With Retail Rebound, Property Managers Seeing Increased Demand
Retail activity is picking up commensurate with the strengthening economy, and, as always, tenants are seeking the most appealing, well-located shopping centers. North Plainfield-based retail real estate services firm Levin Management in recent weeks has secured several new assignments from property owners focused on ensuring that their centers are well positioned to take advantage of this renewed momentum. The firm, which serves a diverse, 95-property, 13 million-square-foot portfolio centered in the Northeast, also recently was ranked among the state's top three property management companies by NJBiz.
In the following interview, Levin's Robert Oliver, vice president of property management, discusses today's top priorities and trends in retail property management. Above all, he notes that the best programs create cost-effective solutions without sacrificing curb appeal or service quality.
When you begin a new assignment, what are the first steps?
It is fun diving into a new property, but it also is work-intensive. The most important first step involves establishing relationships with the existing tenants. In many cases, management of a property turns over for a reason. Our priority is to determine what needs to change. Our property managers sit with each tenant and discuss their business at the shopping center, any issues they may have and, also, what is going right. This communication is vital, and in this sense our managers serve as ambassadors for Levin and the property's ownership.
New assignments also come with administrative requirements, like transferring and reviewing utility accounts and service contracts. Strong contractor relationships are vital, and we work hard to establish them from the outset. Not only do these partners provide much-needed property maintenance services, they also serve as day-to-day eyes and ears. Our property managers are on site frequently, but our sweeping, landscaping and snow removal vendors often are key resources to let us know about a problem - such as a downed stop sign or a water leak. We stay in close contact with tenants at the properties as well.
Is increasing operating efficiency an early priority as well?
We always look to reduce or maintain costs, whether the assignment is new or one we have had for decades. Levin has been relatively successful at keeping costs steady for high-end services like sweeping, landscaping and snow removal. If we are happy with a vendor, when their contract comes due we will offer to renew it if they can continue at their current fee. For the others we go out to bid. We have very specific requirements and expectations, and we look for the best-qualified provider - which does not always translate to the lowest bidder. Vendors need to offer us superior service and a fast response time. To our advantage, because Levin has a large portfolio in a relatively concentrated area we are often able to save money using economics of scale.
Many service providers bundle services. Does Levin do this?
With just a few exceptions, I am not a fan of bundling. You absolutely can save money by contracting with one provider to handle snow removal, sweeping and landscaping. However, vendors frequently will excel in one or two areas - but not all three. Having multiple contractors in place also ensures a system of checks and balances when it comes to letting us know if they see maintenance that is not up to our standards. The ultimate goal is to balance cost savings and quality, and bundling emphasizes the savings side of the equation. At Levin, we approach this practice with great caution.
What are today's "hot" money-saving investments?
Levin has established more aggressive recycling programs at many of our centers, which has lowered trash removal costs significantly. For example, we went to single-source recycling (where the hauler separates recyclables from rubbish) at one property where we have a large trash removal contract. Last year, we saved roughly $13,000 there.
We also are increasing the use of LED lighting in shopping center common areas. At one center, we recently re-lamped an under-canopy section, replacing 150-watt lamps with new, 34-watt LED fixtures. We are saving nearly 120 watts per lamp on 16 fixtures that are lit 12 hours each day. Additionally, the new bulbs should last about five years vs. about half that time for the older bulbs, so they will require less maintenance. Beyond that, the new fixtures look great and they are brighter. Feedback from tenants has been very positive.
Radio-signal fire alarm panels represent a third investment area we are exploring for some of our centers. Traditional panels are monitored by phone. This newer technology communicates through radio waves, which eliminates the need for - and costs associated with - dedicated phone lines.
Why is it important to invest in property upgrades and renovations?
Proper shopping center maintenance saves money in the long run. Like anything else, if you let something go that might cost you $500 to repair today, three years from now you may have a real problem with a price tag in the thousands of dollars. Levin always takes a thorough approach to maintenance. Roofs are one of the most significant considerations at shopping centers. We conduct regular inspections and replace those that are at the end of their lifecycles in phases in accordance with annual capital improvement plans. Parking lots should be resurfaced frequently, and repaved before major issues arise. From an aesthetic standpoint, we repaint exterior doors and restripe parking annually, and analyze wear-and-tear on façades, signage, landscaping and other items critical to maintaining curb appeal.
The Northeast already has seen some significant snow this year. What are some special considerations for the winter months?
Having good snow removal contracts in place obviously is a top priority, along with keeping roof drains and water outlets clear to avoid ice floes that can lead to damage and leaking. In cold weather, it's important to make sure that sprinklered vacant spaces are heated to keep pipes from freezing. Other than that, if we do not get a lot of snow this tends to be a slower period and a perfect time to start getting ready for the coming year. We typically renew or award landscaping contracts in January and begin planning for spring projects. When the warmer weather returns, we are ready to move forward on projects that will uphold and enhance our clients' properties and, ultimately, their competitive positioning.
In business for six decades, Levin is one of the nation's leading retail real estate services firms, with a strong focus in the northeastern United States and an owner's approach to the business. Levin provides leasing, property management, accounting, construction management and marketing services for properties ranging from neighborhood, community, lifestyle and power centers, to enclosed malls, street retail, downtown stores and mixed-use projects in New Jersey, New York, Pennsylvania, Massachusetts, Virginia, and North Carolina. The company specializes in repositioning, retenanting and renovating retail properties - areas that have become particularly vital for today's institutional and individual property owners.
In addition to the recent NJBiz Top Property Managers ranking, Levin has earned a long list of coveted awards over the years. Since 2011 alone, the firm was ranked 30th among Top US Real Estate Companies and named three times among the nation's top property managers by Commercial Property Executive magazine, placed among the nation's top 10 redevelopers by Chain Store Age, credited as one of the state's top 10 real estate developers by New Jersey Business magazine, and ranked sixth on NJBIZ's Top Commercial Real Estate Developers list.