Alter Asset Management (AAM) is an affiliate of The Alter Group Ltd., one of America’s premier real estate firms. Over its 40 year history, AAM has maintained a steady hand, strong balance sheet, and according to their site, a portfolio which maintains a 97 percent occupancy rate.
All of which Sam Gould, president of Alter Asset Management, says has allowed them to emerge from the shadows of their parent company.
“The Alter Group is in a different part of the real estate business,” Gould said. “We operate legally as an autonomous company. We’re responsible for being a standalone company, so although we may have a linkage to Alter, we are not a division.”
According to Gould what AAM has provided historically, is property management services for owners who need personalized services, and tend to use their own money or have partners, as opposed to using institutional capital.
“We have been very fortunate to have a group of clients who buy and sell property, and are looking for a different approach,” said Gould. “They want to be able to talk to the property manager, the president of the company, the appropriate accounting person, and have continuity in that process.”
“Also, if they choose to, they want significant direct involvement in the property, as opposed to a more hands off approach that is based off of reporting, portfolio parameters, and those kinds of things.”
One of the things that seem to allow Alter Asset Management to be a niche player in a market of service providers that tend to be very large or small, Gould says, is that they are interested in retaining their long-term clients and expanding their market as a boutique player in the property management business.
“We cater to clients less institutional, more entrepreneurial, and who want, like, and need a more personalized service model than the larger companies by their very nature are able to provide.”
He added, “I think in a lot of cases people don’t know that there is an institutional quality property management company available for private owners and investors. As we are marketing Alter Asset Management more, we are finding that that’s sort of the surprise for some of the folks that we are approaching.”
Although much success can be gained in the property management business, Gould stressed there are challenges to succeeding in his line of business as well.
“It’s a difficult business to start out in,” he said. “In terms of commercial, industrial, retail, and medical-office management, I think the most difficult thing is getting name recognition. The second most difficult thing is to be proactive in responding to client needs and the increasing pressures to do things more quickly, accurately, timely, and electronically.”
“Keeping up with the ongoing march of technology and the need to provide timely, accurate reporting on more than one operating platform and maintaining the direct connectivity is a barrier to new companies in property management.”
He added, “On one hand it’s a plus because there is a lot of software technology available, but on the other, it is costly to keep up with it and property management is not a high- margin business.”
Typically when people think of the real estate business, Gould said, they think of the real estate development business, mortgage banking, and all of the other financial aspects it consists of. According to him, property management is probably a bit slower growth in comparison to those businesses.
“The property management business is not on the profit side,” he said. “It is probably among the lowest margin portions of the real estate industry, and it is not glamorous. Now, if it was not profitable we would not be doing this. But it is not by any means what one thinks of when you think of big money real estate.”
On the contrary, Gould says the keys to running a successful property management business are the same in almost any business.
“You have to have high quality, well-trained, employees who both get it and understand the culture of the company they are with, as well as understanding the culture of the clients that are served.”
Having been involved in the property management business for over 30 years, Gould says he thinks people’s perceptions of the landlord is an old cartoon character with a curled up moustache. Although in reality, he says, most landlords are professional companies who are working for sophisticated property owners and clients.
With 30 plus years of experience, Gould says he’s seen the shifts in the business, the biggest shift being technology.
“I remember pre-fax machines”, he said chuckling. “The technological changes will continue to develop, accelerate, and cause changes in how property management companies do business. But I think the basics are always going to be there.”
“There’s always going to have to be someone doing mundane things like renting apartments, or office buildings, doing janitorial work or even managing interior construction, and going out and inspecting buildings.”
He continued, “Property management in my opinion is always going to be a people business, both managing people and interactions business. How it is carried out and performed will certainly evolve. In order to survive as a property management manager, you will have to embrace, accept, and move forward with the changes.”