Opportunity Comes Knocking (JPM)
IREM members discover ways to grow their businesses during these tough economic times
by Diana Mirel
The following is an excerpt from the May/Jun 2009 issue (Volume 74, Number 3) of JPM�, Journal of Property Management.
Despite the dearth of fortuitous news and statistics regarding the U.S. economy�especially the real estate sector�property managers are uniquely poised to take advantage of opportunities in this difficult economic environment. The fact is, property cannot run itself, no matter who owns it. And when times get tough, people often turn to professionals. Today, property managers are in high demand, and they are utilizing their professional skills to grow their businesses by exploring niche markets and services that will boost their bottom lines.
"Property managers have to do everything on a budget; you are always trying to do more with less," said Marjean Pountain, CPM�, president of Pountain Partners in Elkhart Lake, Wis.
The multifaceted abilities these property managers develop are all the more important in troubled times: "All of those talents go well with today�s economy. You have to scale back," Pountain said. "The fact that property managers had these skills in better times makes them hotter commodities in today�s economy and today�s times."
What�s Happening?
Investors and property owners are increasingly realizing that talented property managers can help insure their investments survive and thrive.
"For the most part, property managers are being affected positively," said Lori Burger, CPM, PCAM, CCAM, CAM, senior vice president/director of marketing for Eugene Burger Management Corporation, AMO�, in Rohnert Park, Calif. "When times are good, small owners and investors of real estate property tend to think they don�t need management companies. But, when things start to go sideways, investors say, �Wait a minute, my big-box owners are moving out. I better get someone who knows what he/she is doing to come in here and salvage the tenant, bring in new tenants or market my building.� So, right now we�re in growth mode."
Most notably, there has been a steady rise in outsourcing property management duties. For instance, Eugene Burger Management Corporation recently had a large management proposal come in from a company with five million square feet of commercial property spread across the West Coast.
"They�re looking for professionals to come in from the ground up to optimize the bottom line, to bring profit to their bottom line," Burger said.
However, property management is hardly immune from the recession.
"There is economic stress in everything we touch," said Jesse Holland, CPM, president of Sunrise Management and Consulting, AMO, in Latham, N.Y. "[We�re] seeing higher vacancies and more lease cancellations. [We�re] seeing more people trying to renegotiate things in the middle of leases, [as well as] bankruptcies and layoffs. All of those issues impact the property manager because he/she is the person who has to deal with the fallout."
As a result, property owners, managers and investors are all watching their receivables closely and setting the bar higher.
"The world is a very nervous place right now," Holland said. "That is translating into a lot less patience in general� there is a lot more negotiating going on. The expectations are much higher."
The full article is available as an online exclusive in the May/Jun 2009�JPM� issue.
IREM Members have free access to the JPM� online archives and the �Online Exclusives,� articles that are only available on the IREM Web site. Non-members can subscribe to JPM� at www.irem.org/jpm.