The Long and Short of It Managing to Scale

Every co-op or condo community in New York City has its own personality and character, from the tiny 20-unit brownstone co-ops of the West Village to the towering modern high-rises of the Upper East Side. The wide range of sizes, demographics, expectations, and overall building personalities poses a special challenge to managing agents, whose portfolios might include both a 20-unit prewar and a 200-unit high-rise.

And up to a point, size does matter. A manager in a small, close-knit building may find themselves with four or five unofficial co-managers eager to give advice and oversee the minutiae of day-to-day building business, while an agent for a large, less familiar building may feel they're on their own when it comes to making decisions on the building's behalf.

The Universal Method

There are a host of tasks and factors that make up managing a property - dispute resolution, financial records-keeping, board meeting attendance, mediation and maintenance, just to name a few. As one might imagine, the size of most of these tasks is directly proportional to the size of the property; a high-rise with acres of marble in the lobby and hundreds of residents traipsing in and out will obviously need more lobby maintenance than a brownstone with a stoop and a foyer.

According to Margie Russell, executive director of the New York Association of Realty Managers (NYARM), "The biggest difference between a large building and a small building from a management standpoint is not the day-to-day administrative work - to pay a bill or negotiate an insurance policy is just a matter of the numbers being different - but the relationship between the manager and the employees and the manager and the residents.

Mass Communication

How does building size affect the communication process between board, manager, staff, and residents? There isn't a hard and fast rule, but large or small, it all comes down to the matter of the board and their involvement. According to David Khazzam, vice president of Manhattan-based PRC Management, smaller buildings with active, hands-on boards tend to like to be kept in the loop in every step of every project or issue that arises. Larger buildings, by contrast, tend to have a more of a "rubber-stamp" system, in which most of the legwork is done ahead of time by management, who then submits a bid or proposal to the board for their official okay.

Elections are one other arena in which a 10-unit building is likely to differ somewhat from a 1,000-unit complex. According to Russell, "Election-holding is more tedious in a larger building where you're often dealing with absentee owners - which can be very difficult, because you've got to get the signatures of the proxies to get a forum to hold an election. It's not the home-style, put-the-notice"“under-the-door-and-meet-in-the-basement kind of thing, or something where we can knock on the door at 7 a.m. and get the resident's signature on a proxy."

A building's size also impacts the way residents, management, and other building staff interact and communicate to solve problems and keep the building running smoothly, says Russell. "Just because of the nature of the community, the individual employees in small buildings are more directly involved with the residents and may make more independent decisions than say, a building that has seven lieutenants and 10 or 20 employees reporting to one or more superintendents, who in turn report to the manager."

In smaller buildings, the chain of command is short, and staff members are often empowered to make decisions based on their own judgment. The property manager might call up the building speak directly to the doorman, or the elevator operator might oversee a move-in or move-out because they're the people who have daily interactions with the residents.

"It's a daily interaction issue," says Russell. "And in practice, that's how it's different from a management standpoint."

Finding a Good Fit

In a city the size of New York, management companies come in as many sizes and flavors as buildings do; some are two-agent boutiques with a handful of properties, while others are behemoths with scores of agents and hundreds of buildings.

When a board is searching for a new management company, says Khazzam, it's important to ask a prospective firm whether their portfolio includes buildings close to the size and character of your own. It takes a talented, flexible managing agent to juggle the priorities and personalities at work in any building, but having experience with the concerns and needs of a wide range of building communities will help a management company better serve yours.

According to Greg Carlson, president of Carlson Realty Inc. in Queens and executive director of the Federation of New York Housing Cooperatives and Condominiums (FNYHC), "Each co-op building is like a different human being - each one's needs may be different. Just as with a building, a company's size has little to do with its performance. I've seen it all. There are small ones that do fantastic jobs and large ones that do terrible jobs - and vice versa."

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 Carlson. "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."

Smaller buildings may be wary of working with a larger management company out of fear of getting lost in a sea of other properties, all clamoring for attention.

"The one feeling all co-ops have expressed is, "˜I'm afraid I'll get lost in the shuffle,'" says the board president of an 82-unit building in Queens. When his co-op was interviewing prospective companies about a decade ago, they feared their current management company would be too big. "We wanted to go for personal attention," he says. "At first we thought we'd get lost."

The Queens co-op board ultimately hired a mid-sized company with about a dozen agents and just over 60 properties because they felt the company could "step up to the plate and fight" for the building, says the former president. Still, the co-op gets the attention it wants. "I have a good relationship with my agent," says the president. "I feel I can call him at any moment."

The board president of Montague Terrace Corp., a 21-unit co-op in Brooklyn Heights agrees. According to her, her building "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 three-agent boutique that manages some 1,500 units in about a dozen residential properties. According to Sherri Frankel, president of Caran, "The world is a big place, and a smaller group is more of a personal environment."

But on the flip side, a co-op of any size can be doted on just as much by a large firm, says Larry Vitelli, senior vice president of Douglas Elliman Property Management, a subsidiary of Prudential Douglas Elliman which employs more than 100 agents and manages several hundred co-ops and condos, amounting to some 60,000 units.

"People will say, "˜You're too big - how do we know you'll care about us?'," says Vitelli. "But it's all about the person who's assigned to your building. The manager is essentially the head of a small corporation, and they have to be responsive to the board."

But what about buildings that don't have a property manager? Can larger buildings successfully self-manage? One might assume that only smaller buildings can be self-managed and still thrive, but that may not necessarily be so. Larger complexes, like Chelsea's Penn South - which has 2,820 units - and Schwab House, a 700-unit co-op on Riverside Drive, are entirely self-managed.

The management of a building depends on the involvement of the board members and the volunteer shareholders and unit owners. Oftentimes, in smaller buildings, the board president and other board members will perform various roles. The board president of a 10-unit Brooklyn co-op, for example, serves as treasurer and manages all building finances, while in another small building, another board member might serve a dual role as house manager and super.

Holding the Purse Strings

Self-managed or otherwise, another realm in which both the massive and the miniscule are similar is that of finance. The most important non-material asset for any type of building is the trust of the managed community in their agent and board.

And that, according to Khazzam, is the bedrock upon which all successful building communities - large or small - must be built. "Smaller buildings may require a bit more personal care and maybe even a media treasurer, [a board member who manages the building's important non-financial documentation and paperwork]," says Khazzam, "but the biggest difference between larger and smaller buildings is really just the amount of money you're dealing with."

Smaller buildings have to be particularly careful how they choose to spend their funds, however, according to Leslie Winkler, a manager with Penmark Realty Corporation in Manhattan. With fewer residents, the impact of capital improvements or staffing decisions is felt more keenly and more directly. "If you have four doormen in a 20-unit building," says Winkler, "those same four doormen are obviously going to cost [each resident] more than in a 200-unit building."

In theory, this might seem elementary - with fewer units to share the cost burden of services and amenities, the price-per-shareholder for those amenities goes up - but it is a fact often overlooked when potential residents think about choosing a building to live in, or when self-managed boards make decisions about capital projects or new assessments.

Getting it Done

Smaller and larger boards also differ in how they interact with management, each other, and their shareholder neighbors. Smaller building communities are simply more likely to notice the incidental things that happen around their home. After all, this is what their assessments and monthly fees are for, so if a door is painted in a small building, tenants are more likely to notice, whereas in a huge condo building, these maintenance and general up-keep essentials may go unremarked.

According to Russell, "The only buildings that volunteer their way through management are the small townhouse buildings that have six or eight apartments and are cooperatives in the purest sense - but it depends on how complicated the issues in the building are. If the building is undergoing a lot of construction projects, then you're dealing with administrative details with the city - and a small building may not be equipped to deal with all of the requirements."

In larger buildings made up mostly of busy young professionals, there may be some apathy when it comes to managing day-to-day operations of the building. Unless there is an extra-large assessment or serious maintenance problem, says Winkler, unit owners are likely to go about their daily lives, too busy to notice how their various assessments and monthly fees are being used. In a smaller building, the demographic pool can change drastically. The time and ability to focus on what is going on both materially and financially can be far greater among successful, empty-nest retirees than among young, single, corporate fledglings. It becomes the management company's duty to both pick up the slack and motivate the community, acting as either a liaison or dispute resolution expert.

According to Russell, "I would say the nature of most resident-to-resident disputes is the same in any building - they're almost always noise or odor issues - so the [process of] settling of those disputes is pretty much the same. It is a little more delicate in a smaller building because you want to be a good neighbor, but if the board is set up to have an outreach person who gets involved as a mediator, people tend to deal with it as a peer issue and take care of the problem. In larger buildings, you have more anonymity, so people may be less inclined to be cooperative."

Jim Quinn, former board president of the board of North Shore Towers, a large, 1,844-unit complex in Queens, agrees, and says there's a lot that holds true no matter how many units your community includes: setting goals for the board and the community and prioritizing those goals, for example, or constructing a monthly agenda, naming committees and committee chairs, initiating public meetings, and communicating clearly between board and residents.

"Everyone faces the same problems and pitfalls," says Quinn. "I think you might do all these things a little less formally [in a small building], but you still do them. I don't think it changes if you're 50 units or 500. Every one of these things is something that should be done [regardless of] whether you're large, small, or in-between."

At the End of the Day

So does the size of your building really matter, in terms of management priorities and goals? It does, but not as much as you might suspect. More important than numbers of units or shares are the attitude of the board, the harmonious management of diverse personalities, and smart handling of the operating budget, common spaces, and amenities offered by the building itself.

While it's easy to generalize, at the end of the day, every building is a unique composite of the people who live in it - whether that's 13 people or 1,300 - and it's those personalities that collude to play the largest role in distinguishing between managing small and large properties. When these things fall into place in a consistent, cohesive manner, managing the building really does just become a matter of scale.

David Garry is a freelance writer living in New York City.

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