Mark-Taylor’s experience will likely be a common one this year. With 2011 expected to usher in a healthy increase to apartment deal flow, property management firms are anticipating both risk and opportunity as communities change hands and new ownership entities decide how to best run on-site operations.
Let’s Make a Deal
Whether holding on to management contracts at existing properties, working client relationships to be the first call after an acquisition, or using the due diligence process as an intro to new prospects, property managers can leverage opportunities out of the disposition process.
“The first thing you do is assist your current client through the due diligence process and help them prepare for the sale by pulling together all of the information that the broker is going to need,” says Cindy Clare, president of McLean, Va.-based Kettler Management.
A typical deal prospectus is going to include trailing 12-month rent fundamentals and information on capital improvements and/or deferred maintenance. The good news: Unless you are managing a down-and-out property (and you know who you are), prospective buyers are typically somewhat enamored with your community’s performance from the outset.
“When an investor is buying a building they are often happy with the way it is being managed, and helping your existing client through due diligence is your first opportunity to show the new buyer what a good job you have done as a manager,” Clare says.
