Critical Issues: Hartz Mountain Industries Inc.

Dec. 29, 2004
At Issue:› Tenant Retention› Maintaining a Competitive Portfolio› Life Safety/SecurityAt Secaucus, NJ-based Hartz Mountain Industries Inc., the expertise housed under one roof is extraordinary. This privately held real estate owner/developer – one of the largest in the United States − is staffed to build even the most complex developments quickly and economically, with savvy professionals within the company’s architectural, construction, design, engineering, legal, management, leasing, marketing, and financial departments.Almost all of the facilities in Hartz Mountain’s vast portfolio (200-plus, totaling 35 million square feet and primarily located in the northern New Jersey and New York area) were first designed, then built, and now managed by this in-house organization. Senior Vice President of Property Management Joe Margiotta, who has been a big proponent of the company’s commitment to long-term ownership for 20 years, devotes much of his attention to developing and implementing strategies to keep properties upgraded and competitive. He credits “an enlightened upper management [that] understands and supports this mission” as a catalyst in the continual process, but also points to a simple but effective philosophy: “We are in the customer service business,” he says. “One of the reasons we’ve been successful is that we consider a tenant [to be] a partner in business. We’re always honest, straightforward, and intelligent, and [tenants] trust and respect us for that.”Such responsiveness to tenant-partner concerns is also attributable to communication and interaction within this flexible, agile organization. At Hartz Mountain, the decision-making process involves all key departments, according to Margiotta. “We work with the architects and construction people to determine products for the long-term and to avoid disruption and inconvenience to our tenants,” he explains.Fortunately, Margiotta’s staff of 10 managers and 120 field workers – supplemented by cleaning and HVAC outsourcing professionals – brings longevity as well. “There is very little turnover,” he says about his in-house staff. He encourages them to pursue professional development and continuing education opportunities, and makes communication – “to all levels” – Priority No. 1. He empowers his staff by offering clear-cut parameters, then “letting them run. I encourage them to do things on their own,” explains Margiotta. “I hold two staff meetings a month where we go over not only individual problems in the portfolio, but where we exchange ideas. As a group, we work so well together. I admire and respect these good, hard-working people.”To ensure quality and loyalty among outsourcers, Margiotta has implemented a program called the “Hartz Exclusive” in which specific mechanics work only for Hartz. Supplemented with extra personnel as needed, the program, according to Margiotta, “has saved quite a bit in operating costs. More importantly, they know and understand the buildings. So, it has really worked out well.”With East Coast-based operations, another of the company’s critical issues involves life safety and security for its building occupants. “There remains a heightened sense of security,” says Margiotta, noting however, that today’s climate combines a much more balanced approach of caution, conservatism, and communication than in the days following the events of 9/11. Still, he adds, “It’s been the biggest issue in the industry.”Times have changed, but real estate continues to be a people business. Fortunately, the professionals at Hartz Mountain – whether interacting with one another, their outsourcing colleagues and consultants, or their tenant-partners – have built a firm foundation on which to weather the cyclical nature of the business. Says Margiotta, “I’m very happy about what we have accomplished and very proud of my department. It’s probably the best part of my job today.”Linda K. Monroe, Editorial Director ([email protected])

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