NYCís Property Management Powerhouses
Posted On November 1, 2017
Tallying the titans in the fiercely competitive sector — as city regulations mount and demand for white-glove services skyrockets
By KATHRYN BRENZEL
(Illustration by Neil Webb)
When Forest City tapped FirstService Residential to manage its 363-unit modular Brooklyn rental building at 461 Dean Street in Pacific Park, at least five other companies were vying for the gig. But FirstService, one of the largest property management firms in North America, had a clear advantage. The company was already managing two other Forest City buildings: its 76-story rental tower at 8 Spruce Street in Lower Manhattan and its 36-story rental building at 80 DeKalb in Fort Greene.
The real estate investment trust had chosen FirstService for those two properties at a time when the management giant focused almost exclusively on condo and co-op buildings. But Forest City’s upper management saw potential in bringing condo-level service to its rentals.
Managing residential properties in New York City “has become much more hospitality-oriented,” said Susi Yu, the landlord’s executive vice president of development. Door staff, for instance, are trained to act on a par with what would be expected of a hotel concierge, including “staying on top of work orders, taking packages up to the residents during the day and opening car doors,” she explained.
“It’s much more than collecting rent,” Yu noted.
Of course, few property management firms do just that in 2017. Running such a business in a city of more than 8 million people can be a thankless job — one that often involves dealing with angry tenants, navigating complex city regulations and making the most out of aging mechanical systems.
Residential property management is also an industry with a checkered past, from mass corruption crackdowns in the 1990s to more recent problems, such as the property manager in Sunnyside, Queens, who filled his building’s lobby with Nazi and Confederate posters earlier this year.
But a dozen property managers interviewed for this story said the job has become more white-glove in NYC in recent years as it continues to evolve from coordinating building repairs and collecting rent to providing full-service customer relations. And tenants have grown to expect immediate responses to questions or repair requests.
“We’re not just the managers of brick and mortar,” said Susan Camerata, the chief financial officer of Wavecrest Management, a Queens-based firm with roughly 130 employees. “We’re managing the people, too, and the issues that come up. It’s become a much more intensive job.”
Within rentals, condos and co-ops alike, property managers have always been the middlemen who serve as the eyes and ears for the landlord, developer or co-op board. But they are also largely responsible for the quality of life of a property’s residents and can therefore make or break a building’s reputation.
For that reason and others, competition can be fierce and large firms like FirstService can gain and lose thousands of apartment units in the span of a few years.
To get a closer look. The Real Dealdove into the industry this month, ranking the city’s top property management firms by the number of residential units they oversee in Manhattan and the outer boroughs. For the purposes of this ranking — which is based on data from the city’s Department of Housing Preservation and Development — we focused on the firms that have an ownership stake in less than 50 percent of the properties they manage.
Many of the top firms in Manhattan and the outer boroughs acquired smaller companies or scored major portfolios from competitors in recent years to gain a stronger foothold in the market. And the stakes have perhaps never been higher: The job is more complex than ever, according to industry sources, due to the increase in city regulations and rising rents. That puts even more pressure on firms to provide a higher level of services, even if clients don’t demand it upfront.
At the same time, property management is still viewed as stable ground in the volatile world of real estate — an important quality as the high-end residential market continues to soften.
“Unlike other areas of real estate, it is recession-proof,” said Neil Davidowitz, president of Orsid Realty Corp., which ranked seventh in Manhattan with 12,504 residential units in 118 buildings. “Regardless of what the value of the asset is, you need someone to manage [it]. Many businesses have difficulty collecting their fees. One good thing about property management is that we get paid every month.”
Leading the pack
FirstService dominated as the top property management firm in Manhattan with 27,877 residential units across 264 buildings, and the top firm in the outer boroughs with 27,800 units across 356 buildings.
Rounding out the top five in Manhattan were Douglas Elliman Property Management with 27,465 units in 310 buildings, AKAM Associates (a division of AKAM Living Services) with 24,267 units in 171 buildings, Halstead Management with 19,313 units in 234 buildings and Rose Associates with 13,146 units in 75 buildings.
About Rose Associates, Inc.
Based in New York, Rose Associates is a developer, owner and operator of premium residential properties. From planning a new development to managing day-to-day property operations, the Rose 360 Platform offers a full range of services designed to maximize the value of real estate. The firm oversees more than 26,000 units across New York, with approximately $2 billion in projects under development. Rose recently opened the historic skyscraper 70 Pine Street, which the firm is transforming into a luxury rental property with 644 residential units, 132 extend-stay apartments and a destination restaurant/lounge occupying the top four floors.