Condo Media - November 2012 - 40

COVER STORY
carte services to many of them. Most want financial services, she says, but some want construction management or maintenance services, which her firm also provides. Communities that start with a single service, she has found, often add to that list, in some cases, morphing over time from a la carte to full-service clients. Tim Arel, CMCA, AMS, owner of North Point Management, LLC, also sees a la carte services, mainly for smaller community associations, as a growth area for the industry. “Communities with full-service may change management companies, but they will continue to want full-service,” he says, either because owners are accustomed to that level of service or because the community “can’t afford to operate without it.” Because land is scarce, Arel says, “You won’t see a lot of large-scale community associations being developed in the future.” Most new condominium communities will be smaller and more likely than larger ones to be interested in a la carte services. “That’s where the growth will be,” he predicts — serving these new communities and other small properties “that used to be self-managed.” It isn’t just the relative affordability of a la carte services that appeals to community association boards, Arel says. It’s the degree of accountability and transparency these arrangements provide. Instead of offering a fixed price for a package of services, the company offering unbundled services provides a “pricing matrix,” he explains. “There’s no question about what services the management company is providing or how much the community is paying for each of them.” That level of transparency also benefits the management company, Arel suggests, because boards and owners are more likely to recognize the value of services if they are itemized and priced separately. The range and value of individual services may be less obvious when they are combined in a fullservice package. Offering un-bundled, a la carte services also has the potential to address one of the industry’s major problems: manager burnout. Instead of operating exclusively as portfolio managers, with all the night meetings, site visits and pressures that implies, managers can provide consulting services on an asneeded basis to some clients. This provides a different career path for managers and greater cash flow stability for management companies, Brawley suggests. “It’s a different way of operating.” Arel sees the future in the same way. “If managers no longer have to deal with financial issues, infrastructure, contractors, contracts, maintenance and project management,” he says, “they can become specialists in certain areas,” and management companies can hire with that in mind, looking for the varied “skill sets” needed to meet the needs of different clients. This different operating model could also change the way managers are perceived, Brawley suggests. Managers often complain that boards and owners view them not as professionals but as vendors, more akin to the companies providing landscaping services than to the accountants and attorneys providing financial and legal advice. Managers providing consulting services priced by the hour are more likely to be viewed as “experts,” Brawley says, recognized as professionals and valued more highly as a result. Compared with expanding business opportunities and stabilizing cash flows, this may be a less obvious benefit of unbundling for management companies, but for the industry over time, it may turn out to be the most important benefit of all. CM Nena Groskind is president of eContentplus, providing editorial content for websites, print and electronic newsletters and magazines.

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Condo Media - November 2012

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