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Many people own real estate in the form of a home, but, to businesses and investors, commercial real estate is a source of income and profits rather than simply a place for shelter. For them, real estate-including land and structures such as office buildings, shopping centers, and apartment complexes-is a valuable asset that can produce income and appreciate in value over time if well managed. Real estate can be a source of income when it is leased to others, and a substantial business expense when it is leased from others. For this reason, property and real estate managers perform an important function in increasing and maintaining the value of real estate investments for investors. Property managers oversee the performance of income-producing commercial and residential properties and manage the communal property and services of condominium and community associations. Real estate managers, also called real estate asset managers, plan and direct the purchase, development, and disposition of real estate for businesses and are usually employed by a sole owner, large corporation, bank, pension fund, or investment group. These managers are becoming increasingly involved in long-term strategic financial planning rather than the day-to-day operations of the property.
Most property and real estate managers work in the field of property management. When owners of apartments, office buildings, or retail and industrial properties lack the time or expertise to assume the day-to-day management of their real estate investments, they often hire a property manager, or contract for services with a real estate management company. Most property managers handle several properties simultaneously. Property managers act as the owners' agent and adviser for the property. They market vacant space to prospective tenants, through the use of a leasing agent, advertising, or by other means, and establish rental rates in accordance with prevailing local conditions. They negotiate and prepare lease or rental agreements with tenants and collect their rent payments and other fees. Property managers also handle the financial operations of the property. They see to it that rents are received and make sure that mortgages, taxes, insurance premiums, payroll, and maintenance bills are paid on time. They also supervise the preparation of financial statements and periodically report to the owners on the status of the property, occupancy rates, dates of lease expirations, and other matters.
Property managers negotiate contracts for janitorial, security, groundskeeping, trash removal, and other services. When contracts are awarded competitively, managers must solicit bids from several contractors and recommend to the owners which bid to accept. They monitor the performance of the contractors, and investigate and resolve complaints from residents and tenants. Managers also purchase all supplies and equipment needed for the property, and make arrangements with specialists for any repairs that cannot be handled by the regular property maintenance staff.
Property managers hire and direct the maintenance and on-site management personnel. At smaller properties, the property manager might employ only a building engineer who maintains the building's heating, ventilation, and air-conditioning systems and performs other routine maintenance and repair. Larger properties require a sizable maintenance staff supervised by a full-time on-site manager, who works under the direction of the property manager. Building managers have similar duties and responsibilities to property managers, except they are responsible for one site only.
Although some on-site managers oversee large office buildings or shopping centers, most manage apartments. They train, supervise, and assign duties to the maintenance staff as well as routinely inspect the grounds, facilities, and equipment to determine what repairs are needed. Occasionally, outside contractors are required, and the on-site manager may obtain bids for the work and submit them to the property manager. On-site managers schedule routine servicing of the heating, ventilation, and air-conditioning systems and ensure that the work of the maintenance staff and contract workers is up to standards or contract specifications. They keep records of expenditures incurred for operating the property and submit regular expense reports to the property manager or owners. They may recruit maintenance staff, interview job applicants, and make hiring recommendations to the property manager.
Property and on-site managers employed by condominium and homeowner associations-known as community association managers-must be particularly adept at dealing with people. Instead of tenants, they must deal on a daily basis with homeowners-members of the community association that employs the manager. Hired by the volunteer board of directors of the association, the community association manager administers its daily affairs and oversees the maintenance of property and facilities that the homeowners own and use jointly through the association. Smaller community associations usually cannot afford professional management, but managers of larger condominiums have many of the same responsibilities as the managers of large apartment complexes. Some homeowner associations encompass thousands of homes, and, in addition to administering the associations' financial records and budget, their managers may be responsible for the operation of community pools, golf courses, community centers, and the maintenance of landscaping, parking areas, and streets.
Tenant relations (in commercial properties) and resident relations (in residential properties) are an important part of the work of on-site managers, particularly apartment, condominium, and community association managers. On-site managers are responsible for enforcing rules and lease restrictions, such as pet restrictions or use of parking areas. Apartment and building managers handle requests for service or repairs and try to resolve complaints. They show vacant apartments or office space to prospective residents and explain the occupancy terms. Property managers must understand the provisions of legislation, such as the Americans With Disabilities Act and the Federal Fair Housing Amendment Act, and local fair housing laws to be sure they are not being discriminatory in the renting or advertising of apartments.
Some real estate managers are employed by businesses to locate, acquire, and develop real estate needed for their operations and to dispose of property no longer suited to their uses. These managers, sometimes referred to as corporate real estate managers, locate desirable sites for factories, retail stores, hotels and motels, and other business ventures and arrange to purchase or lease the property. They select a site based on their assessment of considerations such as property values, zoning, population growth, and traffic volume and patterns. They negotiate contracts for the purchase or lease of the property, securing the most beneficial terms for their company. Corporate real estate managers periodically review their company's real estate holdings, identifying properties that are no longer commercially attractive. They negotiate the sale or termination of the lease of properties selected for disposal.
Real estate managers who work for land development companies acquire land and plan the construction of shopping centers, houses and apartments, office buildings, or industrial parks. They negotiate with representatives of local government, other businesses, community and public interest groups, and public utilities to eliminate obstacles to the development of the land and to gain support for the planned project. It sometimes takes years to win approval for a project, and in the process managers may have to modify the plans for the project many times. Once they are free to proceed with a project, managers negotiate short-term loans to finance the construction of the project, and later negotiate long-term permanent mortgage loans. They then contract with architectural firms to draw up detailed plans, and with construction companies to build the project.
Most property and real estate managers work in clean, modern, well-lighted offices, but many spend a major portion of their time away from their desks. Property managers frequently visit the properties they oversee, sometimes on a daily basis when contractors are doing major repair or renovation work. On- site managers may spend a large portion of their workday away from their office visiting the building engineer in the boiler room, checking up on the janitorial and maintenance staff, or investigating a problem reported by a tenant. Many real estate managers spend the majority of their time away from home, traveling to company real estate holdings or searching for properties that might be acquired.
Property managers often must attend meetings in the evening with property owners, community association boards of directors, or civic groups. Not surprisingly, many property and real estate managers put in long work weeks. Some apartment managers are required to live in the apartment complexes where they work so that they are available to handle any emergency that occurs while they are off duty. They usually receive compensatory time off, however, for working at night or on weekends. Many apartment managers receive time off during the week so that they are available on weekends to show apartments to prospective residents.
Property and real estate managers held about 261,000 jobs in 1994. Most worked for real estate operators and lessors or for property management firms. Others worked for real estate development companies, banks, government agencies that manage public buildings, and corporations with extensive holdings of commercial properties. Many were self-employed developers, apartment owner-managers, or owners of property management or full-service real estate firms that manage as well as sell real estate for clients.
Most employers prefer to hire college graduates for property and real estate management positions. Degrees in business administration, finance, real estate, public administration, or related fields are preferred, but persons with degrees in the liberal arts are often accepted. Good speaking, writing, and financial skills, as well as an ability to deal tactfully with people, are essential. Most persons enter property and real estate management as on-site apartment or community association managers, or as assistants to property managers. Previous employment as a real estate agent may be an asset to apartment managers because it provides experience useful in showing apartments and dealing with people, as well as an understanding that an attractive, well- maintained property can command higher rental rates and result in lower turnover among residents. In the past, many persons with backgrounds in building maintenance have advanced to apartment manager positions on the strength of their knowledge of building mechanical systems, but this is becoming uncommon as employers are placing greater emphasis on administrative, financial, and communication abilities for managerial jobs.
On-site managers usually begin at smaller apartment complexes, condominiums, or community associations, or as an assistant manager at a large property or management company. As they acquire experience working under the direction of a property manager, they may advance to positions with greater responsibility at larger properties. Persons who excel as on-site managers often transfer to assistant property manager positions where they can acquire experience handling a broader range of property management responsibilities.
Although most persons who enter jobs as assistant property managers do so on the strength of on-site management experience, employers are increasingly hiring inexperienced college graduates with bachelor's or master's degrees in business administration, finance, or real estate for these jobs. Assistants work closely with a property manager and acquire experience performing a variety of management tasks, such as preparing the budget, analyzing insurance coverage and risk options, marketing the property to prospective tenants, and collecting overdue rent payments. In time, many assistants advance to property manager positions.
The responsibilities and compensation of property managers increase as they manage larger properties. Most property managers are responsible for several properties at a time, and as their careers advance they are gradually entrusted with properties that are larger or whose management is more complex. Many specialize in the management of one type of property, such as apartments, office buildings, condominiums, cooperatives, homeowner associations, or retail properties. Managers who excel at marketing properties to tenants may specialize in managing new properties, while those who are particularly knowledgeable about buildings and their mechanical systems might specialize in the management of older properties that require renovation or more frequent repairs. Some experienced property and real estate managers open their own property or real estate management firms.
Persons most commonly enter real estate manager jobs by transferring from positions as property managers or real estate brokers. Real estate managers must be good negotiators, adept at persuading and handling people, and good at analyzing data to assess the fair market value of property or its development potential. Resourcefulness and creativity in arranging financing are essential for managers who specialize in land development. Real estate managers may be required to hold a real estate broker's license.
Many property and real estate managers attend short-term formal training programs conducted by various professional and trade associations active in the real estate field. Employers send managers to these programs to improve their management skills and expand their knowledge of specialized subjects, such as the operation and maintenance of building mechanical systems, enhancing property values, insurance and risk management, personnel management, business and real estate law, resident/tenant relations, communications, and accounting and financial concepts. Managers also participate in these programs to prepare themselves for positions of greater responsibility in property and real estate management. Completion of these programs, together with meeting job experience standards and achieving a satisfactory score on a written examination, leads to certification, or the formal award of a professional designation, by the sponsoring association. In addition to these qualifications, some associations require their members to adhere to a specific code of ethics.
Managers of public housing subsidized by the Federal Government are required to be certified, but many property and real estate managers who work with all kinds of property choose to earn a professional designation voluntarily because it represents formal industry recognition of their achievements and status in the occupation. A number of organizations offer such programs. The Institute of Real Estate Management awards the designations Accredited Residential Manager and Certified Property Manager, while the National Association of Home Builders awards the designation Registered Apartment Manager. The National Apartment Association confers the designations Certified Apartment Manager and Certified Apartment Property Supervisor. The Community Associations Institute bestows the designation Professional Community Association Manager and Association Management Specialist, while the Building Owners and Managers Institute International awards the designations Real Property Administrator and Facilities Management Administrator.
Employment of property and real estate managers is projected to increase about as fast as the average for all occupations through the year 2005. In addition to rising demand for these workers, many job openings are expected to occur as property managers transfer to other occupations or leave the labor force. Opportunities should be best for persons with college degrees in business administration and related fields, as well as those who attain professional designations.
Growth in the demand for office buildings and retail establishments will spur employment of property and real estate managers. The projected expansion in wholesale and retail trade; finance, insurance, and real estate; and services industries is expected to require growth in the Nation's supply of office and retail space. Some additional growth will come from adding on to existing buildings. However, growth will be tempered by downsizing and consolidation, as well as by the leftover office space created during the building boom of the 1980s. Although some of these additions will be handled by the property manager already on the site, other additions will require the hiring of additional property managers. More complex responsibilities combined with larger facilities may lead to the hiring of more property managers per building.
In addition, the expected faster than average employment growth in some retail trade industries should require greater numbers of real estate managers to acquire and develop properties for expanding restaurant, food, apparel, and specialized merchandise chains.
Growth in the Nation's stock of apartments and houses also should require more property and real estate managers. Although the rate of new household formation is expected to slow somewhat over the 1994-2005 period, the high cost of purchasing a home is expected to force an increasing proportion of individuals to delay leaving rental housing. In addition, developments of new homes are increasingly being organized with community or homeowner associations that provide community services and oversee jointly owned common areas, requiring professional management. To help properties become more profitable, more commercial and multi-unit residential property owners are expected to place their investments in the hands of professional managers.
Growth in demand should also arise as a result of the changing demographic composition of the population. The number of older people will increase during the projection period, creating a need for various types of suitable housing, such as assisted living arrangements and retirement communities. Accordingly, there will be a need for property managers to operate these facilities, especially those who have a background in the operation and administrative aspects of running a health unit.
Median earnings of all property and real estate managers were $22,600 a year in 1994. The middle 50 percent earned between $15,300 and $35,100. Ten percent earned less than $10,200 and 10 percent earned more than $52,500 annually.
Community association managers received compensation comparable to on-site and property managers employed by other types of properties. Many resident apartment managers receive the use of an apartment as part of their compensation package. Property and real estate managers often are given the use of a company automobile, and managers employed in land development often receive a small percentage of ownership in projects that they develop.
Property and real estate managers plan, organize, staff, and manage the real estate operations of businesses. Workers who perform similar functions in other fields include restaurant and food service managers, hotel and resort managers and assistants, health services managers, education administrators, and city managers.
General information about careers in property and real estate management and programs leading to the award of a professional designation in the field is available from:
Building Owners and Managers Association International, 1201 New York Ave. NW., Suite 300, Washington, DC 20005.
Building Owners and Managers Institute International, 1521 Ritchie Hwy., Arnold, MD 21012.
Community Associations Institute, 1630 Duke St., Alexandria, VA 22314.
Institute of Real Estate Management, 430 N. Michigan Ave., Chicago, IL 60611.
National Apartment Association, 1111 14th St. NW., Suite 900, Washington, DC 20005.
National Association of Home Builders, 1201 15th St. NW., Washington, DC 20005. International Association of Corporate Real Estate Executives, 440 Columbia Dr., Suite 100, West Palm Beach, FL 33409.
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