It’s good—healthy in fact—to take a step back occasionally in an attempt to view yourself as others see you. And it can also be very challenging. Property managers from around the globe got that chance at our recent Leadership & Legislative Summit in Washington, D.C. That reflection was provided by the head of one of the world’s largest real estate service companies and two senior asset managers representing major institutional investors.
These were: John C. Santora, Global COO and Chief Integration Officer of Cushman & Wakefield on the management side, and from the asset management world: Scott MacDonald, managing director at J.P. Morgan Asset Management—Global Real Assets, and Don Svoboda, director in the northeast regional office for Met Life. In a panel discussion, these three industry heavyweights provided interesting insights to what they expect from property managers.
Key to the discussion was how major global firms pick and choose third-party management firms. Is it always a case of size gravitating to size? The responses were much more nuanced than a yes or no vote.
“In gateway cities, such as Washington, New York, Boston or Los Angeles, you want a firm that’s global,” said MacDonald. “You want the greatest reach you can [get] because the competition is just not domestic, it’s international for those types of properties.”
He stressed that it wasn’t necessarily the biggest firms he went after, “but those firms that have broad reach. And it’s not just process and procedures, it’s the people. When you’re selling a major asset in the billions of dollars, you want people marketing your assets that have that global reach.”
MacDonald was quick to add that this doesn’t exclude smaller regional firms, which play a very important part in the asset management mission in other markets, where “global players simply don’t have that local touch, the local expertise.”
Svoboda agreed, explaining that MetLife as a long-term holder has strong relationships with the majors. “But there’s an opportunity for the other firms on the property management side. With our regional office network, we definitely, have a need to tap into that market tier.”
Massive or regional, he added, “We depend on our property managers to be mobile in terms of what’s going on in the industry and provide the research, analytics and experience.”
Both MacDonald and Svoboda said that, ultimately, “size doesn’t matter,” but the strength and professionalism of the professionals within the management organization do.
Santora noted that in the age of growing disintermediation, largely due to rapidly evolving technologies, on-site property-management presence will never go away. But with that comes the responsibility of making sure the tenant knows who you are.
“That’s how I judge how well our property managers are doing,” he noted. “When I hit a city I like to walk a few properties and if my property manager is introducing himself to the receptionist, he’s not doing his job.
“You need to build strong tenant relationships,” he continued. “That’s key. So is ensuring quality service is being delivered on a day-to-day basis and that you’re creating value through increasing income and decreasing expenses.”
It was a thought-provoking hour, one in which the assembled membership could gauge their performance by the standards of some of the best in the industry. As I said at the top, viewing yourself from the outside is a healthy experience.
Chris Mellen, CPM, serves as 2016 president of the Institute of Real Estate Management. He is also vice president of property management for the Boston-based Simon Companies, supervising the day-to-day operations of all properties in the firm’s portfolio.