Owning and operating property in New York City is a double-edged sword of great opportunity and intense regulation.
Navigating the city’s complex laws and ordinances can become a round-the-clock effort for already overburdened and understaffed small- to medium-sized, non-institutional landlords. Combine that with a challenging regulatory and political environment for owners can be discouraging and overwhelming without a knowledgeable, capable management partner. Fortunately, Michael Besen established New York City Management LLC to help independent operators thrive in this often-hostile but potentially high ROI environment. TRD spoke with NYCM’s leadership about how their division of Besen Partners helps their clients avoid some of the city’s major pitfalls.
Public Enemy Number One
“The pressures on today’s landlords are enormous,” says Sanjay Gandhi, NYCM Senior Managing Director.
“The word ‘painful’ comes to mind,” says Gandhi. “Ironically, real estate owners, who are the single largest contributor to the tax base in New York City, seem to have a target on their backs from tenants, lawmakers and their various constituencies. The local laws keep coming, which make operations and compliance exceedingly difficult.”
Add these regulatory changes to constantly-rising taxes and operating costs, the compliance and paperwork required of rent regulated buildings, savvy tenants looking to take advantage of a system that often takes their side in disputes, and the lingering financial burden of the pandemic, and it becomes obvious that independent operators in NYC need all the help they can get.
“I see all the operating challenges firsthand every day, and the obstacles just keeps growing,” says John Catalic, NYCM’s Chief Operating Officer.
Property management companies like NYCM aid landlords by tracking local law violations, handling reporting to banks, maintaining accurate rent rolls and ultimately gaining a comprehensive understanding of what’s going on inside a building.
For example, NYCM helps clients stay on top of and comply with new legislation. Keeping track of ever-changing laws, some of which may go into effect with requirements that kick in years from now, requires expertise and focus.
The city’s parapet law, for instance, requires stamped-and-certified visual inspections by the Department of Buildings; if a landlord doesn’t comply, they may be levied fines. NYCM’s experienced staff can steer the oversight of these and other mandates on a day-to-day — and year-to-year — basis.
“When you’re looking at this bigger picture, we are able to direct owners and help them foresee where problems could fester. We also present opportunities to grow and optimize over time,” says Catalic.
The NYCM Vision
Understanding the importance of competent management, Michael Besen started NYCM in 1995 to manage his own personal investments. Gradually, the division began to take on outside clients, expanding to servicing mostly third-party management assignments from private individual owners as well institutions.
“My vision was always to position NYCM as a complementary business to our Investment Sales brokerage division,” states Michael Besen, Founder and CEO of the company. “Our business has since grown to manage more than 200 buildings in the city, encompassing over 2,000 units. The knowledge base is also an asset to our investment sales team, members of whom often consult our experienced Property Managers to help problem solve for their clients.”
No other middle market investment sales brokerage has an in-house property management division at this level. The firm oversees a portfolio largely comprised of multifamily as well as retail and commercial properties such as the Fine Arts Building at 232 East 59th Street. When building a relationship with a client, NYCM tailors its services to the owner’s individual needs. While some clients want to retain certain aspects of management under their direct control, others want NYCM to step in and handle the full scope of the management. The company’s experienced property managers develop a relationship with each client and work as a partner to make sure that their buildings are operating at the height of their capacity, no matter what issues may crop up.
“We provide expertise to diagnose problems and offer solutions for building owners,” says Gandhi. “We can help with a myriad of issues, including clearing violations, straightening out spotty paperwork, even making repairs and renovations. We can clean up a property to help prepare for a sale, or step in and manage it as an alternative to selling if the owner isn’t fully ready to exit the asset.”
Bring In the A-Team
NYCM’s team is made up of experienced industry professionals like Catalic, who has worked for almost three decades in the industry with roles as wide ranging as porter, handyman, construction supervisor, manager and owner.
“That bottom-up experience brings a lot of comfort to owners,” says Catalic. “They know we’re not just sitting behind a desk reading about how to repair a boiler. We know what rules need to be applied, and we know what permits need to be filed. That’s a big plus. Most of our Property Managers have over twenty-five years of experience. We are hands on, located in midtown Manhattan so that we can easily and repeatedly visit the properties we manage in person, which we always do.”
Each NYCM project manager is the single point of contact for their clients, overseeing their buildings and stewarding ongoing operations as well as renovations and maintenance. These project managers run each building as if they were its owner, taking pride in their work and delivering a white glove service.
“We run properties with an ownership mentality,” says Gandhi. “Our goal is to preserve and increase the value of our clients’ assets.”
Visit NYCM’s website to learn more at www.nycmgmt.com.
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Sanjay Gandhi
John Catalic
Michael Besen