Property management has always been a core part of the business for Houston-based PM Realty Group. In fact, property management was the firm's only focus for much of its 50-year history. But in the past decade, PM Realty clearly recognized the need to expand its service base in order to survive amid a changing environment — one where clients were increasingly demanding more services as they moved to consolidate relationships with service providers.
Today, PM Realty offers more than 10 different service lines, ranging from corporate and investment services to due diligence functions, and the company is continually searching for new ways to expand its service platform. “Companies that have survived and prospered have really looked and listened to their clients,” says Jimmy Gunn, PM Realty Group's president of property services.
For example, PM Realty has donned an investment hat — assembling different investment funds in response to clients seeking equity partners for real estate investments. The company also provides engineering services for owners that opt to do their own property management. And for one institutional client, PM Realty even does all of the property-related accounting.
That strategy has paid off in landing major new assignments such as the 837,000 sq. ft. Reliant Energy Plaza in downtown Houston. In addition, PM Realty has expanded its management portfolio by 6.5 million sq. ft. in the past year to 154.3 million sq. ft. — elevating the firm from 15th to 12th place on this year's Top Property Managers Survey.
That full-service approach is nothing new in the real estate world. For years, third-party firms have been touting a lengthy list of services, ranging from leasing and investment sales to corporate services and construction management. But what is new is that list of services continues to expand into new territories such as real estate tax consulting, energy efficiency and economic incentives.
Expanding service menu
Hanging on to property management assignments in today's competitive real estate market is no easy task. Management contracts are constantly changing hands as new owners step in amid the frenzied investment sales activity. What's more, an active mergers and acquisitions climate is putting more corporate real estate contracts up for grabs. Offering clients a one-stop shop is key to both retaining existing clients and adding new business.
Howard Rosenthal, a senior vice president and principal at Colliers Arnold in Clearwater, Fla. says, “Most clients want to be able to come to a company that can handle their real estate in all aspects, from managing, leasing, marketing and selling to valuation and insurance.” The company's management portfolio has grown from about 5 million sq. ft. three years ago to the current 8 million sq. ft.
Colliers Arnold hired an in-house construction manager that will serve a dual purpose: spearhead the company's own development projects, and oversee large construction projects on managed properties. Colliers Arnold also is in the process of adding facilities maintenance services for clients who manage their own properties, but want to outsource tasks such as landscaping or maintenance.
Yet as the big get bigger, one of the challenges is merging the bulk of a large firm with the agility to perform as efficiently as a small firm. Mega-firm Trammell Crow Co. has developed an internal network that helps its 6,400 employees communicate effectively with each other. “We need to keep our size and advantage, and at the same time not build an organization that is too cumbersome to navigate,” says Steve M. Bassett, global head of project leasing and property management at Dallas-based firm, which ranks No. 5 on this survey with 429.4 million sq. ft. in its property management portfolio.
The firm has created a network that starts with individuals in the field serving client's day-to-day needs, followed by local property managers, regional management leaders and national leaders. Subject matter experts are also available to offer advice on specific topics such as energy or technical services. “We have a platform to connect people efficiently and quickly in a multitude of ways that enables us to operate more efficiently,” Bassett says.
Having practice leaders that oversee entire business lines also provides a point person that can “connect the dots” city by city, Bassett notes. For example, a single client might have a large portfolio of properties that are serviced by different managers at Trammell Crow offices around the country. Having people look at that relationship at the local, regional and national level helps to ensure a consistency in the quality of service as well as how that service is delivered.
|Hampshire Properties||9 million sq. ft. of mixed-use properties in the New York Tri-State Area.||CB Richard Ellis|
|Cleveland Clinic||Facility management contract for approximately 2.5 million sq. ft. of medical office space.||Trammell Crow |
|Westcor Properties||2 million sq. ft. of mixed-use properties in the San Francisco area.||CB Richard Ellis|
|Dividend Capital Trust||1.65 million sq. ft. industrial portfolio in Gwinnett County, Ga.||Colliers Cauble|
|CDC Houston Inc.||950,000 sq. ft. of Class-A retail space in Houston.||PM Realty Group|