By James Evans, CPM, President,
Institute of Real Estate Management
Once upon a time, real estate managers were little more than guys who collected rents and, on a bad day, unplugged a toilet or two.
If you looked up “Real Estate Management” in the Yellow Pages, hiring from any listing would get you someone more or less the same as any other.
Back then, real estate managers were commodities, undistinguishable from one another as to competence or experience.
But, as with the rest of the world, much has changed dramatically in the commercial property industry and in the role that real estate managers play.
The commercial real estate manager of the 21st century must manage real estate not just as a property but as investment.
Today, commercial real estate managers must still cope with maintenance and operations, but add to that the issues of managing real property as a business: complex contract negotiations, budgets, security, human resources, legal matters and long-term financial concerns – plus increasingly competitive market conditions and complex technologies.
To meet the expectations of ever-more sophisticated commercial property investors and owners, today’s real estate managers must successfully deal with all these matters if they are to add real value to the bottom line in this extremely fragile economic environment.
Moreover, with the widespread realization now that operating results, not speculation, are the underpinnings of real property appreciation in troubled times as well as over the long term, skilled professional managers increasingly are being sought to inject value back into distressed properties by optimizing operating revenue and controlling costs.
Clearly, then, the real estate managers’ job description now extends far beyond collecting rents, with more and more practitioners taking over asset management functions.
The industry increasingly is dominated by conglomerates, institutional owners and investment trusts – organizations that demand predictable and measurable profits and scrutinize every budget line item in the process. Commercial property companies may try to reduce costs by keeping real estate management responsibilities within their own organizations — even though they may not have in-house staff with professional-level, diversified, market-wise experience.
More and more owners and investors are now recognizing the added value that credentialed real estate managers and companies contribute to the bottom line.
Owners/investors can expect credentialed real estate managers to be experts in the financing and valuations of investment real estate, skilled in systematic and thorough site inspection and supervision, and savvy about marketing and leasing.
These are professionals who are comfortable being the face of their properties. They function as property CEOs, not as janitors. Credentialed real estate managers receive the training and skills needed to operate and manage real estate assets as a business rather than simply being custodians – cost-effectively building ROI and property value in both the short-term and long-term.
Credentials are an indicator of a true professional. Those who have made the commitment to earn a credential—and maintain it—will be focused on meeting the goals and objectives of an owner.
Recognized and respected credentials, such as the Certified Property Manager (CPM®) designation conferred by Institute of Real Estate Management, indicate that these individuals have demonstrated knowledge, experience and education about the management of real estate.
And, look for credentials from an organization with an enforced Code of Ethics that requires members to execute with fiduciary and ethical responsibility.
Owners and investors are appreciating the expertise that real estate management professionals bring to all aspects of the investment – from design and construction through ongoing operations and property enhancements.
Real estate managers can especially build real estate values if they are included in the planning and development process for new construction and renovation.
Those who oversee properties every day of the year can offer surprising insight into things like traffic flow, curb appeal, security and designing common areas – things that can boost ROI meaningfully.
For example, why should real estate managers sit in on landscape design meetings? Because they might point out that suggested shrubbery would keep a lawn mower from moving around the property easily – a small detail that can have significant financial impact over the long term.
Why should real estate managers have a say about the actual design of a property? Because they might have intimate knowledge of the local marketplace – with valuable insights into unit mix, unit size, technology readiness and other market-specific details. Also, real estate managers may have uniquely local perspectives on the pricing, promotions and advertising that will prove more effective than directives from a head office many states away.
No matter where commercial properties are positioned in the marketplace, they need a competitive edge to enhance the bottom line.
One great way to get that edge is to recruit the best real estate managers, in-house or independent. Credentials are one way to ensure that you are getting the best management for your real estate investment.