Systemized Approach Realty Management brings a tremendous level of detail to the table because it works so closely with Ross Development and RR Rehab and Construction, another affiliate company owned by Scott Ross and his partner John Rutt. RR Rehab does large-scale capital improvements, not apartment turnovers. Though independently owned, Ross Development and RR Rehab work only with Realty Management.
For owners considering hiring Realty Management, the rehab company’s services are offered as an option. “Owners see the benefit of having all of the expertise and integration that we offer. [It makes more sense] than hiring a general contractor to come in and do the work,” explains Ross.
“I won’t do a deal unless [Realty Management] is involved,” says Scott Ross. “Our ownership success for ourselves and the third parties is based on how we manage, how we control cost, and how we implement rehabs. I won’t do the deal where someone comes in and says it has to be another property management company.”
While Scott Ross doesn’t own or work for the property management business, he can provide the owner’s perspective on third-party management deals when the real owner is not actively involved. “I don’t manage the administrative staff, and I never tell on-site people what to do,” he says. “I’m an owner, and I review good and bad things with the regional managers.” Ross Development owns about half of the 13,000 units Realty Management manages.
Proven Performance Ross’ husband isn’t the only one impressed with her management services. Realty Management has worked with The Artery Group LLC since 2000, managing 2,500 affordable units for the company.
“They can get their arms around an asset no matter how unique or challenging it is,” says Brain Grant, vice president of asset management for The Artery Group, a real estate company based in Bethesda. Forest Creek Apartments, a 930-unit community in Prince Georges County, Md., is a case in point. Before hiring Realty Management, the property had a tremendous delinquency problem, with maintenance and training issues to boot.
Realty Management reduced the delinquencies by 80 percent and came up with a systemized approach to turn the project around, says Scott Price, COO of The Artery Group. Instead of using third-party companies to handle maintenance issues, Realty Management hired a maintenance staff and began fixing and assessing problems on a global basis.
The company aggressively collected rent and implemented a more effective screening process for residents. “I had a feeling that someone was knocking on doors,” says Grant. “They wouldn’t let them stay and not pay.”
“Beth told me that things would get worse before they got better. But [she said] when they were finished they would have residents that paid and could afford to pay the rent,” says Hank Goldberg, chairman of the company. “There were no surprises to us, and they were honest.” Now, the community averages 95 percent occupancy.
While Realty Management is good with challenging assets, it also has been successful at updating under-managed assets and leasing up new properties, explains Grant.
For instance, at one community owned by UBS Realty Investors LLC, a real estate investment advisor based in Hartford, Conn., Realty Management implemented several capital improvement projects that saved the owner money, says Robert Wilkins, director of asset management for UBS.
New showerheads and toilets, for instance, immediately reduced water bills. Insulation in the attic and new windows and sliding glass doors reduced utilities even further. At the same time, Realty Management aggressively raised rents to pay for the improvements, says Wilkins.