Peculiar as it may sound, the union of a building and management company can be likened to a marriage: the mate that suits you best might be incompatible with your friend. Likewise, a management company that works well for one building might not work for another. "Each co-op building is like a different human being," says Greg Carlson, president of Carlson Realty Inc., a co-op management and consulting firm in Queens. "Each one’s needs may be different."
According to Carlson, who is also president of the Federation of New York Housing Cooperatives in Queens, the proper match arises when a management company’s abilities meet a building’s needs. "Each management company has its strengths and weaknesses." A company’s size has little to do with its performance, he adds. "I’ve seen it all. There are small ones that do fantastic jobs and small ones that do terrible jobs–the same goes for the larger ones." So where should a building start? Should the management company’s size even be a factor? Is there anything typical of a large firm versus a small one? While there aren’t any definitve answers, a careful and thorough search will lead your building in the proper direction.
The Personal Touch
Of paramount importance to every building is reliability; knowing it can count on the firm it has hired. "The one feeling all co-ops have expressed is, ‘I’m afraid I’ll get lost in the shuffle,’" says Philip Carrubba, board president of Allendale Apartments, an 82-unit building in Queens. When his co-op was interviewing prospective companies in 1994, they feared their current management, the Argo Corporation, would be too big. "We wanted to go for personal attention," Carrubba recalls. "At first we thought we’d get lost."
Considered a mid-size company in the industry, Argo has 12 agents and handles 62 co-ops and 6,200 units. The Allendale board ultimately hired Argo because they felt the company could "step up to the plate and fight" for the building, says Carrubba. Still, Allendale gets the attention it wants. "I have a good relationship with my agent," Carrubba says. "I feel I can call him at any moment."
On the other hand, Lee Scott, the board president of the 21-unit co-op Montague Terrace Corp. in Brooklyn Heights disagrees. She states, "We definitely would never choose some huge company because I don’t think they’d pay attention to us." Montague is a client of Caran Property Management, a two-agent boutique that manages 1,000 units in six residential properties. Says Sherri Frankel, president of Caran, "The world is a big place and a smaller group is more of a personal environment."
But a co-op can be doted on just as much by a large firm, claims Larry Vitelli, senior vice president of Insignia Residential Group, which employs 75 agents and manages 350 co-ops and condos, amounting to 60,000 units. "People will say, ‘You’re too big, how do we know you’ll care about us?’," he relates. "But it’s all about the person who’s assigned to your building. [It’s like] they are the head of a small corporation and have to be responsive to the board." Every Insignia agent has a direct phone line, which he or she answers personally. Callers "shouldn’t get voice mail," Vitelli assures.
Expertise and Resources
Generally, larger firms have more resources and experience. "There tend to be more experts on the staff," says Carlson. A bigger group of agents suggests more diversity and opportunity to learn from colleagues.
"For any problem we’ve had, I can’t think of a situation that [Insignia] never had with 10 other properties," says Larry Kinitski, who has been board president of Windsor Park, an 1,850-unit co-op in Queens, for 13 years. "We’ve always gone with a large management company because running a co-op has become more than a housing issue. A large company has more breadth. We can buy, so to speak, the accounting and legal [services] and so on, all from the same company." Insignia has in-house counsel, 14 accountants, and compliance and environmental experts. "Sooner or later, there’s a complicated issue that takes a lot of resources or expertise," says Vitelli.
Large firms are also touted for saving buildings money on oil, insurance and supplies through volume discounts. But smaller firms can still get bulk prices, says Frankel. "I’ve gotten incredible service from suppliers and can buy and get delivery just as quickly as anyone else," she asserts. "I can retain the same engineers, architects, attorneys. If you’re out there and involved, you can get whatever you want."
Scott affirms the quality of service provided by Caran. She says regardless of the size of the project, Caran can get them a contractor who will "do the work promptly and do a first-class job."
The Mid-size Mix
Thomas White’s 72-unit co-op on the Upper East Side had been with management companies of all sizes before he became board president three years ago. When the board began shopping for a new firm after he stepped in, they viewed size as a crucial factor, hoping to find a firm small enough to allow access to top management, yet big enough to maintain smooth operations.
"Even though we interviewed some very good small firms, we didn’t feel they had the depth there," says White. "We felt we’d be at risk if someone left." The building decided to hire mid-sized Argo. While White agrees a good agent-board relationship is crucial, his co-op wanted to be important to a company as a whole, which they believed was more likely with a small or mid-size firm.
There are large firms that manage small buildings and small firms that manage large buildings. While the size of many co-ops tends to correspond to the size of the firms they hire, there isn’t necessarily a direct correlation, and most firms claim they cater to both big and small clients. "It really depends on the personality of the building," says Jeffrey Levy, vice president of Argo. "Certain larger buildings prefer to have a boutique firm because they’ll get more attention; others might like a brand name. Smaller buildings might be better served by a smaller, mid-sized company."
Kinistsky says the huge size of his complex in Queens had little impact on the board’s decision to hire Insignia. "We have the same problems as a 200-person building–it’s just on a larger magnitude. It’s more that boards are often held accountable, and I’d want to ensure there’s a big company there to protect us." At the smaller end, Scott says her 21-unit building’s decision to employ Caran would have been no different were they bigger.
Big or small, don’t neglect to get references and make visits to the management companies. You’ll want to survey their back offices and interview the agent with whom you’ll work. "It’s amazing how few people check the back office before they choose a management company; the people in the support group need to be just as good as the guy on the front line," stresses Levy. Check the accounting department and see how well files are kept: are board meeting minutes, capital improvement records and personnel records in place?
"Be aware that fees for large and small firms should be comparable," says Carlson. If a firm’s fees are exceptionally low, they’ll probably give poor service. "Particularly if you have a small company and they want to grow, they might undercut [rates]," he explains. If a slew of clients signs on at a low rate, the property manager will end up overworked. Furthermore, "if a fee is higher, the firm will be able to afford more qualified help to properly manage a building," he notes.
You may want to see if the firm is involved in areas outside of property management. Are their interests too widespread? On the other hand, does the diversity help you? Since Frankel is also involved in asset management, she does a tremendous amount of financing for her buildings. Does the firm own and manage its own property? Argo does, which impressed White’s board. "If they could use the same systems to manage us as they do to manage their own property, we figured that was pretty good endorsement," he says.
Ultimately, a match will arise when a management company can meet your building’s specific needs; look at a firm’s size insofar as it impacts those needs. Size isn’t necessarily a guarantee for anything, so look at firms for their individual merits and be sure to do a proper search.
Ms. Malek is a freelance writer living in Manhattan.