Copyright Institute of Real Estate Management Jul/Aug 2002| [Headnote] |
| Property managers are serving up quality customer service to attract and retain tenants |
Not long ago, real estate property managers were engaged in a comfortable, low-key existence of rent collecting and custodial responsibilities. Property managers navigated the quiet backwaters of real estate and avoided the spotlight of higher performance expectations.
That idyllic state of affairs ended with rising demands to improve financial performance and to create additional value, as well as tenants' desire for better customer service. The recession and Sept. 11 added fuel to the fire, putting more pressure on property managers for improved performance.
Property managers are being judged by how well they can adapt to these recent changes.
Andrew Schlauch, vice president in the Atlanta office of San Francisco-based Kingsley Associates, a real estate research and consulting firm, said real estate owners and operators are facing the challenges that inevitably accompany change.
"To a large degree, the success of property managers in meeting these challenges and in positioning their companies for long-term success will depend on how well they serve their customers," he said.
Structural Shift in the Industry
"There's a structural shift in the industry today as tenants become increasingly aware of and concerned about the level of service they receive. Recent studies of tenants occupying more than one billion square feet of commercial space nationwide cite service improvements and the service relationship as top criteria for improving retention," he said.
Schlauch said the real estate industry emerged from the recession with intensified focus on the bottom line. "Customer service had limited value when the market was hot, but now it's clearly the way property managers can differentiate themselves from their competition. Keeping tenants in place through good customer service adds value to the bottom line," he said.
Thomas Gille, CPM,, principal of San Francisco-based REAL Systems, said: "It's definitely a tougher market today, one that has made dear the need to differentiate from competitors with better service. The overall goal is tenant retention."
Pamela Martin, director of community relations for the Vienna, VA-based 
Southern Management Corp, said her firm is much more focused on customer service, implementing tenant retention as well as marketing programs designed to attract new tenants.
"We're forging stronger relationships with corporations through target marketing. In addition, we do a lot of training for our on-site property managers. They're the CEOs of their apartment communities, expected to take those communities to the next level," she explained.
Lisa Trosien, president of Aurora, IL-based Impact Marketing & Training, said the recession and aftermath of Sept. 11 deteriorated market conditions, forcing landlords to give concessions and spotlighting the need for improved customer service.
| [Photograph] |
| Property managers need to connect with tenants on a one-to-one basis. |
Now Role for Property Managers
The role of the property manager has changed as a reflection of the state of the industry.
In Gille's view, the property manager's altered role is one of insuring the existing tenant base is satisfied. "It means spending more personal time with tenants and connecting with them on a face-to-face basis," he said. "Managers need the skills that will create positive experiences for tenants. The building is not just a place where you house somebody."
Mindy Williams, editor of Rent & Retain magazine, said property managers and owners lose about two-thirds of customers due to lack of personal contact.
Martin and Trosien both said being an asset manager is the key to keeping vacancies low. Trosien said managers need to know the impact of concessions on the property and how to implement a marketing plan. "Managers need to be much more focused on inside and outside marketing and how to keep the back door shut," she said.
Schlauch said tenants are no longer struggling to find space in the wake of increasing supply from the development pipeline and a glut of sublease space.
"Tenants now have the luxury of being more discriminating about customer service, which will lead to enormous financial implications for owners," he continued. A recent study of a 12 million square foot office portfolio with a 6 percent rollover showed approximately $900,000 could be added to the bottom line for every 10 percent of expiring space the company renewed rather than re-tenanted.
Williams said tenants are a lot choosier. In the multifamily market, she said the average client calls 10 apartment communities and visits 8 apartments before making a decision.
Amenities In Demand
Gille said the most popular amenities are basics such as good management and parking, versus frills such as concierge services. A high-speed Internet connection is a basic requirement of technology tenants. Day care, especially for those employers using it as a recruitment tool, is also desired.
Commercial tenants require upgrading of common areas and parking while residential tenants value washer-- dryer connections and concierge service. Security is an important requirement for both residential and commercial tenants.
A residential survey by Apartments.com indicated 57 percent of respondents named swimming pools as the most frequently requested amenity, followed by apartment air-conditioning and washer-dryer connections.
In Schlauch's view, both commercial and residential tenants want good communication and follow-through. Commercial tenants are interested in amenities that add convenience such as on-site food service. Residential tenants value on-line rent collection or payment by credit card, housekeeping and dry cleaning services, package acceptance and concierge services.
Based on Williams' poll of property managers in North Carolina, Atlanta, Dallas, St. Louis, San Diego and Boston, the most in-demand amenities are high-speed Internet connections, covered parking and 24-hour security.
Williams said many property management companies are installing systems enabling residents to report problems and make service requests by phone or via the Web around the clock.
The aim, Williams said, is to reduce move-outs by increasing customer satisfaction. "Make sure your residents have a variety of ways to report their service requests."
Some property managers are taking the creative route to customer service. One property manager in Salt Lake City implemented a "Service Six Days a Week" program, whereby service technicians are on call six days a week on a rotating basis, Monday through Saturday. A Chicago manager hangs service request forms on residents' doors each week while another manager offers residents a day of free rent if service requests have not been completed in 48 hours.
Small Cost Services
Small or no cost services that can generate tenant goodwill include candy, note cards with a customer service number, free continental breakfast and complimentary videotape rentals. Monthly "meet and greet" lobby gatherings with tenants and quarterly face-to-face meetings with decisionmakers are other techniques to try. Outfitting security and janitorial staff with spiffy uniforms also helps change the perception of service.
Schlauch said property management ranks only behind price and location as top factors in the tenant's decision to renew. Trosien said rent concessions are the most important factor, while Martin said customizing and upgrading of apartments is the key.
Looking forward, property managers will be able to increase their customer service quotient by providing tenants with Internet-based services that will speed and improve communication. Whatever the methods, however, property managers' success will continue to focus on quality customer service.
| [Sidebar] |
| "Managers need the skills that will create positive experiences for tenants. if Thomas Gille, CPM |
| [Author Affiliation] |
| John Bell is a Chicago-based freelance writer and frequent JPM contributer. |
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