Real Estate Transparency: Property Management's Turn

NEW YORK CITY-The push for greater transparency in the real estate sector is finally making its way to the property management level. For investors and asset managers, understanding who is managing their properties and what systems and checks are in place is an issue of growing importance, and many are taking steps to ensure they have greater oversight for the sake of their properties’ operational efficiency and returns.

Property managers provide a critical service to asset managers, handling the day-to-day operational activities that most asset managers simply do not have the capacity or capability to oversee themselves. Yet, frequently asset managers do not choose their own property managers. And often they enlist joint venture partners to do the job; however, these partners are usually brought on to a deal because of an existing relationship or reputation in a particular asset class – not property management credentials. In any case, operational due diligence has not been a consistent feature of real estate transactions. Now, however, there is a growing awareness that it should play more of a role.