expanding exponentially and new services become available every day. The capabilities of technology are also expanding exponentially, providing community building managers the ability to communicate and manage their responsibilities wherever they are in just a few clicks.

 

Custom Storage Systems

8 years in business

Jack Reich, President

Onsite self-storage over the past eight years has changed so much, and its future is very promising. We are seeing this transition now. Over the next 10 years, onsite self-storage will no longer be an optional amenity but a standard feature a tenant will look for in buildings. The increased options the storage industry continues to create make it so easy for any building to add some type of storage for its residents.

 

 

Energy & Environment

 

 

Calray Gas Heat Corp.

83 years in business

Harris Clark, Vice President

Over the next decade, we see a greater influence from technological advances in the plumbing and heating industry. These innovations will continue to bring a greater efficiency to help ease the water and energy burden on the New York real estate market. The city’s initiatives – such as PlaNYC and benchmark compliance – help give building owners and managers much-needed support in increasing building efficiency and, in turn, reducing energy-related expenses.

 

Rentar Environmental Solutions

51 years in business

Ira Ratner, Vice President

As heating oil prices increase and our environment becomes even more fragile, buildings will be looking for new ways to control their costs and reduce pollutants, and our scientific community as a whole will be there to help with new and improved technologies.

 

US Energy Group

34 years in business

Jerry Pindus, CEO

Monitoring and control of building energy usage will become exact. Energy usage will be evaluated on an ongoing basis, instead of on an annual schedule. We will see more valves and servomotors added to HVAC systems in order to extract every possible bit of wasted energy from the systems. Solar, hydro, geothermal, and cogeneration systems will be used more frequently. Submetering of heat, water, and electric will become more widespread. Residents will become more accountable for their energy and water usage and will work with owners and managers as partners to achieve our mutual sustainability goals.

 

Quadlogic Controls

30 years in business

Eric Jacobson, Director of Corporate Communications

The increasing cost of energy will continue to drive the adoption of digital submetering and building-management systems, and managers and consumers will have access to graphical displays of energy use. Load curtailment (demand shedding) will be more broadly implemented by the New York Independent System Operator, and condos and co-ops will profit from participation in these programs. Utilities will catch up with deployment of remotely readable smart meters, and that will help to improve grid reliability.

 

Aegis Energy Services

27 years in business

Lee Vardakas, General Manager

Co-ops and condos in metropolitan New York are forward-thinking about energy expenses and environmental issues. Increasingly, these types of buildings are installing Combined Heat and Power (CHP) systems in order to reduce energy costs, reduce reliance on other utilities, and reduce their carbon footprint. CHP saves on energy costs and emissions because one fuel source, natural gas, produces two sources of energy: heat and electricity. Recently, thousands of buildings were required to switch from No. 6 heating oil to either No. 2 or natural gas. Many are opting to go with natural gas while also installing energy-saving CHP systems.

 

JLC Environmental Consultants

23 years in business

Jennifer Carey, Founder & President

The New York market will remain strong for the foreseeable future. The residential buildings built at the peak of the boom that have been converted to rental units may eventually revert to what they were originally intended for. With tighter credit requirements a big issue, financially sound buildings should continue to attract buyers and thrive in the post-bubble world.

 

American Utility Consultants

22 years in business

Michael Lockhart, President

The rollout of smart/advanced utility meters will continue over the next decade and reach widespread use with all classes of water, steam, and electric customers. Near real-time measurement will allow customers to better manage their use and take advantage of alternative rate structures. Although in theory these newer meters should reduce the number of estimated bills customers receive since they can be remotely read, the transition to them has caused greater billing problems for many because of faulty installations. Furthermore, these additional data points have enabled us to uncover metering defects and detect billing errors that were previously less exposed.

 

RND Environmental Services

15 years in business

Paul Enea, Vice President of Client Services

The coming years will produce challenges for the co-op/condo community because of numerous changes taking effect regarding oil tank regulations. New York City has banned the use of No. 6 oil and high-sulfur No. 4 oil. This will force 10,000 buildings in the city to undertake boiler conversions to natural gas or biofuel blends of No. 2 oil and low-sulfur No. 4 oil. These regulations will bring previously unregulated storage tanks (No. 6 oil tanks were exempted) into a new world of compliance, requiring substantial upgrading, constant reporting to the New York State Department of Environmental Conservation, and hefty fines/penalties for noncompliance.

 

EnTech Digital Controls

15 years in business

Laura Bendayan, Marketing Coordinator

In today’s eco-conscious society, EnTech envisions the government enacting additional regulations to reduce the amount of wasteful energy consumption – as seen with the phase-out of No. 6 oil and the Local Law 84-mandated energy benchmarking. With these, as well as other newly enacted energy-efficiency building standards, co-op and condo management philosophies will have to be adjusted to keep up with these energy-cutting measures. Since the majority of government policies are accompanied by deadlines, board members may be put under constant pressure to sustain their buildings’ energy efficiency and curb their energy consumption.

 

New York Water Management

14 years in business

Mark J. Schwartz, President

Water bills as a whole will completely change. As we have seen over the last six or so years, rates will continue to rise, though hopefully at a slower pace. The technology that the Department of Environmental Protection and private consultancy companies are rolling out will better enable managers and boards to properly track water usage instantly. This will allow for immediate anomaly identification, alerting the parties to leaks and waste, thereby keeping water bills to a minimum.

 

 

Finance

 

 

Wells Fargo Home Mortgage

160 years in business

Jackson Robert, Home Mortgage Consultant

There has been a great deal of excitement surrounding the housing outlook for 2012. Last year ended with sales appearing to improve, inventories apparently declining, and builder optimism posting four increases in a row. Wells Fargo sees good news on the horizon for condominium developers and their ultimate customer – the homebuyer. Government agencies have approved processes to help finance condominiums and make the marketplace more viable. Discussing options, changes, or phasing possibilities with a lending professional can make all the difference in the success of a condominium project.

 

National Cooperative Bank

34 years in business

Edward Howe lll, Managing Director

During the next decade, financing will remain a top priority for cooperatives and condominiums throughout the region. I predict that low interest rates will remain in place for underlying mortgages and share loans, which will boost the housing market and give New Yorkers the opportunity to improve the financial and physical health of their properties. While greater documentation and slightly longer loan processes may be the norm to ensure that all government regulations are met, funds will still be readily available to meet the varying financial needs of these buildings, such as lowering debt, reducing operative costs, and instituting green technologies.

 

M-Core Credit Corporation

20 years in business

Michael R. Weisberg, Principal

Our involvement with the co-op/condo market has been the financing of energy savings measures/projects. Until now, there was usually a green catalyst person on the board or as a vocal resident pushing the building to address saving energy. Now and into the future, we are seeing boards, residents, and management companies addressing energy use as a standard issue rather than as an optional one.

 

Montgomery, McCracken, Kurzman, Karelsen

100+ years in business

Phyllis Weisberg, Partner

With the proliferation of personal electronic devices and social media, the amount of legal information on the internet will grow. Co-op and condo boards, pressured by their constituents to reduce spending, may look to the internet as a quick, inexpensive way to get legal answers. However, boards will need to be aware that the information they find may be unreliable, inaccurate, or outdated, and that legal advice on the internet – without adequate probing of the facts or review of relevant documents – may exacerbate legal problems.

 

 

 

Legal

 

 

Dewey & LeBoeuf

100+ years in business

Stuart Saft, Partner

I am anticipating another wave of conversions as landlords find that they cannot make an adequate return on investment with all the new city requirements and the limitations on rent-regulated apartments. This will provide an opportunity for the industry to assert its voting strength to make city and state officials more aware of co-op/condo issues and the need for a coordinated way to address them. Obviously, not having adequate statutes provides the courts with too much discretion and places a large financial burden on co-ops and condos attempting to deal with numerous issues while avoiding expensive litigation. However, unless city and state officials recognize the special problems of cooperatives and condominiums, more people will opt to leave the city for a more hospitable residential climate.

 

Stark & Stark

80 years in business

David J. Byrne, Chairperson, Cooperative & Condo Law Group

I see the way co-op and condo attorneys service and represent their clients changing in many ways. In particular, I see the way in which those attorneys deliver services changing. I expect co-op and condo boards – and their managing agents – to demand services and products in a much more technologically advanced way. I expect video conferencing to replace, in some respects, direct evening meetings with counsel and/or meetings attended by counsel. I expect boards and their agents to desire access to legal reports and collection reports electronically, and to be able to exchange and secure information via web portals or other technology, and perhaps at no charge. I expect other similar types of changes and client demands for same, over the next decade and beyond.

 

Bleakley Platt & Schmidt

75 years in business

Jim Glatthaar, Partner

The challenge for law firms is to provide high-quality legal services at a reasonable cost, thus delivering value to their clients. Technology (e.g., e-mail, Skype) makes it possible to provide legal services to clients hundreds of miles away. Technological improvements will accelerate this trend and will greatly expand co-op/condo board choices for the provision of legal services. This will allow city law firms access to suburban and rural co-ops/condos and will allow suburban and rural law firms access to city co-ops/condos. The result will be cost savings to co-op/condo clients.

 

Barton LLP

53 years in business

Stephen M. Lasser, Real Estate Partner

The internet has enabled boards to access property information from various county clerks’ offices as well as litigation documents filed with the majority of courts. This easy access to information will only increase over time, thus increasing the ability of boards to monitor the progress of legal services provided by their attorneys. This will force attorneys to be more accountable to their clients and improve the level of legal services provided. In addition, the law that governs condominiums is in need of a major overhaul because of its lack of effective remedies for collecting common charges and its lack of corporate governance provisions. With luck, the legislature will eventually address these deficiencies.

 

Braverman & Associates

46 years in business

Robert Braverman, Managing Partner

Over the past 25 or so years, just about all new residential construction projects and conversions of existing buildings have taken on the condominium form of ownership. I would not be surprised, however, to see a resurgence of co-ops in the coming years. Since the economic downturn, many young condominiums have struggled as a result of having large percentages of absentee owners and over-leveraged speculators who have simply walked away from underwater properties, leaving the remaining unit-owners to absorb the unpaid portion of the buildings’ operating expenses. All of a sudden, those “big, bad co-op boards” that prohibit subletting and scrutinize financials down to the last penny don’t look so bad. Safe and secure may be the new watchword for purchasers – and, therefore, for developers as well.

 

Rosen Livingston & Cholst

40 years in business

Peter Livingston, Partner

Future legislation will permit condominiums to acquire rights similar to cooperatives’ to collect unpaid common charges. Banks today are reluctant to foreclose their liens if the amount of their mortgage exceeds the value of the apartment. A condominium is therefore deprived of revenue when a bank fails to act. A condominium will be paid its monthly common charges by a bank that fails to act within nine months to foreclose its lien.

 

Somer & Heller

38 years in business

Stanley J. Somer, Partner

Over the next decade, we anticipate the New York State Legislature passing statutes that would include the right of homeowners’ associations along with cooperative corporations and condominiums to collect rents from tenants of nonresidents. We further anticipate legislation amending the court’s decision that condominium liens, even though they are subordinate to the first mortgage liens, are not wiped out by the bank’s foreclosure and that the condominium charges must be paid upon the sale of the unit either at the steps or, if the bank is the successful purchaser, upon the resale.

 

Law Offices of Arthur I. Weinstein

34 years in business

Arthur I. Weinstein, Principal

Unfortunately, the greatest change that I see will be attempts by legislatures and courts to over-regulate co-ops and condos. In the past, politicians dealt with the economic conflict between landlords and tenants with over-regulation of rents and building maintenance standards and almost destroyed the rental market. In the future, established co-ops and condos will exceed new conversions and unsold units will decrease by attrition, resulting in a decreased regulatory role of the attorney general and leaving a power vacuum that legislatures and courts may rush to fill. Politicians fail to recognize that there is no inherent economic conflict between co-ops and unit-owners. Politicians deal with grievances on a “need to respond” basis rather than on solid policy grounds. Examples proliferate: broker-driven proposals to regulate the admission process; discriminatory real estate tax treatments; legislation establishing pet policies; subtenant rights; shifts of costs of valid public policy objectives such as energy conservation and handicap access onto co-ops; failure by the courts to enforce proprietary lease provisions accurately; and so on. Our communities must remain diligent.

 

Gallet Dreyer & Berkey

34 years in business

Marc Luxemburg, Partner

The coming decade will see continuing regulation of environmental issues, energy efficiency, and lowering the carbon footprint. As the population ages, there will be a demand for services to assist elderly residents, which will include increased handicap access and compliance with disability laws. To comply with new requirements, the projects will require substantial capital. There will be continued pressure on budgets. While co-ops and condos will continue to be very desirable places to live, boards will have to work closely with their professional advisers to ensure that all requirements are anticipated, prepared for, and complied with.

 

Ganfer & Shore

33 years in business

Matthew J. Leeds, Partner

It would not be surprising if, over the next decade, many cooperatives and condominiums ban smoking entirely, even within apartments. There are considerations of the privacy of owners and existing residents who smoke. At times, management might explore alternate amelioration by the use of filters and other devices. It is uncertain whether a prohibition would affect values, perhaps by limiting the number of potential purchasers, or at the same time by making the building more attractive to some. As with many difficult lifestyle decisions, management will often want to consider involvement of owners in the development of any smoking policy. In fact, strong action might often require a super-majority vote of owners to amend the bylaws or the proprietary lease.

 

Brill & Meisel

33 years in business

Elliott Meisel, Founding Partner

Co-ops will continue to tweak financing, ownership, and alteration practices. Condos will increasingly use available leverage to try to regulate sales, rentals, alterations, and financing and require capital contributions to improve their quality of life and financial stability. The more radical changes needed won’t occur. Outdated proprietary leases need facelifts, but the Council of New York Cooperatives & Condominiums form hasn’t gone far enough or caught on, and it’s difficult to get two-thirds of a co-op’s shareholders to agree to anything. Condos will continue to suffer from the mortgage lien priority and ineffective monetary and non-monetary default remedies, and real estate taxes will continue to plague both.

 

Himmelfarb & Sher

32 years in business

Ronald A. Sher, Norman D. Himmelfarb, Partners

We anticipate significant changes in the next decade affecting the cooperative/condominium market, involving the following: (1) fuel conservation and/or dual-fuel/gas conversion projects; (2) stricter closing requirements promulgated by lenders for approval of cooperative/condominium projects relative to the status of reserve funds, operating budgets, arrears, and owner-occupied/investor status; (3) condominium lien priority and/or super-lien protection affecting lenders’ willingness to provide financing; (4) reassessment of real estate taxes in New York City and its suburbs, resulting in substantial increases in maintenance charges and/or attempts to reassess based upon sales price instead of rental value; and (5) implementation of a mortgage recording tax for cooperatives. Therefore, all boards must be prepared for the future.

 

Levine & Montana

30+ years in business

Lewis Montana, Principal Attorney

The law of residential community associations is growing more complex all the time. Local, state, and federal regulations and related governing authority all affect the way that boards, unit-owners, shareholders, and managing agents interact. But conflicts always seem to arise. We expect that, to cope with this, the court system will develop more specialized condominium and cooperative parts throughout the state, especially in heavily populated areas. Judges with expertise will be assigned to handle an increasing caseload. Litigants should expect more consistent judicial decisions.

 

Schechter & Brucker

25 years in business

Andrew P. Brucker, Partner

The right of first refusal in condos has been thought to be better than the consent of co-ops, since owners have more freedom. But the problems of condos have been exposed. Your neighbor sells to an investor. The investor rents to a registered sex offender. There is nothing you can do. Sure, there is the right of first refusal, but boards rarely exercise that option for various reasons. I believe that we will be seeing changes in condos in the next decade, with condos adopting some consent and even flip tax provisions. Condos becoming more like co-ops – what a concept!

 

Marcus Rosenberg & Diamond

23 years in business

David Rosenberg, Partner

I predict that our legislatures will attempt to make further deleterious impositions on co-ops, including real estate tax increases, making this expense a greater portion of the annual budget, and imposing limits on board discretion in such areas as approving purchases and subleases. The co-op community will have to develop a more effective lobby to resist such efforts.

 

Belkin Burden Wenig & Goldman

22 years in business

Aaron Shmulewitz, Partner

Board members and managing agents will continue to become much more knowledgeable about issues, positions, and rights, and thus more demanding of their counsel. Counsel will be expected to be increasingly responsive, in terms of both time and substance, coming closer to a 24/7 environment. These demands and expectations will be strengthened by changes in technology that will enhance the ability, and thus the expectation, for such responsiveness.

 

Novitt, Sahr & Snow

22 years in business

Seth M. Sahr, Partner

In light of the current economic downturn, in combination with ever more stringent foreclosure requirements, condominiums (particularly smaller condominiums) are increasingly facing cash-flow problems as a result of owner defaults. As common-charge liens are junior to the liens of first mortgages and property values are falling (often below the mortgage balance), condos are finding that they may have to go years without cash flow from these units only to end up writing off those charges as losses. I believe condominium boards will increasingly be proactive in creating strategies via alternate collection opportunities and amendments to their bylaws (i.e., limitations on first mortgage financing) to leave themselves less exposed to market fluctuations.

 

Smith, Buss & Jacobs

21 years in business

Kenneth Jacobs, Partner

New York State has gaping holes in the laws governing community association operations. The state will pass some form of statute setting standards for co-op/condo/HOA governance. First, though, the state will create the Office of the Ombudsman as a forum for shareholders and unit-owners to address complaints about association operations. These new laws will increase confidence in community associations for individual owners. New-construction condos are also passing from the conversion phase to the mature operating phase. Condo boards will have to deal with ongoing operating issues, such as insurance coverage, reserves, and financing, that mature co-ops have already considered. Co-op/condo attorneys will need more professional expertise in operational issues to deal with problems in all these areas.

 

Schneider Mitola

18 years in Practice

Marc H. Schneider, Managing Partner

Technology will have the biggest impact on the market. The ability to obtain and disseminate information will level the playing field, from determining the purchase price of a unit to gathering information about a lawsuit involving a community association or an individual and getting information about vendors. Additionally, boards will communicate with their residents faster and more efficiently through means such as e-mail and telephone contact via “call-me-all” type technology. I even see a time when voting for board elections or amendments will be regularly done over secure sites on the internet. Speed, ease, and efficiency of obtaining and disseminating information will only continue to improve over the next decade.

 

Hueston McNulty

16 years in business

Samuel J. McNulty, Partner

Wider use of social media will increase the ability of board members and owners to interact and to be tuned in to issues. Governing documents and enabling statutes will be amended to allow for electronic voting in elections and for participation in board and member meetings. Video conferencing will allow more efficiency and cost savings. I look forward to this future.

 

Tarter Krinsky & Drogin

10 years in business

Steven Troup, Partner

We believe New York City real estate will be the subject of more and more regulation, especially in the environmental area.

 

Miller & Miller

7 years in business

Joel E. Miller, Partner

In view of the December 20, 2007, changes made in Section 216 of the Internal Revenue Code, so that corporations with unlimited outside income can qualify as “cooperative housing corporations,” it seems likely that the IRS will again seek to apply Code Section 277 to them, rather than accepting that they “operate on a cooperative basis,” so as to make the more liberal rules under Subchapter T applicable.

 

Romer Debbas

2 years in business

Pierre E. Debbas, Founding Partner

The concept of co-op board approval will change drastically over the next decade. Co-op boards have the ability to reject a buyer without providing a reason, and boards frequently rely on the Business Judgment Rule and lack of disclosure requirements. The only recourse buyers have is if they can prove the board discriminated against them based on religion, sexual orientation, race, or age. The state will pass a law that provides a framework on which boards must base their decisions and require that the reasons for rejection are provided, to hedge against the risk of arbitrary and inconsistent decisions being made for future purchasers.

 

 

 

 

Professionals

 

 

Greater New York Mutual Insurance Company

98 years in business

Warren Heck, Chairman & CEO

An important goal of co-ops and condos is to obtain broad, competitive, and affordable insurance coverage from financially strong and stable insurance companies. In the next decade, the chief obstacles for New York City co-ops and condos in achieving such stability emanate from the exposure in the Northeast to natural disasters, terrorism, and an out-of-control tort system. In just the past two years, we experienced serious winter storms; a tornado that passed through Staten Island, Brooklyn, and Queens; and most recently, Hurricane Irene, which caused havoc in all the boroughs of New York. Also, our litigious culture has been raising tort costs with each passing year. All this suggests that co-op and condo associations should place their business in insurance companies that are the best in their class to deal with these issues.

 

Flushing Bank

80 years in business

Diane Papsidero, Vice President

Sharing of information has been the key to cooperative housing success stories. Board members need information to make good decisions, and shared experiences provide these learning tools. The varied issues and problems that occur in cooperative housing are continually changing with the times. Informational technology, with a particular and personal interpretation, will provide the tools for an efficient cooperative board. Habitat was a forerunner in providing this service and will be a leader in the future.

 

Dunn, McNeil, Ramsay, Consulting Engineers

56 years in business

Michael A. Newman, Partner

There will be a wider use of consultative services during the building planning process and directly thereafter; this will help ensure that all conditions are addressed. Employment of effective sound-attenuation materials should be incorporated in the specifications, thereby eliminating refitting. They should also contain future costs and/or litigation that most boards encounter when co-op owners face continuous disturbance. Attention to the placement, separation, and proper insulation of mechanical equipment within the building envelope will satisfy shareholders’ need for “peaceful enjoyment of their premises.”

 

Superstructures Engineers & Architects

31 years in business

David May, Principal

As professionals specializing in exterior restoration since the inception of Local Law 10 (over 30 years ago), we’ve seen the bar raised ever higher. Regulations governing site safety, asbestos abatement, and energy consumption will increasingly have an impact on cost and duration of façade repairs. Bricks and mortar will still be placed as they were thousands of years ago, but advances in non-destructive testing allow us to assess problems more precisely and less intrusively than ever before. Advances in materials science have yielded “space age” coatings, adhesives, and admixtures. Cutting-edge computer hardware and software permit more accurate and cost-effective project design and tracking.

 

Prisand, Mellina, Unterlack & Co.

30+ years in business

Jayson Prisand, Partner

Over the next decade, our firm foresees continued pressure on buildings to be able to balance their annual budgets in a rising-cost environment without having to implement significant increases in maintenance or common charges. There will be increased disclosure requirements for long-term planning and a greater level of scrutiny over the actions taken by board members. Increased regulation and disclosure requirements within the accounting sector will also have a significant impact on financial reporting because of the replacement of U.S. Generally Accepted Accounting Principles with international accounting standards.

 

Sygrove Associates Design Group

30 years in business

Marilyn Sygrove, President & Owner

In the next decade and beyond, the big change will be that existing buildings, both prewar and postwar, will be rated (just as restaurants are rated today). This will include LEED certification, which is the trend for new construction. I believe older properties will follow suit. Designers will encourage buildings to comply with as many of the requirements as possible, to get the maximum amount of LEED points. This will affect the quality of life, which in turn will have a direct effect on the building’s rating. Marketing and sales of apartments in higher-rated buildings will yield higher sales revenue. From a designer’s standpoint, we will be educating our clients about the LEED points that will be available from lighting, carpeting, flooring, furniture, and all the materials we are specifying in the renovations of lobbies, hallways, elevator cabs, gyms, playrooms, and roof gardens. I predict that this will become the norm in renovating buildings.

 

INDEVA

30 years in business

Aaron Etra, President & CEO

I see two significant new directions to be pursued. The first is to develop more flexible ownership and use options for spaces, creating a full selection of mixed residential/work occupancies and extensive variations on ownership and rental tenancies. The second is to make conservation and sustainability the rule and norm in construction and interiors. Talent and technology will facilitate these efforts, and ever-scarcer resources will make them more compelling and acceptable.

 

Wilkin & Guttenplan

29 years in business

Annette Murray, Shareholder

During the past few years, we’ve come to understand that the value of real estate won’t always go up and it may not always be profitable to own. In addition, we’ve experienced a severe economic downturn in recent years. For co-op/condo boards, the focus is now on saving money, eliminating large maintenance and assessment increases, and planning for needed replacements and improvements over a longer time period. As a result, we believe that in the next decade, we will see a tendency toward the creation and adoption of multiyear capital plans to deal with large capital expenditures in the future.

 

Kleiman & Weinshank

27 years in business

Abe Kleiman, Partner

Over the past several years, the accounting profession has been inundated with new accounting and auditing standards. While many pronouncements are intended to improve the reporting and audits of various entities, they may have an unintended effect on private and closely held companies. Some standards have no relevance to private and closely held companies, and may confuse the users of financial statements of co-ops or condos. The burden of keeping up with these standards and their applicability to the co-op and condo industry will continue to add time to audit engagements and expand the auditor’s responsibility, thereby increasing future audit fees.

 

Czarnowski & Beer

25+ years in business

Stephen Beer, Partner

Taxing authorities will need to cover huge deficits, so they will be substantially increasing real estate taxes and also pursuing sales tax audits and attempting to claim unclaimed funds. Lenders will require much more comprehensive documentation, also in a more standardized Fannie Mae format, before loan applications will even be reviewed. Cash-strapped unit-owners will no longer be willing to accept higher monthly increases or any assessments, thus putting enormous pressure on boards to maximize their long-range planning, to focus on saving costs, to find alternative sources of revenue, and to maximize income tax planning.

 

Merritt Engineering Consultants

25 years in business

Jennifer M. Merritt, Director of Marketing & Business Development

As we have seen over the last few years, green building has become less of a cocktail-party topic and more of a reality for co-ops and condos, specifically in regard to building-envelope improvements. One example of this is New York City’s requirement to install white reflective roofs on all buildings going forward. Co-ops and condos will see more and more requirements of this type, such as recycling old materials from exterior restoration projects, replacing those materials with recycled and energy-efficient ones, and documentation that environmental upgrades have been made. Point systems will become second nature to co-op and condo boards, being used as a means of monitoring and rewarding sustainable improvements.

 

Mackoul & Associates

25 years in business

Edward J. Mackoul, President

More and more people will use the internet for their insurance needs. Other entities such as payroll companies will expand into the insurance marketplace. Many generalized insurance brokers will go out of business, as people will look to the internet and insurance brokers who specialize in a certain niche to meet their needs. Insurance programs tailored toward co-ops and condos will become more popular, as buildings band together in an attempt to reduce their insurance premiums.

 

Winter & Co.

23 years in business

Gregg Winter, President

Our industry is commercial real estate financing, of which financing for co-op corporations is an important part. Within the next decade Fannie Mae and Freddie Mac may well be gone. If anything, this is likely to result in more flexible and freely prepayable underlying mortgages being available for New York’s co-op corporations. Little by little, the securitized (Fannie/Freddie and CMBS) lenders are losing their pricing edge, and local banks are offering cooperatives the best available (and most freely prepayable) underlying mortgages and credit lines.

 

Kleinfeld Technical Services

13 years in business

Jack Kleinfeld, President

My industry, infrared imaging, is being affected by the increasing availability of low-cost thermal imagers. As a result, more people are getting into providing thermal imaging services. This is going to affect the co-op, condo, and rental markets, since there will be more providers of thermal imaging services, but not necessarily better ones. Also, owners and management companies are going to be more likely to have their own thermal imaging equipment.

 

Lauren & Chase Design Group

2 years in business

Susan D. Lauren, Principal

With more residential high-rises being constructed every day, the prospective co-op/condo buyer has more options. At the same time, the general public is becoming more educated about interior design. This means the marketplace is more competitive, and the common areas of co-ops and condos need to impress a more sophisticated consumer. Brokers have told me sales are often made or lost on the first impression projected from a building’s lobby and hallways – even before a prospective buyer sees the apartment. Therefore, to stay competitive, buildings must keep their interiors attractive, notable, and in demand.

 

 

 

 

Property managers

 

 

Lawrence Properties

87 years in business

Anton C. Cirulli, Managing Director

The more things change, the more they stay the same. Every industry is faced with this truth. Ours is no exception. Technology will change everything we do. It races through our lives, forcing us to keep up, learn more. Be better. It will always be a managing agent’s responsibility to educate and use this new information. But an effort must be made, in this swirl of newness, not to forget the importance of maintaining people skills. To the resident with a problem, a typed message may not replace the sensitivity of handling the issue with a human touch.

 

Argo Residential

60+ years in business

Karen A. Berman, Vice President

More information will be available online to both buyers and sellers in co-ops and condos, making the real estate broker’s function more of a negotiating role rather than a role of bringing forth information they will already have.

 

Alexander Wolf & Co.

50 years in business

Eric J. Lash, Director of Management

Clearly energy use and consumption is a hot topic that is garnering more attention these days. With the advent of Local Laws 84 and 87, the industry is being compelled to become more green and efficient with respect to energy use. With this in mind, the residential housing market must plan and dedicate the resources to comply with new laws and standards to come. This will have an effect on all parties involved in the residential management market.

 

Midboro Management

49 years in business

Michael Wolfe, President

The industry will be focused on complying with the phasing out of No. 6 fuel oil, converting to gas or dual-fuel. If oil prices continue to rise and gas prices remain lower, this will represent a welcome reduction in fuel costs while reducing our carbon footprint. Con Edison and government regulations need to adjust to make this transition easier and more affordable. Cost reduction will always be a priority. Capital improvements will target energy-efficiency gains. Because of historically low rates, underlying mortgages are being refinanced if possible (most are for 10-year terms). If interest rates rise substantially, debt service costs will adversely affect operating budgets when these new loans mature.

 

Century

41 years in business

Mitchell Barry, CEO

Over the next 10 years, the management business will change, as it will become harder and harder for owners to recruit new managers into the industry. Owners of management companies need to invest money in technology to run their buildings better and to help unit-owners communicate with boards and management. The market for smaller management companies will become more difficult, as boards need to recognize managers as true professionals and compensate them properly for the work they perform. After all, the management company is the go-to person on all matters that affect building operations.

 

Fairfield Property Services

38 years in business

Alvin Wasserman, Director

The management industry will continue to be transformed by digital technology. Communication will be further enhanced by smartphones, interactive websites, video conferencing, etc. However, technology can never replace the value of personal service and attention from professional management staff. Professional licensing requirements for property managers, with standardized education and experience prerequisites, will elevate the status of the industry. The value of managers’ services will increase, and flat-fee-based services will evolve to hourly fees as with attorneys, accountants, and engineers. Managers will be better prepared to serve clients and will be fairly compensated for their expertise.

 

Mark Greenberg Real Estate

32 years in business

Steven Greenbaum, Director of Property Management

The biggest change in the property management industry during the next decade will be the continued move toward the use of the internet and e-mail as a source of information and a communication tool. Management companies allow residents to pay monthly charges electronically. Financial reports and general correspondence are delivered by e-mail. The future will include more progress using electronic medium, as the industry and society move toward a paperless society.

 

Garthchester Realty

31 years in business

John Bonito, Co-president

The biggest change will be the continued growth of digital communication. Shareholders will e-mail more and rely on the agents’ and buildings’ websites. These sites will be linked and provide interactive and downloadable files for everyone to obtain. The superintendent’s job will be less mechanical and more communication-oriented. Both superintendent and agent will have instant facilities information (boilers, elevator repairs, security systems, etc.) via the internet going directly to their phones and computers. Municipal/government requirements will continue to be a burden for management as well as co-ops and condos. Last but not least, oil will no longer be the primary fuel.

 

Stillman Property Management

30+ years in business

Jeffrey Stillman, Vice President

There will be increasing financial constraints on residents and communities because of the changed economy and an aging population. There will be an increasing need for communication to residents and use of social media. There will also be an increasing use of technology for improved efficiencies in operations; increasing governmental regulation; an increased number of disabilities in an aging population that will require more property accommodations and possibly increased governmental regulation; and an increasing need for management companies to rely on automating certain operations without losing sight of personal contact and responsive customer service. Properties and management will be asking how they can do more with less. Sustainability will become more and more important because of increasing costs of fossil fuels and a concern for environmental quality of life.

 

All Area Realty Services

29 years in business

T.J. Magoulas, CEO

The availability of the internet will have a major impact on the property management business. All activities such as reporting, financials, communication, and responses will see its effect on the way management is handled. Green building projects, alternate sources of energy, eco-friendly environments, and electronic file keeping will enhance the quality of services provided and reduce overall costs.

 

AKAM Associates

29 years in business

Michael Berenson, President

The residential management industry is becoming increasingly professionalized through education and in-service training. Within the decade, we expect to see it as a primary college-level major able to attract students with the promise of a highly respected, well-paid lifetime career. Another area of focus over the next 10 years will be the diminished useful life of the structural and mechanical elements of buildings being constructed today. This will affect operating and capital budgeting for these buildings. Additionally, within 10 years, advances in technology will revolutionize information delivery and the way meetings are conducted, and our industry will be completely paperless.

 

Carlton Management

27 years in business

Steven W. Birbach, Chairman

The two changes that stand out most to me: (1) the way in which management companies communicate with their boards and residents and (2) the way in which buildings can take advantage of green technology. Today, 95 percent of communication to board members, shareholders, and potential subtenants and purchasers is via e-mail. Over the next 10 years, communication will continue to improve, using social media and new applications for personal handheld devices. In the event a problem arises, software will allow mangers to view properties in seconds on their devices, and this should improve overall communication within the co-op/condo market. Over the next decade, energy conservation will continue to have an impact on our day-to-day life, and new items will be available for co-op/condo residents to take advantage of. This will help conserve energy and over time will help make the world a better place to live.

 

New Bedford Management

26 years in business

Peter von Simson, CEO

The largest change on the horizon is the state licensing of property managers and the firms that employ them. Let’s hope this overdue requirement will clean out the bad characters who have consistently taken advantage of the low barrier to entry to inflict real harm on the properties we serve.

 

Cooper Square Realty

25 years in business

David Kuperberg, Founder & CEO

We will see the emergence of a new breed of property manager that has the advanced education and sophistication needed to run condos and co-ops. These multimillion-dollar corporations will transition from being run as mom-and-pop businesses to companies that utilize sophisticated data analysis, financial modeling, and other new technologies in order to effectively operate and maintain their value. Energy costs will continue to be one of the largest expenses for properties. As such, boards will place increasing emphasis on achieving efficiency measures and cost savings derived from extensive analysis and properly designed efficiency programs.

 

Tudor Realty Services

21 years in business

David Goodman, Senior Management Executive

Within the next decade, we will continue to see the imposition of new government regulations on the operations of buildings. This work will add expense. The physical requirements of properly maintaining the aging building stock will likewise generate financial burdens for the shareholders and unit-owners. New methods of financing (for both units and projects) will be created to meet this need.

 

Pride Property Management

20 years in business

Alex K. Kuffel, President

Cooperatives and condominiums have operated in a predominantly favorable lending environment for at least the last 20 years. Money has been easily accessible and, while budgets have been important, failure to include certain line items has not had adverse effects. New lending guidelines mandate that condominiums provide a demonstrative implementation of those guidelines. Additionally, with interest rates at all-time lows, we should expect higher interest rates in the future. However, the costs to lenders will be unprecedented. Cooperatives should anticipate that funding large projects through a mortgage refinance will become obsolete. Shareholders in cooperatives with interest-only loans should be particularly concerned.

 

Merlot Management

14 years in business

Beth Markowitz, President

Technology will be the driving force behind a broad spectrum of changes in our industry. These will range from the online availability of offering plans and other documents to paperless applications and payments, and even the monitoring of building-wide mechanical systems. While the need for less paperwork and the increase in automation of services should result in more efficiency and a streamlining of processes, we must not lose sight of the human element, as we are first and foremost a service industry.

 

Matthew Adam Properties

13 years in business

Ira M. Meister, President

Technology will continue to be a driving force in management, giving birth to more changes and improvements. While instant communication has greatly improved communication among boards, managers, and staff, the focus will be on improvements in services and direct communication with the management company for shareholders and unit-owners through social media, the internet, or the next new technology. Energy conservation will continue to benefit as we become more sophisticated in analyzing usage, purchasing energy in a way that keeps down costs, conservation, and promoting green initiatives. Technology also will open up new areas in board participation and education. Yet, let us not forget that experienced, quality managers and their dedication to customer service are required for excellent management. Technology is a valuable tool but no substitute for the personal touch.

 

Awaye Realty Management

9 years in business

Arlene Waye, Principal & Senior Property Manager

The biggest changes to affect property management and the co-op/condo market are already starting to happen. Advances in communication technologies will make for better-informed tenants and boards. There will be more transparency in management and more fluid payment systems that will allow for unprecedented tenant/management integration. Green technologies are also poised to make a huge impact. Buildings will become more efficient and economical. As for our local Brooklyn properties, they are becoming more luxurious while remaining affordable. Coupled with low interest rates, this will make co-op and condo ownership even more attractive to buyers.

 

Veritas Property Management

5 years in business

Carl Borenstein, President

For co-op/condo boards and their property managers, the coming decade will take its cue from the current drive for clean energy and internet-based environmental systems. The difference is that today it’s an innovation; tomorrow, however, it’ll be a mandate. Energy-consumption benchmarking will evolve into an efficiency or green reporting requirement. A building whose heating plant isn’t upgraded or whose personnel (superintendents) aren’t trained in new technology won’t have options in 10 years. They’ll be gone. n

 

 

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