CREJ - Property Management Quarterly - April 2016
W ith a bit of comparative license to Gordon Gecko’s famous quote from the movie “Wall Street,” during which he proposed that his audience consider an alternative, positive outlook on greed, I would propose that the typically frightening prospect of change in the property management world can be, and usually is, a good thing. The reality of the investment real estate world we live in today is that it is dominated by owners and investors who purchase and own most commercial properties for three to five years. Then they sell to reap the financial benefits from their investment in the asset and the appreciated growth in value for their own investors. Our challenge as property managers is to navigate and embrace these never-ending, inevitable changes in ownership or management and create the greatest benefit for our employees, clients and ourselves. Throughout my more than 30 years of property management in Colorado, I have experienced several significant changes for myself and my employees, and without exception those changes ultimately resulted in better opportunities for every individual who stayed focused, didn’t get sidetracked by the “what if’s,” and continued to perform their jobs at their same high level through the turmoil. So, what can you do when you get a call from your boss or asset manager telling you that your property or portfolio is being sold? And before you hang up and process the information, you hear from the sale listing broker’s assistant wanting to send you their list of all the information they need by tomorrow. I’ve outlined four key areas to focus on immediately after receiving that phone call. 1. Kick it into a higher gear. A property manager’s responsibility is to serve the needs of his clients, and the client is looking to you to help drive this effort to a successful conclusion. No one should globally know more about the asset(s) than the property manager. This sale process is the manager’s opportunity to sell themselves and their team as knowledgeable, valuable to the property’s successful performance, and as professionals in representing his client and company. 2. Pull your team together. As the leader of your management and engineering team, they are all looking to you for direction, support and a positive attitude. Lead by example and remember that you’re only as good as the people on your team. Hold a team meeting as soon as possible to honestly provide whatever information you can regarding the sale on timing, process and expectations over the next few months. You don’t want your people to learn first of a potential sale from someone outside your team. In many cases, the individuals who are most concerned are the lowest compensated positions who are the least likely to be the impacted by a sale, so don’t forget to include everyone. Ask your management firm or client if stay bonuses can be considered for key members of your team. Fear of change can cause your people to consider moving on when you need them most, and they should be rewarded for all the extra efforts required in a sale. 3. Focus on the presentation of your property and people. Prepare your property and employees for perhaps dozens of guided tours. Determine and agree with your owner and listing broker on the best route through the facility and the management representatives who will participate. Give strict guidance on what information or discussions are permitted by your team members. Focus on the cleanliness and orderly appearance of everything seen on the tour route including the property and your team. Practice the tour with your team before the first tour, and try to walk it before subsequent tours. Surprises are never good. 4. Double check every piece of information. The laundry list of due diligence information that will be requested to be produced is vast and leaves almost no subject untouched. Work with your team to divide and conquer the compilation of all the information, but clearly identify to the team that no one releases any information unless it has been approved for release. Be certain your client agrees with the release of information and exactly what documents are being provided. Only provide documents or information through the listing broker and never deliver information directly to a prospective buyer. Check the accuracy of the information provided, ensure it is up to date, and correct any discrepancies you can before it’s distributed. Nothing says subpar performance to your client, buyer or successor management company than a list of expired month-to-month agreements, old certificates of insurance or poorly organized files. When you are ready to transfer or upload information, many of the top-listing firms will provide assistance on site to scan and upload approved information. Many times when we are asked throughout our careers what we love about the property management profession, the answer often repeated is that we love the diversity of roles and that the job is different every single day. The day you hear your property or company is being sold is definitely one of those different days. Don’t fight the change, but rather embrace it. Redouble your efforts to focus on your job and support the people on your team. Change is usually for the good, but only as good as you make it.