Region’s building boom attracts property managers
Newmark Grubb|Cressy & Everett opens GR office to handle west side of the state.
With dozens of property management companies in the Grand Rapids area, it might seem the market is a little crowded.
That’s not the case, however, according to Charlie Hoats, senior property manager at the Newmark Grubb|Cressy & Everett office in Grand Rapids.
The branch is new, opening last fall with Chip Hurley at the helm as managing director. The firm was established in 1946 and offers services regionally and nationally, with several commercial offices in the northern Indiana and southern Michigan areas. The company also offers buyer-brokerage and tenant representation for the public.
The Grand Rapids office is in Ada Township at 975 Spaulding Ave. SE.
Hurley introduced Hoats to the partners at the corporate office in Mishawaka, Ind., and he joined the team in March. The two currently are the only employees in the West Michigan market and have built the square footage under management to approximately 1 million in less than a year.
The entire Newmark Grubb portfolio manages 5.3 million square feet in the Michigan and Indiana regions.
The Grand Rapids market was opened up when the Grubb & Ellis|Paramount Properties turned into the Colliers International of West Michigan affiliate it is now. It took some time for Newmark Grubb to make the move north, however.
“The South Bend market was going really well for the company,” Hoats said. “They saw the opportunity up here and said the market potential is great, so they made the jump.”
The 1-million-square-feet mark is a big one in the property management world, according to Hoats. He’s seen some successful small firms manage that much with a small staff of two to six employees. He said he’s also seen larger firms manage a portfolio of that size with 10 to 20 employees.
“It’s a good market, and it all depends on the size of the staff and the approach the company takes on the market,” he said. “If you hit that number, you can be considered a serious property management company.”
Newmark Grubb’s first major commercial development was in 1979 with the University Park Mall in Mishawaka, a 1.2 million-square-foot mall, which created more opportunities for the company. Another major development came with the management of the city’s Edison Lakes Corporate Park, which has included more than $1 billion in total investment since the 1980s.
Hoats said he sees a similar potential for growth for the Grand Rapids office. Ideally, the branch will grow in size, likely to between 12 and 15 people. The growth will be dependent on the situation, however, not just for the sake of adding staff, he said.
The hiring will take place with the company’s culture in mind — a culture that embraces controlled expansion and employee happiness. The approach is one of quality over quantity in an effort to attract great brokers from the area.
“We want to grow at the right pace,” Hoats said. “We want to make it a place where everyone enjoys working together and makes this a place people want to be and an enjoyable atmosphere.
“Whether that takes a year or three years, we don’t know. We’re not just going to put 12 butts in 12 seats.”
Hoats’ real estateexperience covers 15 years, mostly in third-party management for owners of office, industrial and retail properties who didn’t want to perform landlord duties. He also has some experience in other real estate sectors such as medical, but Newmark Grubb’s main focus will be commercial property management, managing numerous projects that were developed for clients and on their own account. The management services are on a fee basis.
Hurley focuses on industrial, office and real estate-owned property, and has been with Newmark Grubb since 2013. He’s been assisting clients with real estate brokerage and planning. He helped Macatawa Bank with the preservation and disposition of its $40 million commercial portfolio while employed there from 2011 to 2013. He’s also held positions at the Wisinski Group, Grubb & Ellis and CB Richard Ellis. Hurley is currently the Society of Industrial and Office Realtors Michigan Chapter president and on the board directors for the Michigan chapter of the Certified Commercial Investment Members.
Hoats said there’s a large market for third-party opportunities in Grand Rapids. He said many of the major property management companies in the area are owners of the properties they manage and are quick to expand their portfolio by buying. Many of them aren’t interested in soliciting third parties that might want to help with property management, he said.
The pitch is a lot easier than some might guess. Hoats said the key is convincing investors that properties would benefit greatly by having a dedicated management company to take the hard work off their hands.
“A lot of our job is helping the investors understand that,” he said.
The office won’t limit itself to the Grand Rapids area. The stated territory is the western half of the Lower Peninsula and some areas in the Upper Peninsula. Hoats said he’s not sure how far east the territory runs and that it could go as far as Ann Arbor. The main focus is Grand Rapids, Kalamazoo, Battle Creek and the lakeshore, including Holland, Grand Haven and Muskegon. Some work has been done in Traverse City and Ludington, as well.
“We’re going to go as far as necessary.” Hoats said. “We’ll also make sure we have the appropriate resources in an area to make sure it makes sense."
If enough business is secured in Traverse City, for example, Hoats said the company might hire a dedicated employee for that area. It would also provide that person with a truck and tools to accomplish the necessary jobs so the company wouldn’t have to hire a contractor to do the work.
Hoats said West Michigan’s fledgling building boom is happening at just the right time for Newmark Grubb, especially since developers are getting more creative in the ways they build new projects and reuse existing properties.
To keep pace with developers, Hoats said property management companies also have to be creative in how they manage the properties.
“Sometimes we have to get really creative in the ways we can service them,” he said.
The office might be new to some, but Hurley told the Business Journal in November 2013 that it is actually a well established player.
“At first blush, to the public’s eye, it looks like there is a new company coming to town, but it’s going to be comprised of people that are already in the industry currently,” he said. “We’re not adding additional brokers to the market; it’s just a different platform that will be available for brokers that are interested.”