Titled "Transforming Real Estate Management: Four Strategic Issues," the report is the result of a year-long effort during which IREM called upon its members to identify, analyze and prioritize the major issues changing the dynamics of the real estate management profession. As prioritized by IREM, technology is the Number One issue, followed by workforce development, business competition, and risk management.
The report observes that technology has penetrated every aspect of the property management business, a phenomenon driven largely by the need to increase productivity and strengthen customer relationships. It notes that whenever there is a question about how to improve service or reduce costs, technology increasingly seems to be part of the answer.
The report shows that part of the challenge is finding concise, unbiased, relevant information on emerging technologies specific to property management - then determining how to apply that new-found knowledge to provide effective, efficient solutions that lead to business success. It expands on the following tips contributed by IREM members to address the technology challenge:
The report notes that a serious shortage of talent looms on the horizon, challenging all industries, including property management. As a result, real estate managers are being forced as never before to focus on identifying, attracting, developing, rewarding and retaining qualified staff - a task made even more challenging in the face of declining profit margins, higher labor costs and competing career options.
The report references a study by human resources consultant RHR International in which 65 percent of the companies surveyed reported that they expect to lose 50 percent or more of their senior managers over the next four years. It also cites findings by consultant CEL & Associates that the overall employee turnover rate in the multifamily property management industry was 31.8 percent in 2004 - creating a challenge of overwhelming proportions. It then elaborates on these suggestions provided by IREM members to address the workforce development challenge:
The report observes that the property management business is highly competitive and becoming increasingly so, as evidenced by shrinking profit margins, mounting demands from property owners and clients, and rising expectations among tenants and residents. It notes that many owners now regard property management as a commodity service, creating constant pressure to lower prices. In response, some companies choose to compete more effectively by minimizing costs while others choose to differentiate their services, hoping to command a premium price.
According to the report, the growing challenge to property management is to consistently demonstrate the worth of the value-added services provided to clients or risk having a competitor step in and offer the same service at a lower price or present a higher value proposition. It then expands on these tips from IREM members to address the business competition challenge:
Taking and managing risks play key roles in how organizations create profits and value, the report observes. This is especially true of the real estate management business, having the usual risks associated with running any business, as well as the unique risks associated with the properties being managed and those who live, work, show, and do business there.
The report notes that in a post-9/11 world - with security a major concern and the cost of all kinds of insurance rising - property managers have found themselves facing a new balancing act: how to address the need for greater business security while at the same time accommodating demands from residents and tenants that their properties be easily accessible. It states that through it all, including increasingly unpredictable events such as Hurricane Katrina, having a solid risk management program in place is critically important. Finally, the report expands on these suggestions from IREM members to address the risk management challenge:
A copy of "Transforming Real Estate Management: Four Strategic Issues" is available at no charge.
