Managers And Brokers A Common Team

November 4, 2002
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GRAND RAPIDS — Not everyone who owns a building wants the daily hassles of managing one.

Instead of collecting the rent, paying the bills and making sure the plumbing works, some building owners reportedly only want to go to the mailbox to grab their dividend check.

It’s not that they’re lazy or irresponsible, it’s that these check-grabbers are just investors. And as investors they rely on property managers to make sure their tenants are happy and the building runs smoothly.

Increasingly, at least more often than not, it seems that outside building managers either belong to a commercial real estate brokerage house or are closely affiliated with one.

The area’s largest commercial companies have building management divisions. S.J. Wisinski & Co. and CB Richard Ellis do. So does Grubb & Ellis – Paramount Properties.

But which is adding which? Is the brokerage house adding a property management firm? Or are the property managers getting into commercial leasing? Well, both are likely occurring but the former seems to be happening the most.

“I think quite often a brokerage firm likes to be affiliated with a management company or own one and have one in house so that they can ensure the clients that they represent in the purchase of a building that they can assist them in providing good continuing management of that building,” said Michael McDaniels, president of Paramount Management.

McDaniels is a 30-year veteran in the commercial industry and leads the Paramount division from his downtown office at 50 Monroe Place.

He entered into the affiliation with Bill Bowling four years ago. Bowling co-founded Paramount Properties in 1995 and is now chairman of the real estate firm.

McDaniels manages a number of buildings here — including the one he works from — and three more in Muskegon. His experience, however, isn’t limited to office buildings, as he also manages five small retail centers and a retirement home. He has also headed a construction company and has helped to design buildings, including the Steketee’s department store on Monroe Center.

Today a building manager can customize services to an owner’s needs, such as just doing daily hands-on maintenance and nothing more.

But McDaniels said a manager usually does just about everything imaginable most of the time — like making sure the windows are washed and the elevators are running — along with a few unimaginable things less than some of the time, such as fighting a tax bill on behalf of an owner.

So in most cases, a manager has total responsibility for billing and collecting rent; billing tenants for their share of increases in a building’s operating expenses; and making sure that all the provisions of a lease are being enacted.

“In addition to that, we’re generally, but not always, responsible for janitorial services, building maintenance, and, perhaps, appealing real estate tax increases,” said McDaniels.

“We may be responsible for insuring a building, getting competitive bids on property and casualty liability insurance and making sure that the coverage is appropriate,” he said.

Budgeting is another chore that managers often do. McDaniels said a manager will create one, get an owner to agree to one, and then have to make one work for the fiscal year.

“So we have a lot of fiscal responsibility, as well as physical responsibility,” he said.

Even though a building manager can cover a lot of ground, McDaniels didn’t think that members of his profession had as many responsibilities as a facility manager may have. He said facility managers may also have to delve into the design of a workstation, the ergonomics of an office, or the layout of a manufacturing plant.

“A building manager doesn’t have to go quite that far,” he said.

But, truth be known, McDaniels has ventured a bit into that field, too, having designed build-outs for tenants and located individual offices within a building.

He has also been involved in developing real estate sites such as 50 Monroe Place, which he has managed for the past 16 years, along with the downtown Days Inn and the Hampton Inn on 54th Street.

And he owns buildings through a few companies he has.

“As a building manager, I can appreciate what developers do and what building owners want, because I’m a building owner, as well,” said McDaniels.

So far the building manager and commercial real estate brokerage affiliation is working for both parties in this case, and McDaniels can only see the alliance continuing.

“It’s valuable to the Grubb Ellis people because they can point their clients toward a management company that they know has been a successful management company with a lot of experience. So those investment clients that don’t want to get truly involved with the management have some place to go,” he said.

“As the property manager, I think we have a better feeling of how the tenants themselves are doing and whether they’re liable to fold up shop or not.

“And we’re then able to notify the Grubb Ellis leasing people that there is a potential vacancy here, and they ought to start to think about filling it.”

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