BRE Properties CEO and President Connie Moore was headed for a California Housing Council meeting in Foster City—but she needed directions. So she stopped in at BRE's Fosters Landing property. Needless to say, the property manager and regional manager, who happened to be on site, weren't expecting the CEO's impromptu visit. “They looked at me like, ‘Oh my God. Why is she here all by herself?” recalls Moore, who runs the San Francisco-based REIT. “I knew they were nervous. Anytime there's someone that many layers ahead of you [on the corporate ladder], you want to make sure all of the balloons and the flowers are out at the property.”
After a quick joke announcing a surprise audit, Moore chatted with the regional and property managers and went on her way. Moore's sense of humor helped relieve the tension of the situation—but it usually takes more than a quick quip to make a site visit productive. Executives must relieve property management personnel's anxiety while remaining focused on gathering information. This means going in with a plan and sticking to it.
EARLY WARNING Given her choice, Moore prefers not to surprise her property managers as she did at Fosters Landing that day. Not every CEO shares that philosophy, though. “I think it's important to monitor a property when they don't expect it,” says Steve Heimler, founder and CEO of Stratus Real Estate, a third-party manager based in Woodland Hills, Calif. In fact, executives at companies that specialize in third-party management say impromptu visits are often very useful: They reveal what the property looks like when employees aren't on their best behavior for a corporate visit.
For A. David Lynd, COO of The Lynd Co., an apartment owner and manager in San Antonio, Texas, some properties are more likely to get unannounced visits than others. “If a property is in trouble or is not operating as well as it should, it will warrant unannounced site visits,” he says.
FIRST IMPRESSION Talk about a first impression: Heimler's property visits start before he even gets out of his car. “I start with a drive through to see the back of the property, the parking area, and the Dumpsters,” he says. “I look to see if guys on [the] grounds are sitting and smoking by the shop.”
Once he's parked, Heimler then heads to the office to greet everyone and sit down with the manager. He wants to steer the discussion to certain areas and not get into what he calls his managers' “latest emergencies.” He'll review the weekly numbers, traffic, leasing percentages, pricing, delinquencies, and lease management. He'll even delve into HR issues, such as the vacation schedule and which site personnel are prime for promotion.
Oden studies before his visit, learning the property's staff and its financials, such as operating income, year-to-date performance, performance versus budget, expense control, and every other relevant financial stat. “When I go out there, I know where this community stacks up on operating metrics” against other Camden communities, Oden says. “That forms the basis for my conversation. If they happen to be off the charts in one area, we'll talk about it. On the other area, if they are ranked 180 out of 200 on bad debt collection, we will talk about it.”
Moore takes an inquisitive approach, asking questions about maintenance, pricing, and general management issues. “It's my role to be a listener,” she says. “When I'm on site, I ask lots of questions and listen so I can understand how the community manager and leasing and maintenance guys are thinking.”
WALK AND TALK There's more than just talking on the site visit. Observation is also a key component, and walking a property's grounds offers executives a prime opportunity to do just that. Lynd wants both the property manager and the lead maintenance person to accompany him as he walks.