2017 was all about milestones. Not only did Levin Management Corporation (LMC) celebrate 65 years of industry leadership, but we broke previous new business records with the addition of 10 new assignments – totaling 1.5 million square feet YTD. This achievement increased our diversified leasing and management portfolio to 100 properties, totaling 14 million square feet.
There’s a strong appetite for third-party commercial retail real estate services right now. Are we seeing a retail real estate trend in the making? That’s hard to say from my perspective, but the evolving retail landscape, increased competition for fewer retailers and growing transactional complexity are bringing more private owners and institutional investors to our doors. These companies are looking to maximize property performance and value by outsourcing to experts like LMC. I find they’re drawn to us, in particular, because we offer a complete package (from retail leasing and management to construction management, and everything an owner needs to effectively run their properties). You might call us a specialized firm in that we customize our approach to the client and their property – and we stress high-quality service.
What’s Behind LMC’s Record-Breaking Anniversary Year?
LMC is attracting new business for a number of reasons. At the top of the list are:
• Longevity – 65 years of industry leadership
• Expertise – leadership with long-time industry and company affiliations
• Market knowledge and connections
• Scope of services – we’re a one-stop shop
• Individualized service model
• Reputation for excellence and integrity
The Big Decisions: Why Turn to a Third-Party Solution? Why Switch Providers?
For institutional investors, the decision to go with a third-party service provider is simple. They are asset managers who always hire third party management and leasing firms, and they make their selections based mostly on past experience and the level of service provided. On the other hand, private owners that are currently doing management in house are turning to third-party managers to help address a number of concerns in today’s challenging retail environment. The most common issues are:
• Rising vacancies
• Increasing competition from other centers
• Insufficient recovery of billable expenses
• Need for better control of CAM costs
• Keeping pace with an increasingly digital world, and opportunities to leverage technology in property marketing
• The burdens of day-to-day property management, such as emergency response to tenants
• The need for institutional-level financial reporting to other investors or lenders
The more issues they are experiencing, the more they realize their most efficient solution is a single expert resource – like LMC – that can address every challenge. Like institutional investors, many private owners no longer want to handle operations. This is especially true in our increasingly complex environment. Many private owners are also facing a generational shift. Younger family members are assuming leadership and often want to shed the responsibilities of in-house management entirely.
Switching third-party providers is another story. I find that neither private firms nor institutional investors want to get lost in a large national management provider portfolio. Major brand-name property management firms with huge client rosters and global reach seem to be attractive initially, but they often fall short in delivering individualized attention. These big players also tend to lack smaller market expertise, a factor critical in today’s environment. Being well-connected locally means a better sense of the market, which creates a clear advantage when it comes to property strategy.
LMC delivers that competitive advantage plus economies of scale in purchasing services and has strong connections to the best professionals, such as tax appeal attorneys, architects, engineers, insurance consultants, and environmental experts. Still, many owners are wary of changes that may interrupt property operation. LMC has decades of experience smoothly onboarding new properties and ensuring seamless transitions. This has been another factor in our successfully securing new assignments this year.
Anticipating Another Year of Milestones in 2018
LMC is looking to 2018 for another year of growth. We’re reaching out to institutional investors and private owners of retail centers, especially in our Northeast region. Our 65-plus years of experience can make a major difference for retail real estate owners eager to invest their energies in building value not managing property.