Friday, August 29, 2008 by Turner Hutchens
Nashville Business Journal
Property management, brokerage can be good mix for right firm

For real estate firms pinched by the contracting market, there may be some refuge in providing services for recurring income.

Doug Brandon, managing partner at Colliers Turley Martin and Tucker, says while many of the major real estate firms have taken a big hit in the first half of the year, Colliers has managed to keep a good revenue stream.

He says property management has been a growing part of the Colliers business model in recent years.

"As long as there's property out there to be maintained, it's very predictable, it's very consistent," Brandon says. "It's just a real solid business. It keeps the lights on, as they say."

Colliers is Middle Tennessee's largest property management company and manages about 20 million square feet of space locally, which accounts for about a quarter of its overall revenue, Brandon says.

Michael Taylor, principal with Vision Real Estate, says the brokerage and property management sides of the business are complementary and make for a good balance in a firm - but it's not for everyone.

Taylor says it's to be expected the steady money of property management will appeal to many firms that have seen revenue from transactions dwindle.

"Everybody has put on the property management hat and said 'Now I'm a property manager'" Taylor says. "But it doesn't necessarily qualify them to do the work."

Vision works exclusively in retail commercial space, managing and leasing for close to 50 shopping centers. In 2007 the company managed 5.7 million square feet of space locally.

Lynn Sugg, vice president of property management for Colliers in Nashville, says open communication within a single company helps better serve the tenants.

"It's just a lot of sharing of information, and a lot of extra eyes on the property," she says.

Sugg says brokers have relationships with tenants and let the property management team know of issues with a building. Conversely, property managers will often be able to give the brokers a heads-up when tenants are looking to lease new space.

Having a single firm to deal with is also very appealing for some clients, especially ones from out-of-town who don't want to deal with multiple parties, Sugg says.

"The expertise that we have in property management, can help in the transaction business," says Rick Helton, managing director of ProVenture which in 2007 managed close to 3 million square feet of property.

Helton says having the property management team help evaluate the expense of projects - whether they involve a new building upkeep for an existing one - can really help keep the brokerage side of the business on firm financial footing.

Taylor says property management is very hands-on, and requires its own expertise.

"I think it's hard to jump in the property management business, if it's not something you do every day," he says.

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