The need for, response to, and success of “some sort of cooperation among the men in Chicago interested in the management of office buildings” - expressed by Nathan William MacChesney, secretary of the Building Managers’ Association of Chicago, in the first issue of Buildings magazine circa January 1906 (known then as The Building Manager and Owner) - was merely a beginning.
Yes, building ownership and management was an established and respected profession by the early years of the 20th century, but the collaboration resulting from an organized and growing membership of like-minded visionaries would soon launch the unprecedented development of both an industry and an authority in the field. One-hundred years after the National Association of Building Owners and Managers (NABOM) was established in 1907, it’s clear that the profession remains ever-changing and in a constant state of progress, supporting both industry direction and personal development.
From the Past to the Future
Today, a savvy group of industry professionals leads the organization with insight and imagination as both the vocation and business continue to evolve. “Leveraging technology, running between sites, working off of BlackBerries: The role and responsibilities of the property manager are very different today than ever before,” says BOMA President/COO Henry H. Chamberlain. “On one hand, the professional has the challenge of managing the tenants and [creating] the right mix for the buildings; on the other, he/she is really expected to be much more asset-savvy in terms of the financials - the budgeting, lease rolls, and income streams coming into a building. It’s much more difficult being a property manager today than it was 20 years ago.”
The challenge lies, according to Chamberlain, in being even more things to more people. “It’s still important to have tenant relations, to build the relationships [within] the building and create the quality service, whether you’re on-site or managing multiple buildings from one location,” he explains. “And, clearly, tenants are even [savvier] than they were 20 years ago.”
When asked how the association has adapted in recent years to member needs, Chamberlain offered the following: “BOMA was founded originally in the Midwest as a group that was going to coalesce a network [to] develop and compare standards and benchmarks of performance, look at various options in the marketplace, share creative [practices and processes], and advance the industry and its building products. So, the core is still important to us. When you ask [the] members [of our] 90 associations, the networking is still incredibly intense. BOMA members are very good at helping each other problem solve. They’re also very good at mentoring. In the last 30 years, advocacy has become a much bigger, [more] regular event for us. We needed to be effective [over that time] because the issues being debated on Capitol Hill - from tax issues to asbestos to the Americans with Disabilities Act - were really affecting the finances of this industry.
“Going forward, such issues as energy efficiency and the environment will become an even greater focus, and advocacy will become even more important. Members love the grassroots aspect of BOMA, so leveraging [their involvement] and then creating the value back to the local marketplaces through the national issues and our effectiveness in Washington, D.C., will be key.”
The Industry Shifts; Professionals Must, Too
Throughout its history, BOMA’s on-site leadership has been supplemented - and complemented - by some of the industry’s most dynamic, active professionals. Today’s Board of Governors is truly exceptional: Chairman Kurt R. Padavano is COO at Bedminster, NJ-based Advance Realty Group; Chairman-Elect Brenna S. Walraven is executive managing director of national property management at USAA Real Estate Co., Irvine, CA; Vice Chairman Richard D. Purtell is general manager at Triple Net Properties, Cincinnati; and Secretary/Treasurer David M. Stucky is building manager/special projects coordinator for the City of San Diego.
In offering his point of view about the profession and its challenges, Padavano, a 20-year industry veteran, directs his comments toward two specific areas: investment real estate and corporate facilities management:
“Years ago, there was a fairly diverse and fragmented ownership structure on the investment side of commercial real estate; a lot of families owned commercial real estate. One of the most significant changes over the last 10 or 15 years has been to much more institutional ownership - a shift that is not insignificant in terms of the professionalism and transparency brought to the industry. Along with ownership by institutions and publicly traded REITs comes a transparency that’s required by government agencies and by the SEC, including the quality of cash flow, earnings, and returns.
“As a result, the individual professional has had to really expand his/her skill sets in terms of responding to market demands: financial reporting, the ways in which buildings are managed, tenants’ expectations of service levels, the technologies used in [building operation], etc. Because of the technologies that exist, there are a fewer number of people managing real estate these days, but expectations are that much greater. Accounting-software packages, work-order management, preventive-maintenance programs, etc. have allowed fewer people to do even more (at a higher level) than 10, 15, [or] 20 years ago.
“Looking forward, we’re now seeing another shift in which some of the large publicly traded ownership enterprises are being consolidated and taken private. We may see more of these mega-real estate ownership enterprises that are owned privately, not on the public markets, but that will continue to be managed at a very high level and under some of those same transparencies and institutional sophistication.
“On the corporate real estate side, the significant shifts over the past couple of decades have been from in-house to outsourcing of non-core functions.”
What does this require of today’s professional? According to Padavano, “There’s a need for specialists for individual functions, but I think the people who are going to lead these teams - and have oversight or vision - must be generalists. The average age of the building stock in the United States now is increasing; there are a lot fewer new buildings being built, which means today’s existing buildings will need to be retrofitted, adapted, and redeveloped as time goes on. So, the aging infrastructure and deferred-maintenance issues associated with these buildings being bought and sold multiple times in the recent past - as well as energy costs and sustainability interests - will require that property managers, technicians, and other staff become as knowledgeable as they have ever been.”
Learning ... Every Day
Walraven, BOMA chairman-elect, has long been a proponent of education, noting, “It was one of my big connections into BOMA [as I started] out.” Recently spearheading the BOMA Energy Efficiency Program (BEEP) - a recently launched program outlining operational excellence that has caught the interest of 10 times more participants (5,000 vs. 500) than was expected in its first year - Walraven’s interest goes beyond the educational gains. “We’re also looking to reinforce benchmarking through BEEP via the ENERGY STAR® Portfolio Manager tool,” she says, “so we can gather and share data with our members and the market about the accomplishments of participating in a low- and no-cost way for improving energy and environmental performance.”
That’s good, as she concurs with Padavano that expectations of the property professional are high. “We’re under a lot of pressure to drive values and performance, given what’s happened in the capital markets (with cap rates compressing, which in turn puts significant pressure on operating performance to earn the returns projected),” notes Walraven. “Although expectations and skill-set demands are higher than ever before, however, there’s a lot of upside growth for the property professional that may not have been there 20 years ago. Given the demographics we have today with an aging population, professional growth is not only possible, it’s probable. And, part of our message at BOMA is about those opportunities, whether you want to be in asset management, property management, leasing, or construction project management.”
The enthusiasm to learn is critical, adds BOMA Vice Chairman Purtell, noting that continuing education is available through coursework and real-world experience. “It’s difficult to find good people to staff properties and management teams,” he says, noting that technology, the environment, and tenant relations are presently at the forefront of the industry. “That also requires that professionals have exceptional people skills and multi-tasking abilities,” he says.
Stucky, BOMA secretary/treasurer, points to the true test of today’s - and tomorrow’s - successful professional: “Managing property has become more investment management than simply a real estate operation, requiring far more from professionals in every way in terms of education, experience, and technological creativity. Every situation is unique; you need to have the flexibility to accommodate variations and change every day.
“Get involved, whether that’s in BOMA, in the community, or in the industry as a whole, because that’s part of adapting to change - the networking advantages, the educational opportunities, simply getting out there in the community to make yourself useful. The rewards are too great not to.”
Linda K. Monroe ([email protected]) is editorial director at Buildings magazine.