Speed Game Speed is a tremendous tool to have in baseball. A fast runner can change the complexion of a game with his ability to steal bases.
Speed can also help Sterling change the complexion of a property. The company buys properties with the intention of a fast physical and financial transformation. “We look to turn around these properties as quickly as possible because we are selling in five to seven years,” Wilpon says.
For instance, the company is now working with BH Management in Dallas to upgrade the business center, pool, landscape, patio fencing, and interior units in a Florida property. “We’re transforming the property from a physical standpoint and lifestyle standpoint,” says Harry Bookey, CEO of BH Management. “That’s something that we’ve both agreed is the way to maximize the value on some of these assets.”
When Sterling looks at B- and C-class properties, it usually zeros in on those in need of management or physical rehab. “We look for local investors without capital sources,” Patolia says. “The market improves, and often times, the owner doesn’t have the resources to improve because of a limited partner structure.”
Team Spirit While each of the five traits–power, consistency, speed, agility, and accuracy–help a baseball player, he can’t truly reach his potential without great teammates. The same is true for Sterling.
Each of the Sterling’s properties is a study in teamwork, regardless of whether the company manages the actual property. Sterling works with joint venture partners to meet resident needs, often taking a more in-depth look at operations than many owners would. Even in properties it doesn’t manage, Sterling will go through budgets by line item for each property. “If you are a managing agent who doesn’t like an active presence on the part of your client, the relationship might not be for you,” Harris says. “But it sure works for us.”
Harris’ best example of this process: the 169-unit Ruskin Apartments in Kansas City, Mo. NAI Cohen/Esrey, which has managed the property for Sterling for years, is used to lengthy budget processes with the New York-based company. “We must produce our justification of the various income and expense items,” Harris says. “It’s not enough to say that last year we spent $22,000 on mowing the grass. Sterling expects to know how many times each month we expect to mow the property and how much it costs per mowing. It’s not enough to say that last year we spent $10,000 replacing appliances. Sterling expects to know exactly what type of appliances we plan to replace, how much each appliance costs, and which units are slated for replacement.”
Obviously, property management is not just left to property managers at Sterling Equities. At Sterling-run properties and jointly owned properties, each member of the team takes a role. Acquisition managers, for instance, have a large say in property operations. The acquisition people meet weekly with management to review what’s happening at a property, and they meet monthly to review budgets against the original model.
Although it’s easy to see how this kind of interaction could cause some friction between people, this doesn’t seem to happen at Sterling. The camaraderie between the partners seems to have spread throughout the organization. “If you’re not a team player, you’re not going to last here,” Wilpon says. “Whether it’s real estate or baseball, big egos won’t last here.”
