Winning Advice for Property Managers
- May 06, 2008
Colorado Springs, Colo.–While property management sometimes seems to be taken for granted, outstanding management performance was recently recognized in the form of several prestigious Multifamily Pillars of the Industry Awards, presented during the National Association of Home Builders (NAHB) conference in Colorado Springs, Colo. attended by apartment and condominium developers. NAHB presents its Pillars awards annually to single out excellence in apartment and condo design, development, marketing and operation. Pinnacle Investment Manager Kevin M. Charcut took home the “Regional Property Manager of the Year” award. Based out of Minneapolis, Charcut manages a Midwest portfolio of nine assets, consisting of 2,868 affordable and market-rate units in Minnesota, Iowa, Nebraska and Kansas, along with a 71-person team for Pinnacle, an American Management Services Company. The 2007 performance of Charcut’s portfolio showed NOI growth of 14.4 percent in markets that otherwise averaged growth of 3 to 4 percent. Plus, average occupancy rates for his portfolio exceeded 96 percent while retention rates increased by more than 21 percent under his leadership.MHN: What advice would you give to other property managers? Charcut: It sounds obvious, but I am always amazed at the impact one person can make, good or bad. Complacency with your people is a recipe for marginal performance or worse. To the contrary, one all-star performer can rally a team to deliver results beyond the team’s nature ability and beyond the owner’s and resident’s expectations. Once you have that person, retain them by understanding their career objectives and then helping them get there. And take chances. Too many consider this industry to be relatively stagnant when if fact it is very dynamic. Be a market leader, embrace and incorporate new technologies that serve your goal of maximizing resident satisfaction and owner returns. Against the advice of some, we recently converted a building to smoke-free housing. At the time, this was one of the largest programs of its kind in the Twin Cities. The site manager executed the program extremely well and it was very well received by the residents. We are now in the process of rolling it out to several other sites within my portfolio.MHN: What has contributed to your success in property management? Charcut: My success can be attributed to my team, my company and my property management roots. I have assembled a true all-star team of professionals that allow me to run our assets more effectively than our competitors and more efficiently than the underwriting. My team refuses to fail, takes an ownership mentality to their respective asset, and understands that the true value of a good idea or program lies not in the idea, but in how it is executed. Pinnacle has done a nice job of creating a culture that empowers people in my position to rapidly respond to issues that impact resident satisfaction and/or owner returns. Pinnacle’s resources and buying power aid in my ability to keep my expense ratio’s extremely low and my overall portfolio returns very high. I would be remiss if I did not attribute a large portion of my success to my days at the Neighborhood Group. My father taught me a long time ago that this is a reputation business and doing things right is not optional, it is the only option. The “character building” responsibilities he assigned to me were far from glamorous, but the lessons learned have served me well over the years.MHN: How do you help your team be the best they can be? Charcut: All of my site managers are very talented, very motivated and very disciplined. I firmly believe that people are best at things they enjoy the most. You have to keep things fun for your team, especially in our industry as it can certainly be taxing at times. Last quarter, I sensed that I had a lot of tired and stressed leaders at my sites. I brought them together for our quarterly team lunch and had them do an activity that was sure to raise an eyebrow as it was very out of character for my management style. I provided each of my site managers with a piece of paper and a box of crayons and asked them to draw their property in a collage style to capture the worst days at their site in 2007. From there, we went around the table to discuss the collages similar to how a therapist would do it, minus the couch. The activity definitely served its purpose to de-stress and to find humor even in the worst days at our sites.MHN: How did you get into property management? Charcut: On some level, I was born into it. My family has been involved in real estate for over three decades and has owned a property management company in Kansas City called The Neighborhood Group for over 20 years. The Neighborhood Group has a total of 3,600 units under management and is based out of Kansas City. You will appreciate when I say that I was not immediately drawn to the property management business my father had me spending the summers of my youth from 11-16 doing all sorts of “character-building” activities at The Neighborhood Group’s properties including picking up trash, painting trash dumpster enclosures in the stifling Kansas City summers, and painting turn units. In retrospect, it was those experiences that taught me lessons in humility and have given me a full appreciation for how critical all of the on-site positions are to creating the type of living environments we want for our residents. I earned a BA in Marketing from Loyola University of Chicago, and joined Pinnacle in January 2004. MHN: What do you most like about property management? Like least? Charcut: I enjoy the challenge of finding a balance between resident satisfaction and owner returns. Third-party resident surveys (IE Kingsley) and the financial statements for my portfolio demonstrate that we are striking a very harmonious balance. Over 90 percent of my portfolio consists of pension fund clients, meaning that the true beneficiaries of our financial success are police officers, teachers, fire fighters and other deserving civil servants. My team and I take great pride in delivering outstanding results for our residents and for our owners. There is very little that I don’t enjoy about property management but I wouldn’t be too disappointed if I never had to work through another major fire, tornado damage or paint another trash dumpster enclosure. MHN: What is your biggest challenge(s) as a property manager? Charcut: My biggest challenge is finding a healthy balance between work and home life. Unfortunately, this is not a business or career path that has all responsibilities end at 6 pm. “Kevin’s commitment to Pinnacle’s mission and the multifamily industry is evident in the quality of the living environment he creates for his residents, in the financial performance he delivers for his owners, and also in the extra time he spends with NAA, IREM and local industry trade groups,” adds Pinnacle Regional Vice President Thomas Backstrom. Pinnacle’s total multifamily portfolio consists of over 160,000 units.