In both articles New York city ranked at the top of the heap in expenses per square foot. North of $20 per square foot in the big apple and $10-12 for comparable buildings in Dallas.

Not that it is easy to keep expenses for our portfolio down. We get a little break on property taxes compared to Dallas, but otherwise, we work at it. We negotiate electricity agreements, get better pricing on insurance by buying coverage on a portfolio level. And we competitively bid some service contracts every year, just to name a few of our efforts.

The payoff for us comes when one of our properties goes on the market. We get to show a prospective buyer financials that reflect our work and our strategy. Financials we can be proud of. We will just keep sparing those expenses.

When it is possible, however, they should be kept together.  Here is why.  When Leasing and Management teams work together, they produce better results.  They work together better when they are within the same company.   A property’s Leasing Agent can and should give the property’s Manager feedback on the property’s appearance as it relates to their leasing effort, and this communication can have dramatic and positive results on the leasing effort.  Timely introductions of new tenants by the Leasing Agent to the Manager can help get that relationship off to a good start, and smooth the tenant’s transition into the building.  These things may seem simple, but often they are overlooked when two companies are involved.  It’s challenging within the same company, and yes, even with two companies it can be done.  It’s just easier to get done when a single company has accountability.

We’ll start using the work order module soon, we’ll get the tenant portal up & running, and integrate the automated A/P system.  Right after we find where we wrote down that new password.

So we almost have to “sneak up” on improvement.  We talk about it at huddles, and we or in pizza or tacos while we watch a webinar.  Webinars have become a major way we work at improving our skills, especially when it is free, as in the case of those provided by our insurance company Liberty Mutual.  This year the plan is to watch the one on disaster preparedness and a new webinar on, of all things, learning best practices for “observation.”  How to see, now that sounds like an interesting one.  Who said Property Management was boring (not me,   that’s for sure).   it is apparently the case that it takes skill to be able to take in all the elements of a situation, and it’s a skill that can be learned.  Sign us up for that one.

Then there are a couple of webinars on understanding liability insurance.  I realize I may be in a distinct minority in saying this, but I think it’s helpful for Property Managers to gain a good understanding of the ins and outs of insurance.  it seems to me that this is an area we can add value in, and I’m all about adding value, so my Property Managers and I will be front and center for that one.

The building where SCM’s offices are located is more than 70 years old, and it leaked something awful the first year after the restoration was complete.  We applied sealer to the masonry, caulked and re-caulked the windows, and tracked down every drop of every leak until finally, all leaks appear to have stopped (it is so hard to type with your fingers crossed). Thankfully, in this case, our tenants were very understanding, especially since they could see we were working so hard at it.

We’ll keep at it, and try not to hate the rain for coming down.

For the property management division, a couple of the outcomes we have worked on this year include:

1) Communication with tenants – Every tenant is getting our survey this year, which means we will be able to communicate with every tenant via email from now on.

2) Preventive Maintenance improvement – Every property will build a PM Log throughout the year, so that the owner will have a list of the specific PM tasks completed, and when those tasks were performed.

We are not the largest property management firm, but in these two areas, we are excelling.  Why?  Because we are focused on it, working hard to make it happen, and sticking with it until it does.

For more on the background for our “results” based efforts, check out this article What it takes to be great published way back in 2006, and as relevant today (well, admittedly you might now disagree with the part about Tiger Woods being great).

I think the Philadelphia Phillies probably thought their pitching would save them in 2011, but guess what, their hitters still had to hit, and they didn’t, at least in the last game of the series against St. Louis.  The Phillies “system” didn’t save the season, and a computer system won’t make preventive maintenance happen either.

So we did two things.  First, we started a paper-based preventive maintenance log system for each property that tracks the kinds of tasks that you could call “preventive maintenance.”  Things like a/c filter changes, etc.  Then, we made September our “Plumbing Month.”  For the month of September, our guys focused on checking the water supply line connections under sinks, to make sure there are no leaks about to start.  The plan was to get under every single sink in every single building, in September.

The bottom line is, whatever the system indicates you’re supposed to do, you actually have to do that thing.  Computerizing the system just means the computer is telling you to do it, that’s all it means.

When we get to the computerizing part, it should be easier, because we already get the work part.

In addition to the form was also a list of documents the REP (Retail Electric Provider) can accept as proof that you do, indeed, own the building and can contract for electricity.  We always get held up on this particular point.  If we are about to take over a building that is changing hands, we need to start a week or so ahead of time to get electric service started.  At that point, our client does not have anything that shows they own the building.  It’s a dance.  Yes, we will get the CO (Certificate of Occupancy) and send you a copy of it.  Trust us.  We are waiting for the day we can’t convince that kindly voice on the other end of the line and the service is discontinued.  Did I mention that unhappy scenario?  A Property Manager’s worst nightmare.

None of the documents listed were too helpful in place of the CO, however.  A closing statement was mentioned, but again, if you’re trying to make arrangements BEFORE the closing, that doesn’t help.

Oh well, maybe the form will help.  If not we will just have to continue to rely on our wit and charm to get us by.

Not that it’s so easy.  Paperwork abounds.  Time to act is short once pricing is offered, and agreements must be read in detail.  So in an effort to get a handle on it all, we structured a contract that will phase in the properties on a three year contract, as their current contract expires, they will be added to our master contract.  At that time we can bid and contract for all of the properties at once, which will make our lives easier and help us keep it figured out.

And it is SO easy to overpay for electricity.  Complexity and circumstances can result in a rate that is not competitive, and unless you’re consistently paying attention, you might not even know it.

On the flip side, knowing what you’re doing can help you get a competitive advantage.  We’re all about that.

When we began that process, we were fortunate that we had a couple of aces in our hand going in.  When we began the management assignment for this building in 2008, the HVAC system was on its last legs, and the roof leaked like a sieve.  No option but replacement.  Lucky for us and credit to the owner, who decided to go beyond the lowest bid to step up the replacements a bit to achieve higher efficiency.  Who knew that choosing a membrane roof and high efficiency HVAC units would make the difference between LEED and no LEED?  But it did.  And having the ability to attain LEED helped the GSA choose our building for their 40,000 square foot office.

Before we replaced the roof and HVAC our electric bills were in the range of $25,000 per month for the 75,000 square foot building.  After installation they dropped to $14,000.  Even with the third floor fully leased, the bills haven’t gone above $17,000.  Energy efficiency works, and LEED helps it work even better.