It’s an exciting time to assume the role of president of the Institute of Real Estate Management. Certainly, there is enough transformation on both political and economic fronts to keep us busy for the following year and well beyond. But it is a particularly interesting time for the growth of property management in Asia, where the pursuit of optimizing building value is creating unprecedented potential.
I had the opportunity to join an IREM delegation in a late-year visit to China, and three things struck me.
First was the truly global nature of the Institute. Second was how differently the field of property management is conducted there. Third—and this relates to that difference—was the thirst for knowledge of how to create and maintain asset value in a methodology that replicates that of the United States.
On the first score, we’ve been in Korea for a decade now and in Japan (where last year we installed 80 new CPMs) since 2002, with our first chapter opening there the following year. We launched our current program in Shanghai, China in 2011 and last year installed another 15 CPMs. This year will be a year of great Asian growth for the Institute. More on that in a bit.
On the second point, the concept of proactive property management is new to Asian practitioners. Here in the U.S., there exist two classes of practice—property management and asset management. They are tightly related, but clearly distinct functions. In Asia, property management is called asset management, providing some indication of how differently they view the profession.
In addition, much like office condominiums in the U.S., the tenant often buys their space and is responsible for its maintenance. As one can imagine, that dramatically changes the role of the property manager. For instance, many of the 4,000 Cushman & Wakefield property management professionals in the field are on-site in client offices and charged with facilities management of just the client spaces.
Beyond that, there is often no strategy for maintaining the building holistically, including common spaces and infrastructure. There are virtually no standard operating procedures to maintain those facilities. When you consider that there were almost 200 cranes in the air above Shanghai alone, building a mix of residential and commercial properties, a lot of them 50 stories and higher, it becomes clear how great the need is for proactive, holistic property management.
This brings me to the final point. As a result of this lack of industry-wide procedures protocol, there’s a thirst for knowledge of how to bring value to their assets, and they look to the U.S. for that insight. This extends as well to Asian investments in North America—and to the $25 billion Chinese investors are expected to put toward assets in the U.S. and Canada this year. So the need is clearly there.
And so is the opportunity for growth in a very young profession. On our visit, my colleague and 2016 IREM President Chris Mellen spoke before a group of 5,000 professionals, most of whom were in their 20s and just launching their careers. Meanwhile, in Shanghai, I had the honor of speaking before 300 young professionals.
IREM is tapping into that great potential, and within the first quarter of this year, it is our intention to lay the groundwork for a continued Asia growth strategy for the Institute. This will coincide with the expansion of our educational programs into new Asian markets. We are already planning another trip to Asia this March, specifically to Korea, where Don Wilkerson, our 2017 secretary treasurer, will be installing still more CPMs.
It is our intention to continue to grow our footprint globally, and a key part of that strategy is clearly Asia. The time is ripe, as we continue to see incredible growth throughout that continent.
Michael T. Lanning is 2017 president of the Institute of Real Estate Management. In addition, he serves as senior vice president and city leader for the Cushman & Wakefield AMO office in Kansas City, Mo.