Partnership Targets Distressed Multifamily Properties
- Feb 10, 2010
Dees Stribling, Contributing Editor
Atlanta–Strategic Management Partners (SMP) has joined forces with GFI Capital Resources Group Inc., a New York-based real estate and insurance service provider, to offer multifamily property management services to owners of underperforming and distressed apartment communities. The affiliation gives GFI the ability to offer third-party management services separately from its own portfolio. Potential clients, according to the company, include equity owners as well as special servicers such as banks and other financial institutions.
GFI has a national portfolio of 100 multifamily properties consisting of about 21,000 units. The new partnership allows Atlanta-based SMP to leverage GFI’s buying power and access a multitude of specialized resources and professionals. SMP will, however, operate independently of GFI’s portfolio, offering its services to third-party clients.
SMP is a third-party management firm that already provides property management and turnaround services, including receiverships, foreclosures, lease-up, asset repositioning, renovation and due diligence services. According to SMP, the new partnership will be poised to take advantage of the fact that there’s roughly $17 billion in distressed assets in the U.S. multifamily sector, and not all of the owners have the expertise to deal with managing such properties.
“For example, most assets today are experiencing inflated delinquencies, and so normal collection practices most likely won’t be effective,” Angela Smith, senior executive with SMP, tells MHN. “The entire thought process of today’s property management has to shift from cookie-cutter policies and procedures to individual asset management.”
In other words, many distressed properties will need specialized strategies just to survive as income-producing entities in the current economy. “Everyone is looking for ways to reduce expenses,” Cynthia Batey, senior executive with SMP, tells Multi-Housing News. “But distressed properties must be able to face the daily challenge of creating innovative programs that will maximize performance at minimal cost.”
They also will struggle to keep good property managers and other personnel, adds Batey. “Distressed properties must also be creative to retain the highest quality employees despite adverse circumstances,” she says. “Only companies with the experience and best practices to bring to that challenging task will be successful.”