Asset management is the key to finding the right property manager, according to Todd Siegel, VP of retail at Passco Co.—a firm that uniquely packages the two together so that owners can get the most out of their investment. Asset managers look at the full lifespan of the investment, while property managers handle the day-to-day operations. They are two sides of the same coin, if you are looking to get the best performance out of an investment. To find out more about this dichotomy, as well as what is happening in the management space, we sat down with Siegel for an exclusive interview. Here is what he tells us:
GlobeSt.com: What is the difference between asset management and property management?
Todd Siegel: Property managers handle the day-to-day operations of the property, such as collecting the rent, managing contractual agreements and making sure the property is “open” for business each day. Asset management however, really takes the property through the full lifecycle of the investment, from acquisition to disposition and everything in between, determining the overall plan for an investment and dictating the property management strategy. We always say that managers really do have all of the responsibilities of an owner, without actually owning the property.
GlobeSt.com: Tell me about your property management services and how they are unique.
Siegel: A lot of companies offer property management and a lot of companies offer asset management, but not all companies offer both in one package. Passco offers both. We are always looking at the day-to-day operations of the property as well as the long term goals for the owner. We marry the two and take a broader view of how to get there. We view the landlord-tenant relationship as a symbiotic relationship, and realize that a successful tenant makes for a successful owner.
We manage all retail property types, from single tenant to regional malls, and everything in between including entertainment centers, grocery-anchored centers and traditional strip centers. Working with so many properties, as well as so many tenants with often complex issues, means that we understand what it takes to make a property perform, and the work required to achieve and maintain the maximum performance out of a property.
GlobeSt.com: Property management is one of the seldom discussed areas of commercial real estate. What are some of the major trends you are currently seeing in this area?
Siegel: There has been a fundamental shift from goods and services to restaurants. Centers are becoming more food oriented, and that is where we have seen a big increase in rental rates. We also have seen an increase in operating costs due to the increased customer traffic and use changes. The soft goods have gone away in centers because you can get those products on the internet. This is challenging because while some centers can make that change, others simply cannot.
GlobeSt.com: What are some of the major challenges that you face as property managers?
Siegel: When it comes to property management today, one of the greatest challenges we face is identifying the right tenant mix for a center. This not only means appealing to the much-talked-about millennials with an increase in trendy food eateries and entertainment, but this also means catering to specific market demographics. It is paramount to recognize and respond to the growing desire for ethnic retailers, such as specialty grocers, which really speak to the needs of the surrounding populations’ demographic. Today’s retail centers must have the right mix of national credit tenants, up and coming food retailers, along with demographic-specific retailers in order to be successful.
GlobeSt.com: What advice do you have to property owners looking for a property manager?
Siegel: Owners need to fully understand the value a manager can bring to the table. It’s paramount that a property manager is candid enough that they can provide owners with a realistic expectation of what they can do with a property. By finding a manager that you can communicate with, and who fully understands your short and long term goals as an owner, you will be able to unlock the most value out of a property.
This article was originally published on GlobeSt.com.