In a recent column, we discussed the advancing relationship between property and asset managers. Now, on the heels of a compelling new white paper released at our recently completed Fall Leadership Conference in Salt Lake City, we think it’s important to explore this relationship more fully.
“If there’s any blurring of lines between property management and asset management, it’s only in the mind of property managers.” So says Craig Cardwell, CPM, owner of Island Investment Interests in Memphis, Tenn. and one of a team of professionals who contributed their views to the white paper. Among the key points of the work that stood out for me were:
The great advances that property management has made in the past few years; how these advances have contributed to the above-mentioned blurring of lines between asset and property management; and how up-and-coming property managers might be better equipped to think like asset managers. Let’s take them one-by-one.
As Cardwell points out, asset managers, themselves strapped to do more, are turning increasingly to property managers for financial input. Property managers, in turn, through increased educational opportunities and more powerful analytical tools, are accepting that challenge.
But as is indicated by a recent Job Analysis Survey we conducted of our membership, this need has muddied the waters. Titles vary from firm to firm, and today we are finding people with the title of asset manager who are nevertheless performing the tasks of day-to-day building operations, tasks no asset manager would ever do, tasks such as resolving tenant complaints, managing tenant move-in/move-out procedures and monitoring preventive and routine maintenance programs. Clearly, as the white paper indicates, “a title does not an asset manager make.”
But what it also makes clear is the increasing—and increasingly strategic—union that exists between the two disciplines. As Drew Genova, executive managing director of asset services for CBRE, states, “The input from the property manager is critical to producing a great budget that will run the real estate.”
But for that partnership to be successful, it takes more than providing information. “The goal is to marry the right property manager to the right asset manager,” he says. “It’s all about the relationship.”
Interviewees all agreed that a successful property manager today has to think like an asset manager to make that union complete. This is as much a matter of DNA as it is the available analytical tools.
And while it’s up to the property manager to provide the DNA, certainly the tools are there.
“Gathering and analyzing intelligence used to be the purview of the asset manager,” says IREM past president Joseph Greenblatt (president and CEO of Sunrise Management in San Diego). “Not only is that capability now available to property managers, but it also an expectation that they be familiar with the analytics that drive decision-making.”
In addition to better online analytical tools, the increasing sophistication of the property management profession, as stated above, is due in large part to more, and higher-level, educational opportunities. New entrants to the field have access to this wealth of learning while they are still in school, grooming them earlier for the analytical nature of today’s property management profession. This leads to the question of how better-suited younger professionals might be to serve in that new strategic partnership.
As IREM Education and Knowledge Products Chair Dr. Deborah Phillips, CPM, states in the white paper: “Younger CPMs will be given more opportunities at a faster rate than baby boomers, due simply to the speed of business, sophisticated real-time operating platforms and the transaction volume in the market today. They are certainly more technologically savvy and collaborative in their approach to problem-solving.”
This does not mean that we can discount experience: “The true test of sophistication is how well professionals (young or old) can survive through every market cycle,” says Phillips. “When I look at my top students today, I smile because they have been spoiled by strong market conditions driven by pent-up demand.”
But ultimately, as the white paper concludes, “The property manager’s ability to think like an asset manager will dictate the success, indeed the very course, of his or her career. And it would seem that the upcoming crop of property managers is more naturally suited to the task.”
The white paper is an important first step in our organization’s ongoing study of the relationship between asset and property management. For more information on the white paper, please click here.
In addition to her role as IREM 2015 president, Lori Burger, CPM, PCAM, CCAM, is senior vice president of Eugene Burger Management Corp. in Rohnert Park, Calif.