As the co-op/condo market continues to heal after the setback it experienced during the financial crisis of late, many management firms and independent property managers are looking for ways to distinguish themselves from their colleagues and stand out in an increasingly tough market. The competition to manage some of the world’s priciest buildings is intense.
The chaos created in real estate markets across the country by the economic downturn of 2008 and subsequent slow recovery is still being sorted out in some places. The recession has clearly had a lasting effect on how the real estate business is conducted in the Chicago area. Real estate brokers and other professionals who weren’t previously involved in managing co-ops and condos have entered the co-op/condo property management market. East Coast property management firms have moved into the heartland, too, and some smaller firms have been acquired and absorbed by larger ones.
“Post 9/11, the real estate market was kind of flooded,” says Greg Miner, co-owner of Premier Management Services in Highland Park. “Big companies have gotten bigger, and there are now more, smaller companies in the market as well.”
Some of those firms, including Miner’s specialize in a niche area of the market, serving mid-size co-ops and condos that don’t need a property manager on-site full-time. Miner's company caters to buildings with 40 to 100 units, and currently represents 47 properties. While a couple of those properties require an association manager to be on-site 20 hours per week, Miner says most of the company’s clients find the firm’s mostly off-site strategy to be a good fit. In some ways, the firm is reflective of the evolving market. “I think there probably are more smaller companies trying to do niche work,” Miner says.
Other changes also are affecting how business is done in the market. Until just two years ago, Chicago didn’t require property managers to be certified by the state. As a result, unqualified (and sometimes unethical) companies have done business in this market—shady business, that is. Some buildings suffered from property managers fleecing building funds, or arranging kickbacks and pay-to-play schemes with vendors.