Co-op and condo communities come in all shapes, sizes, and configurations. They range from three-unit, wood-frame houses to high-rise apartment buildings containing hundreds of units, to sprawling townhouse communities in park-like settings. Like these communities, firms specializing in their management and operation can be large or small, generalist or boutique. The question for boards, shareholders, and owners is, what type of firm is right for you and your community?
Big vs. Small, General vs. Boutique
There are management firms that employ literally thousands of professionals in all sorts of specializations, and small firms that employ just a handful of specialists. Size does not dictate approach, however. Some firms are more geared for the efficient and effective execution of basic, daily management tasks—let’s call them generalists—and some take a more tailored approach to provide each client with exactly the experience they are seeking. This dichotomy between generalists and boutique firms has much more to do with a company’s professional approach than with how many people it employs.
“Large firms offer more redundancy in terms of both services and personnel,” says Stephen DiNocco, owner of Affinity Realty and Property Management, based in Boston. “Some clients view this as more availability, in that there’s always someone there to cover their property’s needs. That’s not to say that smaller, more specialized companies can’t do that, too, but in general, larger firms have a larger client base, so it makes sense to offer more services. They may have an accounting arm, an insurance arm, etc. In some markets, they can also offer a slightly better pricing structure.” However, he adds that bigger companies are often more bureaucratic and less flexible. DiNocco says that “clients also may be obligated to engage with the ancillary services the management firm provides. You will get ‘sold’ on their in-house service providers, and may feel you have to use them for those services.”
Though usually smaller in terms of overall staff than big generalist management firms, ‘boutique’ doesn’t mean a company with less ability or experience. “Boutique firm managers will find what the client needs,” says David Goldoff, president of Camelot Realty Group, a New York City-based management firm. “If necessary, boutique firms will go out and hire someone to fill a specific need for a client. A big company might have someone like that already, but access is typically limited.” After all, with a huge portfolio of clients to cover, that in-house person may be handling problems at numerous properties. “So size is not the issue,” says Goldoff. “Expertise is, and that applies to any management firm of any size. It’s really more about access and attention to individual client needs.”
Andrew Marks has seen both sides of this quandary. He is senior vice president of new business and marketing for New York-based management firm Maxwell-Kates and was president of his Manhattan co-op for seven years. (Maxwell-Kates is a subsidiary of Associa Community Management Corp, located in Fairfield, New Jersey.) According to Marks, “Large firms offer the potential for greater resources and bulk purchasing options to be accessed for the benefit of managed property, board, and community. Larger scale also means more stability and staying power in the event of a downturn, as we’ve seen with COVID.