Condo Media - December 2015 - 26

WHAT LIES AHEAD
These decidedly positive responses
reflect in part the impact of an improving
economy, which has reduced delinquency and foreclosure rates and relieved the financial pressures that many
communities struggled with during
the Great Recession and its aftermath.
However, the survey results don't reflect
the challenges the industry faces as condominium populations grow, technology
changes, and condominium buildings
and their managers age.
Our own informal survey of industry
professionals elicited a formidable list
of management, financial, and legal
challenges we should anticipate and be
prepared to confront.
MANAGEMENT GAPS AND
OWNERSHIP CHANGES
Managers foresee a growing number
of empty chairs in their oﬃces as older
managers retire and younger ones burn
out with increasing and distressing
frequency. Ken Bloom, CPA, a partner
in Bloom Cohen Hayes, LLC, says his
conversations with the owners of management companies often begin or end
with them asking, "Do you know of any
managers who are looking for jobs?" It's
becoming "almost impossible" to find
new managers, because with its long
hours, intense pressure, and demanding
and often unhappy clients, "the job just
isn't that attractive," he says.
Robert McBride, CMCA, AMS, PCAM,
president of The Dartmouth Group Inc.,

AMO, AAMC, also sees the diﬃculty
replacing retiring managers as a major
concern. But it isn't only senior managers
who are getting older, he says. "The owners of many management companies are
north-and in some cases, well north of 50
now." They will have to start developing
exit strategies, either turning their companies over to family interested in running
them or selling to larger companies-possibly located elsewhere in the country.
"We are going to see some significant
ownership changes in our industry over
the next three to five years," he says.
Management companies also continue
to struggle with low profit margins, and
that problem will only intensify as the
condo population grows and demands for
management services increase. "Something has to give," McBride says. "We're
going to have to look at different ways of
delivering services profitably, without
continually increasing our fees."
As companies match the fees they
charge more realistically with the services they provide (one of the changes
McBride anticipates), many will avoid
communities known to have serious
problems. As a result, we'll see more
orphan properties unable to obtain the
professional management services they
need, he says.
AGING STRUCTURES
It isn't just managers and management
company owners who are aging. The
buildings they manage are as well. That's

"We are going to see
some significant ownership changes in our
industry over the next
three to five years."
-Robert McBride, CMCA,
AMS, PCAM,
President of The Dartmouth
Group Inc., AMO, AAMC

CONDOMEDIA

not a new or unexpected development,
but the past winter forced many communities to confront costly maintenance,
repair, and replacement projects they
had long deferred or ignored. And that
represents another huge challenge for
management companies.
"We either have to persuade boards
and owners to do what they need to
do to prevent the ice dams and related
nightmares they experienced last winter," McBride says, "or we're going to get
our butts kicked again this year."
The looming reconstruction and
envelope repair and replacement
projects that will strain the budgets of
condominium associations and tax the
patience of boards and managers will
create opportunities for the engineers
who will be asked to analyze structural
problems and propose solutions for
them. That's why Ralph Noblin, owner of
Noblin & Associates, a consulting engineering firm that works extensively with
condominium communities, advises
engineering students to focus on reconstruction rather than new construction
as they ponder career opportunities.
"Consulting work for condominiums is
going to explode," he says.
But Noblin also sees a looming
deficit of the skilled workers needed to
implement the repair and reconstruction projects engineers recommend.
"Contractors are dying for help," he
says. Young people, for the most part,
aren't interested in those jobs. While the
demand for condos is growing, the "fix-it
guys" are disappearing. "Where are we
going to find the people who are going to
maintain and repair the condominiums
people are buying today?"
The same question applies to efforts
to find volunteers willing to serve on
association boards-a long-standing
problem that continues to perplex industry professionals. Many current board
members have served multiple terms,
but they won't do it forever, Noblin says.
Managers and board members need to
do a better job of explaining what serving
on the board entails.
The behavior of existing board members is often the biggest impediment to

Condo Media - December 2015

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