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Leasing & management: The new partnership

There is a reason that team-building techniques continue to top the list of hot topics in most management books and at corporate retreats year after year. Despite the industry's best efforts to harness re-engineering and "WOW" project paradigms to commercial real estate agendas, the team dynamic often remains a difficult and elusive process.

Protecting one's turf has long been at the root of relationships between leasing and property management professionals as we attempt to bridge the sizzle and the service delivery system. Leasing brokers need to sell space with the promise of exceptional service from build-outs to faster Internet access.

Management, on the other hand, must actually provide the day-to-day service that keeps a tenant renewing and expanding after the honeymoon is over. Unfortunately, the net effect of these individual pursuits can translate into internal conflict and a mediocre performance from the tenant's point of view.

At Arden Realty, we addressed that gap head-on when a major acquisition required a new approach to the old problem. In 1998, we cemented our position as the dominant landlord in Southern California with a key portfolio acquisition of 50 properties in our targeted submarkets. Seemingly overnight, we had doubled our inventory and as a public company, needed to redouble our efforts to provide new value to our shareholders.

More than 18 million sq. ft. of office space required top-flight in-house leasing, oversight and retention with maximum efficiency. There was no time to reflect on our individual department agendas. Whatever success we had experienced previously in our respective departments was yesterday's news. As division heads of the two disciplines, we had to set the tone for a new alliance if we were to integrate these properties into our portfolio and address market expectations.

That new partnership is continually refined, but approximately 18 months later we can confidently say that our new model has been implemented in four stages, virtually transforming Arden's workplace.

Phase one was the result of our practical realization that shifting from the industry standard of you to we, was key to directing our brokers and line managers to do the same.

This was not a theoretical premise. We changed the vocabulary of our industry peers and defined a new business relationship. We also took a hard look at our corporate objectives and affirmed that we would rise or fall together based on our ability to pursue higher occupancy and retention in tandem. Once we dropped our individual performance for the bigger picture, change began to occur.

Phase two involved soliciting feedback and buy-in from our managers on a plan to reorganize our operational structure. We staged a series of internal focus groups that, ultimately, involved all of our brokers and managers from the top down. In cross-departmental meetings, we worked through the concept of eliminating traditional leasing and management boundaries by process changes and re-forming regional teams with managers from both arenas. The plan involved reconfiguring the portfolio into new regions based on the market and property needs.

Arden then took the concept a step further by designating personnel from corporate - accounting, engineering, tenant improvement and MIS - and adding them to each regional team. All team members were moved into a single office in their respective regions.

We characterize the initial reaction from staff as doubtful, typical resistance and reluctant participation that moved quickly into strong acceptance which has resulted in some of the company's most creative solutions.

Phase three was a training program for our vendors that brought them into our strategic plan and regional reconfiguration to participate in increasing efficiencies, lowering costs and increasing service. We also conducted a portfolio-wide tenant survey to address immediate tenant issues with the new team focus.

Phase four involved developing and implementing the technology to facilitate a seamless cycle of lease-up, management, billing and renewal - intranet communication - that also serves as a platform for other efficiency objectives throughout the company.

The results are significant. We have reduced our lease-to-move-in timeframes by approximately 50%, lowered expenses, increased retention with our 18-12-6 campaign and improved our performance projections. Our vendors have become more responsive and cost efficient. Our internal teamwork has skyrocketed: Property management now assists in leasing mini and spec suite office space, all team members address capital expenditure programs based on mutual goals and renewals are handled as a team releasing effort rather than an administrative management process.

Our alliance between leasing and management has brought the oversight of our 142 properties and 18.5 million sq. ft. to a new standard. Beyond integrating our acquisitions into our portfolio, it has catapulted Arden's new model of synergy and customer service to the next level.

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