In a competitive industry, management companies must continuously find ways to retain current clients while honing an edge that makes them appealing to new customers. This is especially true in these tough economic times, as many individuals and communities face financial hardship and must make tough choices about the services they purchase. While economic turmoil and the housing slump have affected many areas of the real estate industry, management has not been hit as hard as some other areas—at least not yet. Companies are rolling with the punches and offering their new and existing clients the same high level of service, plus a few extras as well.
Hanging in There
“[The recession] hasn’t affected [the market] to the degree where the developer gets affected. Housing that is built needs to be managed,” says Stephen Elbaz, president of Esquire Management Corp. in Brooklyn. “It’s not really tied to stock market and housing market, because most new housing in New York replaces old housing.”
But so far at least, the economy has not forced buildings to start bargain hunting for a different management company. In part, because the nature of management deals with existing housing, management companies are not experiencing a lack of business.
“In terms of the housing boom and what we do with community associations, once those units have been filled, they need to be managed,” says Paul A. Santoriello, president of Taylor Management Company in Cedar Knolls, New Jersey. “The slumping economy doesn’t impact us as significantly on an immediate basis because there’s a lot out there to be managed, and our industry is somewhat recession resistant. The market has grown significantly, so our business has grown. But so has the management industry with regard to managers coming into it. They’re coming from two places: new companies being formed to manage community associations, and existing property mangers looking to focus on this marketplace because of its growth.”
While the current economic crisis might not be affecting management companies directly, they sometimes feel the effects indirectly, through their customers. With funds tight for many people, maintenance fees and other bills sometimes become delinquent.