Commercial management drawing more players to the table
By Linda O’Flanagan
Modern property managers are swapping their clip boards and coveralls for a place in the boardroom and, if the Institute of Real Estate Management has its way, they could take over the C-Suite.
“We are seeing a shift in real estate management as a career of coincidence, as it was for many senior practitioners, to a career of choice,” said Joe Greenblatt, CPM, president elect of IREM.
“We are now recruiting people who are very well educated, have earned a CPM (Certified Property Manager designation) and are 25 years old. Think about the impact they will have just because of the age that they are coming into the industry.”
In New York City bold-faced IREM alumni include Jeffrey I. Brodsky, president of Related Management; David Kuperberg, CEO of Cooper Square Realty.
Accredited commercial managers are collecting a median salary of $94,000 a year (at last count, done in 2009) and they’ve been officially labeled among the happiest employees in the country. A survey by CareerBliss in 2012 ranked them No. 2 – tied with executive chefs and surpassed only by software quality assurance workers .
“As a group, managers are generally happy because they find their work gratifying,” said Greenblatt. “They can see the tangible results of their work when so many of us can’t. For that labor and effort, we see tenant retention and satisfaction, and return on investment for clients.
“These are metrics of success that can be measured and, as investors and owners become more sophisticated in their demands, it is driving the requirement that managers have not only strong technical skills, but soft leadership skills as well.
“The results are available for everyone to see in real time. If you are not good, it shows immediately.”
With managers recognized as being more pragmatic and risk averse than their real estate contemporaries, Greenblatt said more and more people who recognize that in themselves are finding their way into the industry.
IREM’s job has been to help them make the leap from the basement to the boardroom through a platform of education and outreach that has been recognized as industry leading.
“When the recession hit, we were in the middle of an accounting conversion, our budget was askew and we had to make adjustments,” said Beth Machen, current IREM president. “ If we wanted to keep moving forward, we had to come up with a way to innovate funding and provide services and information that brought value to members and target projects that are important to us.”
The organization funneled its resources into website upgrades, e-books, social media, education and leadership programs.
And, instead of targeting only members, it has embraced the management industry as a whole to continually raise standards across the board.
“We are focusing on serving our membership as part of a broader industry,” said Machen. “Demands on real estate managers across the spectrum are increasing, in some cases very steeply.
“Our membership represents the upper end – the best educated real estate management professionals in the business, yet there are thousands of other real estate managers functioning in the same environment of increasing demands. We want to serve these people as well , and reach the full spectrum of those engaged in real estate management.”
IREM has signed educational Memorandums of Understanding with firms such as NAI Global, Coldwell Banker Commercial and Transwestern and has partnered with universities like Cornell and Georgetown to integrate management skills to real estate curriculum.
Among its legislative efforts, the Institute has been actively lobbying the Environmental Protection Agency against applying new lead paint regulations to public and commercial properties and it is campaigning for Internet sales tax equality for online and physical retailers.
The result has been a three percent increase in membership over the past three year, to 18,000 individual members managing nearly $2 trillion in real estate assets.
“Our belief is that if we provide value to a broader array of real estate managers, then they will progress in age with us,” said Greenblatt. “ It not just about our members but, from an altruistic angle, our bylaws say we are here to serve the industry.”
Added Machen, “Our message for the industry is that we want to make them the best they can be, which will move our industry forward and make our properties more valuable. It’s all about value.”
According to a report from Ariel Property Advisors, multi-family sales in second quarter of 2013 jumped 50 percent in transactions from the first quarter, saw a 20 percent rise in buildings sold, and a 63 percent jump in the dollar volume of those trades.
“A lack of inventory in the first quarter created pent-up demand for multifamily assets, which when combined with higher prices led to a substantial increase in activity in the second quarter,” said Shimon Shkury, president of Ariel Property Advisors.
“We believe the market in the remainder of the year will build on this momentum and that rising interest rates also may push more owners to sell versus refinance.”
Year-over-year, 2Q numbers decreased seven percent in transaction volume, four percent in building volume and seven percent in dollar volume from the same time last year, which saw 229 buildings sold for a total of $1.7 billion.
But after a lackluster first quarter, Manhattan saw a 67 percent jump in sales in the second quarter with $839.729 million worth of product sold. Notable deals included a $62 million portfolio sale along the Bowery and the $400 million sale of 400 West 63rd Street and 60 Riverside Drive.
Northern Manhattan, which has seen stunning growth since the beginning of the year, according to a Massey Knakal report, has seen prices rising from $169 to $213 psf and higher prices per unit, to around $142,397.
For the second consecutive quarter, Brooklyn led the New York City submarkets in number of transactions, with 49 sales comprising 69 buildings; a 63 percent increase in transaction volume and 77 percent increase in building volume from the first quarter of 2013. Coupled with June employment reports, the city is recovering from the recession well.
According to an assessment of NYS Labor numbers carried out by Eastern Consolidated, the city added 14,3000 jobs in June, the highest since 2000.
Among other industries, the construction industry had significant job growth in June, adding 4,600 jobs, while securities and real estate both had gains with 400 and 600, respectively.
According to the report, the growth was expected “given the increase in construction permits issued this year,” and recent progress with the Hudson Yards project as well as the World Trade Center site.
In November 2011, Related announced that more than 20,000 construction jobs will be generated by the construction of the first building in the Hudson Yards project, which will house anchor tenant Coach.
More than 100,000 construction jobs will be generated by development of the Eastern Railyard (including over 80,000 direct jobs) and over 10,000 permanent new jobs will be generated upon completion of both yards, which will also serve as home to 30,000 office workers.
Other posts by Linda Barr O'Flanagan