Preparing Staff and Residents for Property Transitions
Sherry W. Freitas, CPM, describes best practices for thoughtfully and seamlessly transitioning a property in just three months.
Changing ownership of properties is routine in the apartment industry. Doing it right is where the challenge comes in.
Failing to do the necessary prep work is a common mistake associated with property transitions, according to Sherry W. Freitas, CPM, managing director of real estate strategic services at Greystar in Atlanta. Having sufficient resources is key, she says, since the more people you enlist to handle tasks, the easier an ownership change will be.
Freitas is joining a panel of multifamily veterans for the session “Transitioning Properties From Due Diligence to Operational Brilliance” at the National Apartment Association's Education Conference & Exposition on June 16, in San Francisco. In a Q&A with Operations Insights, she discussed the challenges property managers face in these types of transactions and shared tips for making a property transition easy and seamless for both staff and residents.
What should property managers have in their arsenal to prepare for a transition?
Have an appropriate takeover team to come in and assist with [the] transition. A lot of times on the first day of a takeover, you are training new staff acquired through the transition and you’re taking their focus off of the day-to-day core business and putting it on training. So you’ve got to have people there to continue to carry out the business.
Make sure you are walking units to understand what you have available to tour prospective residents. If you don’t have market-ready apartments, you can’t lease apartments. Have a detailed checklist to make sure you’re getting everything done that you need to accomplish, such as transitioning contracts, appropriate signage and maybe getting the website up to date.
Be transparent with the new team and tell them what your plans for the property really are. And have staff on hand that can answer resident inquiries. The second that our residents find out there’s been a transition, they come into our office or they call, so we have to make sure that we can respond quickly and be attentive to their needs. Residents are often concerned that their rents are going to go up and want to know about any changes you’re going to make to the new property.
What types of transactions are the most difficult?
The most difficult ones are where the previous owner is not being cooperative. We at Greystar work really hard to make sure that there’s a good relationship between both teams. Whether we’re transitioning a property out of our portfolio to a new owner or vice versa, we want to make sure that we’re being very transparent and helpful.
Sometimes people take it personally—so it’s about taking the personal side out of it and realizing that this is a business transaction. You want to make it as easy as possible for the team, because sometimes that’s the hardest part. If you’re keeping the team, they may feel torn between both sides.
Another difficult transition is when you have a very short lead time. You might find out two days ahead that you’re going forward with the transition. So it’s super important that you have adequate resources for making that transition happen smoothly.
Can you name some best practices managers could follow to accomplish a property transition in just under three months?
During the conference session we’re probably going to talk a little bit about technical needs and making sure that’s in place. We’re going to talk a lot about team members and what we do to help transition team members. We are going to talk a lot about online reputation management and online payments, making sure that those things are up and running, because we know reputation is so important these days. We may talk a little bit about resident surveys and how we celebrate the transitions. From a third-party-management perspective, we’ll talk about adapting to different owner platforms.
Do you have any advice on integrating incoming employees and transferring company culture?
Get to know them and understand the challenges they’ve been through previously. Get them appropriate resources. We at Greystar do a great job of assigning mentors to our transitioning associates—not just to the manager but also to the leasing folks and the maintenance people. All of those people have a mentor—someone to help them answer questions quickly, because they really are expected to get up and running very quickly.
What about relations with the due diligence team, to speed up integration after an acquisition?
At Greystar we use an automated due diligence product to complete our lease audits and units walks. What that enables us to do is take that information very quickly and find the problem areas. From there, we can make an action-item list off of those results, whether it’s the differences in the lease file audits in the rents or maybe there’s some physical issues with the property that you need to get taken care of right away. Those really give us the ability to jump on those tasks quickly. Through that whole due diligence process, we gain a really good understanding of what that property is all about. Then we develop our to-do list of what we want to accomplish, and prioritize it from there.
NAA’s Education Conference & Exposition is taking place June 15-18 in San Francisco. Visit NAA's conference webpage to learn more about this informative session on best practices for transitioning properties.