The Private Equity Real Estate Podcast – Show 8

   

   

Summary
Joining us this week is Jackie Cammerer. Jackie manages the nationwide portfolio for First National Realty Partners and provides her perspective as to what it takes for her and her team to successfully manage 3 million square feet of commercial real estate.

If you have any topics you want to hear about, let us know! We have experts in all real estate fields and would be happy to interview one of them for you. Contact us at info@fnrealtypartners.com and let us know what you’re looking to learn about.

If you would like to invest passively with FNRP or learn more about our commercial real estate investments, you can go to www.FNRPUSA.com


Announcer:
You’re listening to the Private Equity Real Estate podcast brought to you by First National Realty Partners, where investors learn from private equity experts and insiders. We share our own real world experiences so you can know exactly what it takes to be highly successful at investing in passive commercial real estate opportunities.

Nick Cucci:
Hey, what’s going on everyone? Welcome to another episode of the Private Equity Real Estate podcast brought to you as always by First National Realty Partners. This is the ultimate resource for passive real estate investors. I’m your host, Nick Cucci, and today on the show, we have the head of the property management team at FNRP, Jackie [inaudible 00:00:00:40]. Did I say that right?

Jacqueline:
You did not. It’s actually [inaudible 00:00:00:41], but that’s okay.

Nick Cucci:
[inaudible 00:00:44] Okay. Yeah, I meant to ask that before I started. But what can you do? Jackie, thanks for taking the time and joining us today. How are you doing?

Jacqueline:
I’m well, thank you. How are you?

Nick Cucci:
Not too bad. It’s Friday. It’s a little rainy, but I’m okay. So welcome to our semi-fancy FNRP studio that we’re setting up here.

Jacqueline:
Thank you. I love it.

Nick Cucci:
Thank you very much. You know, the listeners have yet to meet you. I’m wondering if you can tell us a little bit about yourself and your experience as a commercial real estate property manager.

Jacqueline:
Sure. My name is Jacqueline. I’m the property manager here at FNRP. I’ve been in the industry for about 14 years now, spending most of the time in commercial retail and some in commercial office as well.

Nick Cucci:
Very cool. So this is a great topic because property management will make or break an investment. You and your team, you’re the eyes and ears at an investment property. You’re the boots on the ground. If something goes wrong, you’re the first to know, and you need to be prepared to handle whatever issues are going to come your way. So a lot of our listeners have experience in real estate, but generally not on the management side of a larger commercial real estate asset. So I’m wondering if you can tell us just a few examples of your day to day as you’re overseeing these assets.

Jacqueline:
Sure. Well, my day can simply start off with general operational followup with our field support, but it can also quickly turn into triaging a roof leak with property damage after a bad storm or finalizing annual budgets with our controller. Every day is unpredictable, but our department has a fantastic support team that balances the workload depending on each property’s workflow.

Nick Cucci:
So you have to be ready at any given time to handle a lot. Because we always hope that nothing’s going to go wrong at our investment. We set it up for success as best as possible. But things happen. So how can you prepare for multiple things happening all at once?

Jacqueline:
Sure. We’re only as good as our service contractors, our boots on the ground, our property administrators. It’s really all about relationships and having the right people surrounding you.

Nick Cucci:
Yep. And we’re in multiple states. So do you have touch points? Do you have check ins with people frequently? How do you manage that?

Jacqueline:
Definitely. So we speak to our maintenance supervisors who are on call on a daily basis every single morning. They’re really our eyes and ears on the ground. So we rely on them heavily. They have relationships at the local building departments, with the tenants, with our emergency service contractors as well. So that’s the most important sort of touch base each morning that we do to make sure that everything’s going well at the property.

Nick Cucci:
And that’s fantastic, because that is not it… I know some people who check in biweekly or they get monthly check-ins and whatnot. This is a pulse check every single morning to make sure that your investment, that your property is working well.

Jacqueline:
Exactly. Especially with the pandemic this year, we’re more so paying attention to everything that’s happening on the property, openings, closings, either a reduction or an increase in certain maintenance services to make sure everything’s running smoothly. So it’s our most important tasks of the day to make sure.

Nick Cucci:
That’s a really good call out regarding COVID-19. And now that we’re sort of in full swing and adapting to this new normal living in this pandemic, what sort of a general maintenance have you had to roll out as a result of the pandemic?

Jacqueline:
Sure. Well, in the beginning we had a reduction of services just to protect our cashflow, to make sure that our cam rates were going to be in line with what needed to happen while certain tenants were closed for longer periods of time. So that was our first step. Our second step was making sure all the janitorial throughout, mainly our office buildings, were increased to almost double what we used to have to make sure we dealt with all of the high touch points on elevators and bathrooms, on doorknobs, on entrance doors. We definitely kicked it up with the janitorial. But from an overall services standpoint, we tried to match the overall decrease in traffic flow with our services around the property to make sure we protected that cashflow.

Nick Cucci:
That is great. And re regarding cashflow, can you talk a little bit about how property management in general really plays a major factor into an asset’s cash flow or the upside?

Jacqueline:
Sure. Property management, we pay the bills. So our decisions directly contribute to the financial health of the property. One of our core values here at FNRP is to negotiate everything. And that’s a rule we live by on a daily basis, whether it’s a new service contract, whether we’re re-forecasting, like we are right now for the remainder of the year due to the pandemic, or if we’re just generally having a repair or replacement done. They actually nicknamed us the negotiators because we never took the first price. And I’m sure Tony will appreciate that.

Nick Cucci:
That’s always a delicate dance, right? Because you can talk to five vendors and you always look at the bottom number and you say, “Well, there’s something wrong with that bottom number.”

Jacqueline:
Exactly.

Nick Cucci:
So how do you guys go about choosing a vendor and qualifying a vendor while also negotiating to try and find the best rate?

Jacqueline:
Sure. Well, the first relationship we leverage is with our maintenance supervisor. They’re always local to the properties. They know the properties like the back of their hands. And they know all of the local contractors in the area as well. So we make sure we have a reputable company. We typically don’t go with the lowest price because there is something wrong with that. But we’re looking for experts in the field that know the community, know the local building departments, understand what inspectors want as well to make sure that we’re making the right decision upfront.

Nick Cucci:
And I think that right there is such a smart way of going about it. Is that almost one of the first questions, like, “How well can you navigate the local municipalities?”

Jacqueline:
Yes. If we’re working with someone that does not have experience with the local government, it’s very difficult to get a permit passed through immediately, an inspection passed quickly on the first go around. So it’s definitely important that they have a relationship with the local government and community.

Nick Cucci:
And that will trickle down to your tenant experience as well because your capability to then follow through and quickly update or change the property as needed is going to make a better tenant experience and a better tenant experience is going to lead to a better consumer experience. So it helps the entire life cycle of the property. I think that’s such a fantastic way of qualifying somebody, even if the price may not be as competitive as somebody else, but the capability to take care of something with speed makes all the difference.

Jacqueline:
Sure. Relationships are definitely as important to us as expertise.

Nick Cucci:
For sure. So let’s talk a little bit about preventative maintenance at our properties. Let’s say we have a new acquisition, what are some of the items that you’re first looking at to make sure that we’re getting ahead of any potential issues?

Jacqueline:
Basically, we really take a deep dive into the service contracts to make sure they match our standards. We want to make sure that if we’re not happy with services, we can remove ourselves from the contracts and rebid everything within 30 days each time. We also vet thoroughly each service contractor to make sure that they can meet our standards and the quality of work is where we want it to be.

Nick Cucci:
That is great. Regarding tenants, any crazy tenant stories?

Jacqueline:
Not many that I can share. Everyone’s normal. And then there’s crazy tenant stories. So I couldn’t really think of anything that I can elaborate on here.

Nick Cucci:
Nothing that you can call out?

Jacqueline:
No, I can’t.

Nick Cucci:
That’s all right. So moving right along. You have to deal with construction teams all the time. How do you set yourself up for success when you’re working with construction teams?

Jacqueline:
Sure. I think this goes back to my previous answer of hire GCs that are experts, but also have local experience. Each township has different nuances when it comes to applying for permits, who to talk to, how to persuade them to push it through or put your permit application at the top of the file, or even getting inspections quickly so we can support that tenant’s grand opening or a new development project. So having someone local that knows the ins and outs and has those relationships with the township officials, engineers, even the admins and support staff in the office, all of that is important when it comes to managing construction.

Nick Cucci:
So regarding construction teams, have you ever had a vendor just go dark on you in the middle of a project? And if so, what have you done to make sure that doesn’t happen going forward?

Jacqueline:
Sure. I’ve actually never had that happen basically.

Nick Cucci:
Good for you.

Jacqueline:
Well, with anything else, you control it with finances. The get a smaller deposit upfront and they get progress payments as they move along through the project. And that is their biggest incentive to make sure that they stay on time and they actually show up to do the job.

Nick Cucci:
Yeah. And I’ve learned that lesson the hard way, but it seems like you’ve really deployed it well from the beginning, which is make sure that you’re structuring your payments to your contractors in a way that is going to incentivize them to not only finish the project on time, but maybe even potentially finish it ahead of schedule as well.

Jacqueline:
Sure. Definitely.

Nick Cucci:
So as far as the structure of your team and managing a team, have you found that there is a best way to structure management inside of a portfolio of investments like you have here at FNRP?

Jacqueline:
Sure. Well, our property management team is sitting on the fence between a mechanistic and organic structure. From a day-to-day procedure standpoint, we have each aspect of our operational management in a centralized platform with specific workflows to control our controllables. But when it comes to managing different contractor personalities or massaging a special request from a tenant, we gauge and strategize the approach, depending on the need of the situation. We have members of our team that have different strengths. One of us could have a longterm relationship with the roofer that we need onsite in 20 minutes, or another one of us could be a better fit for a contract negotiation.

Nick Cucci:
Okay. So that makes really good sense. You have a general structure that you kind of live by on the day-to-day, but as needed, you guys can sort of weave in and out of positions to make sure that something gets taken care of.

Jacqueline:
Definitely.

Nick Cucci:
When it comes to breaking up the properties, we have over 20 properties, I don’t know what the exact number is, 21 or 22 around the country, how are we breaking it up with the team? Are there territory managers? Or how do we structure it for success?

Jacqueline:
Sure. Well, we don’t exactly split it down the middle depending on region. We actually have a scale of low, mid, and high maintenance properties that we split between our two property administrators. We’ve also given them properties that they could use the experience with to help sharpen their skills. If they have a little bit more of a weakness with some difficult tenants that may call and complain a bit more, or say if they’ve never really dealt with high accumulation snow winters, and we give them a sort of a Pittsburgh-area property to manage. So it’s always a mix between what they can handle and what their strengths and weaknesses are.

Nick Cucci:
That’s really smart though, because now you’re giving them properties based on their capability level, but then you’re also putting in there sort of some skill-sharpening properties where it’s like, “Hey, maybe you’re not used to this snow accumulation in Pittsburgh. So we’re going to give you this property here and you can kind of learn and cut your teeth that way,” so that you’re constantly sharpening everyone’s skills.

Jacqueline:
Definitely. I think educating our staff and helping them elevate themselves is definitely a top priority at FNRP. And we’re excited to give everyone the opportunity to continue to learn and be mentored by everyone in our department, not even just myself, but Alex Vitro is always available as well. And I believe we have a new portfolio manager, Barry, who is super smart and open to questions and continued development as well.

Nick Cucci:
That’s awesome. So tell me some wins you’ve had in your career. How long have you been in the property management game?

Jacqueline:
I’ve been in it for 14 years. I’m aging myself. But I’ve been in it for 14 years. Some wins. Joining FNRP has definitely been a 2020 win. Our team is honestly the most ambitious, innovative, and agile group of people, especially through the pandemic. So it’s definitely been a game changer in my career. But previously, I worked for a wireless franchise. We started off with two stores and a dream. And when I left, we had just completed an 80-store expansion over a very tight timeframe of six months. We were successful and it was exhausting. We ended up with about 211 stores by the time I started looking for new opportunities because I definitely needed a vacation after that.

Nick Cucci:
So wow, so you went from two?

Jacqueline:
We went from two.

Nick Cucci:
To 211 units.

Jacqueline:
Yep. In about nine years.

Nick Cucci:
That’s really impressive.

Jacqueline:
Yeah. Thank you so much. It was a lot of work. But it was a similar situation to FMRP. They were a younger company. We didn’t exactly have money to pay the bills all the time. But we worked through it with a lot of grit and hard work and we grew the company to the third largest wireless retailer with T-Mobile.

Nick Cucci:
That’s amazing.

Jacqueline:
Thank you.

Nick Cucci:
Tell me some of the biggest learnings that you’ve had in your career as property manager.

Jacqueline:
Sure. Well, I would love to say I haven’t had any, but losses are what help us grow and teach us invaluable lessons. I think it’s definitely an in the construction aspect of our business, a lot can be controlled, but construction and permit timing and permit review times, in addition to just general even material delays, they can definitely impact a project significantly if not managed properly. So I really think that you need to hire the right people as we touched on earlier. Hiring the right people is paramount. If we aren’t surrounded by professionals that want to be great on a daily basis, you’re bound to run into operational problems, construction delays, budget issues. You’re only as good as a team you carefully cultivate.

Nick Cucci:
Yeah, I Do agree with that 100%. Get the right people on the bus and then it doesn’t really matter where you’re going, right?

Jacqueline:
Exactly.

Nick Cucci:
So how do you set up your team for success?

Jacqueline:
Organization and time management is our biggest priority right now. We have a lot of properties so our time is very precious. Every property management software has standard functions that help streamline day to day. But the automations and integrations that allow us to customize anything to fit our needs is what really helps us sharpen our efficiencies and take them to the next level.

Nick Cucci:
Yeah. I definitely agree with you there. So I was going to ask what, what it takes to be a great property manager, but you may have just answered that a little bit when you talked about your time management and organization. Now, is there anything else that you think it takes to be a great property manager?

Jacqueline:
Yeah. I think organization and time management is definitely the foundation that you need no matter what you’re doing, but problem solving skills and having strong relationships is definitely needed in this industry. We can only control so much, but if you have the right structures in place, you can sort of bob and weave and flow with whatever comes your way on a day-to-day basis.

Nick Cucci:
Yeah. And this sort of comes back to how you structure your management as it is, where you guys are structured, everybody has their job, but then you’re also organic in the sense where, “Okay, you have a really strong roofing relationship, come on over here and help me take care of this.” So it has the flexibility inside of that structure to be successful.

Jacqueline:
Definitely.

Nick Cucci:
So we end every show asking everybody three quick questions. So what is your favorite business book?

Jacqueline:
My favorite business book is How to Make Friends and Influence People by Dale Carnegie.

Nick Cucci:
Such a good book.

Jacqueline:
Such a great book, right?

Nick Cucci:
And nobody has said that yet.

Jacqueline:
Really?

Nick Cucci:
Yeah, it is. That is such a good book.

Jacqueline:
It’s wonderful.

Nick Cucci:
What is your favorite food?

Jacqueline:
Pizza, hands down.

Nick Cucci:
You’re the third person.

Jacqueline:
Really?

Nick Cucci:
And you’re not wrong. Now, is there a specific type of pizza?

Jacqueline:
Any pizza.

Nick Cucci:
Yeah?

Jacqueline:
Yes, any pizza, and I’m there.

Nick Cucci:
Like Digiorno?

Jacqueline:
It could be Digiorno. It could be specialty pizza. It could be pizza in Italy. It doesn’t matter.

Nick Cucci:
I’ll take the pizza in Italy if I can get there. If you could travel anywhere tomorrow, anywhere in the world, where would you go?

Jacqueline:
I would go to Croatia. One of my best friends is Macedonian and we’ve made a promise to each other to be in the Adriatic Sea together at some point within the next 12 months.

Nick Cucci:
Oh man. Well, I hope the pandemic doesn’t stop your plans down and you’re able to get there.

Jacqueline:
I hope so too.

Nick Cucci:
So thank you. This was great. Thanks for taking the time to come on and hang out with us a little bit today, and we’ll see you again.

Jacqueline:
Thank you so much. Thanks for having me.

Nick Cucci:
Absolutely. And thank you everyone for listening to the Private Equity Real Estate podcast. If you like what you’re hearing, leave us a review, subscribe, share the show. If there’s anything you want to hear us discuss, shoot us an email. Shoot me an email. My mail is in the show notes. The show is brought to you by First National Realty Partners, one of the top syndicates of private institutional-quality commercial real estate in the country. If you’re interested in learning more about FNRP or would like to get access to our private offerings, please click the link in the show notes or visit FNRPusa.com. Remember that this show is for educational purposes only and should not be considered a solicitation to purchase securities or be construed as tax, legal, investment, or accounting advice. Thanks for listening everyone. We will see you again soon.

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