The job description for a property manager these days is beginning to look a lot like an umbrella policy - it includes anything and everything.
"There are so many things that have changed over the course of a decade," says Nick LeMasters, general manager of Cherry Creek Shopping Center in Denver. LeMasters has worked in the retail industry for the past 25 years, serving as a property manager since 1990.
"Clearly, you still want to make sure you have a shopping center that is clean and safe and attractive to the customer," he says. Ten years ago these issues would have been the property manager's primary focus, but now managers have staff in place to handle more routine responsibilities.
Delegating traditional duties enables the manager to focus on more strategic matters, such as the shopping center's position both in the community and in the competitive retail marketplace. "My role as a shopping center manager is much less tactical and far more strategic in the way I spend my time," LeMasters says.
Adapting to a new era Paul Nydegger, general manager of the Saint Louis Galleria in Richmond Heights, Mo., points to the broader role of today's property manager. "We're taking on more responsibility and wearing more hats," says the 15-year industry veteran.
Part of the expansion of duties stems from changing dynamics in the retail industry. Shopping centers have become destinations, and factors such as tourism and entertainment are driving customer traffic more than ever before. In addition, Nydegger says, owners are placing more demands on management staff to boost revenues through functions such as leasing and sponsorships.
"I think the job is considerably more demanding than it was eight to 10 years ago," concurs Charles Lhotka, a first vice president of shopping center management at Chicago-based General Growth Properties. Property managers are still responsible for repairing the roof, sweeping the parking lot and making sure the common areas are clean. However, managers also are saddled with new duties.
"Today's general manager has to be much more financially oriented than in the past," Lhotka says. Managers are coping with a variety of financial tasks that range from writing budgets to operating specialty leasing programs. "A good portion of owners today are publicly traded, so you have to understand how decisions you make are going to affect the stock price of the owner."
Restructuring taking place within the real estate industry during the 1990s has brought additional changes for the property manager, says Anthony Buono, managing director for retail services at the El Segundo, Calif., office of Los-Angeles-based CB Richard Ellis. Advisors at the institutional level are streamlining their operations and eliminating large real estate staffs.
"A lot of the financial and strategic tasks have been pushed down to the management level," Buono says. "That means property managers in our company today have to be financially sound so they can understand discounted cash flows and financial analysis. That is a pretty new dynamic since the early 1990s."
Managers also have been affected by the growth in the REIT industry and increasing pressures on REITs to expand their funds from operations (FFO). "A lot of that pressure goes back to the center level, and that falls on the manager's shoulders," says Frederick Meno, a senior vice president at Baltimore-based Prime Retail. Managers are being asked not only to oversee all aspects of day-to-day operations, he notes, but also to generate additional revenue through strategies such as temporary leasing and common area advertising.
Creativity counts Today's property managers are expected to think creatively in order to uncover new sources of revenue and develop strategic alliances. "Certainly a lot of the macro initiatives need to be created on the corporate level," Meno says.
But the managers, too, are expected to come up with their own innovative ideas. "The challenge that all of us on the corporate level have is to challenge our managers," Meno says.
Regardless of whether those initiatives are coming from the corporate office or the property manager, the ultimate goal is to control CAM costs and boost revenues. "In today's environment, the general manager has to think about how you increase the bottom line," LeMasters says. Those issues involve controlling tenant costs and searching for new business opportunities. "Ten years ago we probably weren't thinking in those terms as much as we are today."
Property managers also are more involved in merchandising and leasing. "Property managers do a lot more research, as well as planning with the owner about the types and size of tenants, and where a tenant might fit into the project," Buono says.
At Cencor Realty Services Inc., property managers are a key participant in discussions about tenant mix and center vacancy. "I see things changing here within our organization," says Linda Jackson, executive director of property management at the Dallas-based firm.
Cencor makes a point of including property managers in decision-making via bi-monthly team strategy meetings that include a representative for the landlord, as well asand property managers. "It's an informal meeting that allows for the free flowing of ideas addressing what we can do to enhance the property," she says. "It allows the property manager more input and ownership in a property."
The strategy meetings analyze tenant performance, such as which retailers are thriving and may need to expand. "There is a lot of talk about how we can help those tenants that might not be doing so well," Jackson says. Such tenant guidance might include advertising or merchandising assistance, or suggesting the tenant improve its space with new carpet or paint.
In the past, Cencor's property managers focused on day-to-day operations, not playing an active role in assisting tenants. "That's no longer acceptable," she says. "We want our managers intensely involved with the tenants. "
Cencor expects its property managers to visit each property within their portfolio once a week, and meet with each tenant at least once a month. "Because they're out there every week," Jackson says, "they have their finger on the pulse of what's going on, which is different than just looking at sales numbers."
Strategic partnerships Property managers are tackling greater responsibilities in their communities, too. In Grapevine, Texas, Cencor's Grapevine Towne Center participates in a variety of activities such as the town's annual Grape Fest.
"We're encouraging our managers to talk to store owners, and ask what groups their businesses are involved in around Grapevine," Jackson says. For example, last Christmas the center provided photos with Santa with donations going to a local charity. The goal is to participate in activities that promote the center within the community, boost traffic and create better relationships with tenants.
The community often looks to the regional mall for leadership, or as a spokesperson for the retail industry, LeMasters says. "It's important for us in management to stay abreast of trends and related changes within our society."
Cherry Creek Shopping Center has taken an aggressive leadership position in the city of Denver. The 1.1 million sq. ft. mall is considered one of the top tourist attractions in the Denver area. As a result, the center's management staff works to promote tourism on behalf of the community, as well as Cherry Creek's own interests, according to LeMasters.
"What we try to do in terms of our activities is align our center with organizations that keep us challenged and focused on new opportunities," LeMasters says. For example, Cherry Creek has taken on an active role with the Denver Metro Convention and Visitor's Bureau, and LeMasters currently chairs the advisory board for the bureau.
"It keeps me on the cutting edge of what is happening in that industry, and how it relates back to the center," he says. "Through that alliance, I make sure that we are up to date on new business opportunities that come to Denver."
The qualified candidate Fortunately for today's heavily burdened property manager, some tasks can be delegated to others on the management team. At each General Growth property, for example, there is typically a general manager, marketing manager and operations manager. The marketing manager drives sales, while the operations manager has assumed many of the property manager's duties related to maintenance, security and mechanical issues.
Says Lhotka, "Over the past eight to 10 years we have upgraded those positions so people can pick up the workload that the manager would not have been able to handle otherwise."
As the property manager's role continues to evolve, so do the necessary qualifications for those positions. The ability to build and maintain relationships is critical, since property managers are interfacing more today with third-party owners.
"The property manager in a lot of cases has become that single point of contact, regardless of whether it's a leasing, accounting or management issue," Meno says. "The property manager needs client relationship skills to get those answers."
Other skills essential in today's environment include the ability to communicate to diverse audiences. "In a given day, you could be talking to an investor who would like to tour the property or a customer who is in the center for the first time," LeMasters says.
Having retail experience is another asset. "That allows the general manager to speak the same language as the retailers," he says. LeMasters worked for Mervyn'sfor 15 years before he was hired by Taubman Centers Inc. in Bloomfield Hills, Mich.
Property managers also need to retain a basic understanding of the physical plant side. "They don't necessarily need to be able to solve every problem, but they need to know where to go to get the solution," Meno says.
One way for property managers to keep their heads above water amid the increasing demands placed on them is ongoing education. Successful property managers will continue to re-engineer themselves in response to market changes, Meno says.
"Our company does a considerable amount of training," agrees Lhotka. General Growth offers leadership training for its general managers, as well as considerable computer and information systems training. "We have a pretty sophisticated online learning program. We also participate in annual conferences and ICSC training programs."
Sales ability is another area that General Growth emphasizes because of the active role managers are playing in center leasing. Strong business operations skills are also key, since decisions made at the property level affect the owner's bottom line net operating income (NOI), Lhotka adds.
Property managers will be forced to reinvent themselves as their responsibilities multiply. Moreover, says Nydegger, the rise of the Internet may prompt property managers to search for new ways to tie that technology to the shopping center, such as providing Internet stations or kiosks within shopping centers.
"The customer is going to be even more demanding for services," he predicts, "and we're going to have to provide those additional services. I think the manager's role is going to change again."