Property Management: Acquiring the New Skill Set
- Sep 13, 2019
Technological advances and other shifts in the market are shaping the role of the property manager. In order to perform in such a competitive environment, the professionals of the new generation need to have a diverse skill set. In addition to keeping up with tech, they must be able to successfully navigate the slowing economy.
Cheryl Gray, president-elect of the Institute of Real Estate Management, and Scott Jones, chair & chief elected officer of Building Owners and Managers Association International, discuss the required expertise for future managers and how effective operations can help keep a portfolio above water even in lean times.
How do you foresee the role of property manager changing in the coming years?
Jones: The role of the commercial property manager has already changed greatly just in the past few years, and I believe we’ll continue to see more shifts in responsibilities. Since the Great Recession, property managers have been called to assume more duties, and as buildings continue to become more complex and technology driven, so too will the roles of those who manage and operate them. The property manager role will continue to evolve in a way that requires them to be masters of technology; interpreters of the data, metrics and analytics generated and captured by this new technology; and focal points of hospitality for their clients.
Gray: The role of the property manager is in constant evolution. Property managers constantly adapt to modifications made to the built environment through building codes, regulations, sustainability, security and myriad other issues. In the foreseeable future, customer service will continue to be one of the biggest changes, as property managers are moving from a “space-centric” focus to a “service-centric” focus.
Another area of change will be the increasing impact of technology. The skills and knowledge of property managers and building staff will need to continuously advance in order to keep pace with the disruptive impact technology will have on building operations and occupant expectations. The emerging integration of information and operational technology will disrupt how real estate teams and
IT departments within those real estate firms collaborate.
Finally, I foresee an increasing need for property managers to be able to manage all asset classes, with many new developments or redevelopments being mixed-use. It will no longer be adequate to simply know how to manage a residential asset or an office asset or a retail mall, as they are all being integrated into one complex.
What is the best way to mitigate the impact of the next economic downturn on an investor’s portfolio?
Jones: A well-run building is going to attract and retain the best tenants, and full buildings with high occupancy rates undoubtedly will be in a better position to survive the next downturn. A strong property manager can also lead the building to the latest innovations that deliver operational efficiencies, cost savings and increased service to the building occupants. For example, depending on where a building is in its life cycle, a property team may want to consider major new advancements in energy management that can save significant operating expenses. Updating a building sooner rather than later will certainly help a building remain competitive for longer and be more attractive when it really counts.
Gray: The fundamentals here have not changed over time: capital investments, tenant satisfaction and understanding the owner’s objectives are the keys to success. For capital investments, understanding the needs of the property in relation to regulations, functionality or competition is critical so that investments are made when economic conditions support the investment. Trying to make improvements during an economic downturn, when capital funds may be limited, is not an optimal time to find you lagged making those investments during better economic conditions.
Having a solid customer relationship management approach will ensure that you retain a good relationship with your tenants and can partner with them when not only you are impacted by the economic downturn but they are, as well. This will help a manager know if there are problems with a tenant’s ability to pay rent—whether they are looking to downsize or relocate—or simply know the manager’s firm has the connections to maintain that strong relationship.
Finally, knowing your client’s objectives for their asset is critical for any property manager. A long-term-hold asset will require a different management approach than one that is short term, so the manager must have an overall compatible management strategy to meet the owner’s objective and work with them regardless of the economic conditions.
What is one way you think technology will disrupt property management in the next five years?
Gray: The primary disruption I see is the integration of existing systems within buildings and the layering of new technology on those systems. In most instances, existing systems have segregated infrastructure, and a corporate-level IT strategy does not always align with building-level implementation. There are many challenges we have yet to overcome as an industry, for ourselves and with our vendors. The additional challenge with this disruption will be training building managers and operators to have the necessary skills needed as we continue to see the integration of information and operational technology platforms.
Jones: Most commercial buildings are already starting to deploy technology to improve tenant movement or energy usage. I believe that artificial intelligence is the next game changer on the horizon. Many property managers are using internet of things (IoT) devices across their buildings and portfolios to create mountains of data.
The next level will be sifting through that data to find actionable information to make operational improvements that change client experiences or building expenditures. Importantly, our industry also will need to continue to be prepared for threats around cybersecurity. The danger of cybercrimes is real, and BOMA International is working to help educate our members accordingly.