(Be sure to check out our podcast taking a deeper look at property management trends.)
Managing Your Way to the Top
By Mike Ratliff and Jack Kern
The economy has been rapidly changing, and with it the demands from owners, investors, partners and tenants. In no way have these dynamics become more evident than in our 2013 Ranking of Top Property Managers. Collectively, these property managers represent many of the most successful and influential firms across the United States, with some even having a global presence. A major factor in our formula for ranking these firms was diversity across sectors. Due to the focused nature of the multi-family industry, apartment managers were given their own respective list in Multi-Housing News. What we sought to do with this month’s CPE survey was to determine where primary leadership was emerging and to identify those firms that had the right sense of growth, leases in place and management teams that are the standard in their market sectors. We were impressed by the number of owners that have shown growth in the past several years under what would be described as less than ideal circumstances. We focused our survey on the office, industrial, retail, mixed-use, healthcare, hospitality, and some miscellaneous uses. Not surprisingly, all but a small number of property management firms exhibited experience and capabilities with at least two of the sectors and more than a third of our respondents are active in three or more.
In this competitive environment, many of the owner-managers were confronted with rapidly changing market demand and found the need to recruit, hire, train and provide an orientation to the industry so that they could remain competitive. Indeed, our list of the top property management firms represents the best in their sectors and showed that by improving occupancy rates. On a period-to-period measure, from 2010 through year-end 2012, occupancy increased for all of the firms except for three, with those likely attributable to portfolio changes (another kind of challenge). The gains were substantial, with all firms approaching the mid-90 percent range. We believe that leaders rise during both positive and negative market events. Our evaluation of occupancy changes, changes in leases, square footage under management and other factors all suggest that acquisitions with strong management practices will continue to show growth into 2013, and many of our survey respondents will stay at the top of the list.
The CPE 2013 Ranking of Property Management Firms utilized self-reported property characteristics for all firms. We measured square footage, number of leases, number and size of properties under management, property operations owned or managed, participation in property sectors, sustainability practices and other factors. Preference was given to those firms that had strong fundamental growth and provided services to more than one sector. The overall size of the firm and the number of square feet figured in the rankings, and ultimately the firms were selected taking into account all of the submitted information.