How To Slash Residential Development Costs With Efficient Property Management
As the luxury residential market in Chicago grows ever more competitive, developers must take advantage of the wealth of knowledge professional property management teams can lend to their projects. Currently, there are 44 high-rises under construction in Chicago. This increased demand for new apartments and even new condominium projects, which contracted during the recession, is showing no signs of slowing. The average price of a Chicago condo has ballooned to July 2004 levels. According to Zillow.com, rents are up and housing inventory is down 10.9% from last year.
As a result, project owners are increasingly relying on excellent property management to build smarter and cheaper.
This is where property management firms come in, playing a strategic role in condo development by providing the involved parties with methods for streamlining the process and offering landowners professional solutions that save time and money in the long term.
Consultants prepare pro forma budgets as the basis for determining how profitable the building could be for its investors, as well as projecting first-year operating expenses and checking predicted vs. actual costs, an invaluable asset for marketing teams and developers.
Keeping an experienced property manager on hand not only saves developers time on the front end, but also back-end costs and aggravation by devising specific, accurate operational disclosures.
Property management teams are responsible for crafting a workable, efficient, functional structure for the entire development process—including establishing billing systems, insurance coordination, obtaining and developing contracts for vendor services, and assembling welcome packages and information for tenants and homeowners. The property manager also directs the installation of safety systems, helping protect the building's residents.
Environmental friendliness is always a priority, but initial costs can be far from wallet-friendly. FirstService Residential's in-house director of engineering works closely with FS Energy—an advisory subsidiary of FirstService Residential specializing in energy management—in order to ensure that all managed properties meet the Chicago energy benchmark ordinance. Property management teams can further help building owners save money on energy efficiency by creating a plan for streamlining the developer’s costs from the get-go—and even after project completion.
Providing incentives is a major part of getting environmental buy-in. Most green initiatives carry heftier upfront price tags, leaving condo boards understandably reluctant to maintain them beyond the building’s first year in operation. Property managers equipped with energy-efficiency programs can help developers break down and point out loans, incentives and long-term savings, making energy efficiency more attainable for builders, board members and future clients.
FirstService Residential, for instance, incentivized property managers and building staff this August to search for energy savings opportunities in existing FirstService Residential-managed properties by offering prizes to teams that could find the largest savings in condo and rental building air venting and filtration, piping, thermostatic radiator valves and steam traps.
“We’ve worked closely with lending institutions to develop loan programs that minimize the risk involved in pursuing energy-efficiency upgrades,” says Asa Sherwood, president of FirstService Residential in Illinois. “The level of insight that consultants offer can mean the difference between a green building and a highly inefficient one.”
Property management consultants also help developers comply with legal building requirements, offering pre-construction advice on suitable, feasible amenities for each project. Pre-determining amenities helps to structure marketing strategies and shape future tenants’ quality of life. Having seasoned property management experts take over this due diligence can greatly reduce expenses as the project progresses.
To learn more about Bisnow partner FirstService Residential in Illinois, click here.