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Security really comes in two packages. In these post-terrorism days, we all think in terms of the larger issue. But in reality, the day-today operation of a building still goes on, and security with a lower-case s–the type that addresses such issues as vandalism or theft–have to be dealt with. But tenants balk at paying for such services deemed to be owner responsibilities, a fact that can squeeze NOI. That’s exactly what roughly 35% of respondents to a new survey conducted by the Chicago-based Institute of Real Estate Management are saying. And, according to 2006 president Fred Prassas–who is also a principal of Lacrosse, WI-based PMC Management Group–that’s not all they’re saying. Read on:

GlobeSt.com: How many people were surveyed? Prassas: We had 486 respondents. Our entire 14,000 members were surveyed, which gives us a 95% confidence level.GlobeSt.com: Who exactly are we talking about here?Prassas: Our membership is almost exactly 50/50 residential and non-residential commercial property managers. Of those who responded, the median size of the properties reported was 234 residential units and about 230,000 sf of commercial.GlobeSt.com: What was the biggest surprise that came out of the survey?Prassas: My biggest surprise was the top security problems–car crime, theft and vandalism. When we think about building security as property managers in the wake of Sept. 11, we tend to think more about controlled access rather than the traditional issues. These are the things that happen on a day-to-day basis, and if the survey was structured properly, which I believe it was, it would elicit those type of things because we asked about security problems, not specifically building-access issues, which could be a whole separate survey.

GlobeSt.com: And tenants want their landlords to foot the bill for the night watchman?Prassas: Absolutely, the survey told us that tenants want to see these things, but they’re not necessarily willing to pay extra for them. In many cases these are becoming expectations of tenants and residents. Of course, the properties that do have these features have a competitive advantage by promoting these features. In reality, in a building that’s working properly, the tenants are paying for almost anything that’s in the building, but to pay it as an extra item tends to be more of an issue for a tenant.

GlobeSt.com: Some 33% of the respondents said NOI has decreased, but 51% said there was no effect. I assume the building’s competitive stance and nature of the local market are reflected here, no?

Prassas: That would be a reasonable speculation.

GlobeSt.com: So I can further assume the 37% that reported an increase in security concerns are in crime-ridden areas?

Prassas: That’s a good question, and I asked myself the same thing. My guess is that those who have reported increases in such concerns may be in areas where security is a bigger issue.

GlobeSt.com: So you’ve uncovered the Catch-22 that those with the greatest need have the NOIs that are most squeezed, correct?

Prassas: Right. That’s fair, but it’s a short-term Catch-22. The market will respond eventually. Commercial properties have longer term leases and it takes longer for some of those things to be reflected in the marketplace.

GlobeSt.com: Do you do the survey every year?

Prassas: No, this is the first time.

GlobeSt.com: Why did it come about?

Prassas: We do some pre-surveys of our members–one-answer type questions–on our website. As with “Is Security an Issue,” when we see an issue bubbling up we start doing some detailed research on it. I expect this will be a survey we’ll do every couple of years.

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