Million-Dollar Management Luxury Properties Demand Premium Services

Million-Dollar Management

At the vast majority of condominiums, a management company’s duties can be fairly straightforward – maintain the common areas, advise the trustees about operations, and keep financial documents and other records. But in the rarified atmosphere of $1 million-plus condominium units, the management team takes on an expanded role. Managers become home service experts, performing a myriad of tasks that are customized to individual needs. Management becomes such an integral part of the luxury lifestyle that it’s even touted in the marketing campaigns.

More than a few high-end Boston area properties lure buyers with promises of an on-site superintendent, valet parking, and 24-hour security and concierge. Marketing materials describe almost unlimited services, painting a picture that can include attendants who will wait in your home for service contractors; personal chefs for everyday meals or catering for when guests come over; tickets to any event along with the limo to transportyour party there; and a concierge who can go beyond the services of a mere travel agent to ensure your perfect vacation. The list goes on.

Beyond all the granite and stainless steel-designed kitchens, state-of-the-art master bathrooms, and rooftop terraces, the major draw for these ultra high-end properties seems to rest solely on the shoulders of a management company –and its people.

New England Condominium asked a select group of these service-specialty management firms for insight on how their niche of the real estate industry is faring lately, and what sets them apart.

Ron Brown is president of R. Brown Partners, Inc. of Brookline, Massa-chusetts, which manages 38 communities, mostly in upscale Brookline. In the highest price level, he states, “We have a building with five units – they’re all floor-through [occupying an entire floor] –in the Back Bay. They have concierge service, river views… two parking spaces per unit. One property [we manage] with 15 units provides underground parking.”

Brown observes that Brookline, which used to house students, and other Boston areas “have changed dramatically since the condo craze took hold and started competing with Beacon Hill [for the luxury real estate market] since the 1980s.”

The hot Boston market of hotel and brownstone conversions into luxury condominiums has not suffered much in light of hard times in the real estateindustry. Sales in a recent conversion project that he has observed “may not be moving as fast as they used to, but all units have sold,” he notes.

“The foreclosure problem has not affected our properties… they’re all owner-occupied,” he adds.

Staff Available 24/7

R. Brown Partners includes six full-time staff. For on-site personnel, its president says, “We hire through concierge or security services.” Having management staff available 24/7 is what sets these properties apart from the average condominium property. Brown points out, “When people spend several million they expect [exceptional] service.”

While R. Brown and some management firms mostly use outside vendors for the myriad services at their luxury properties, others use their own staff. At Mediate Management in Boston, president Mark Mediate reports, “We have 120 employees, of which 50 staff the properties [on site]. Some are live-insuperintendents.”

His company manages about 100 properties in metro Boston. For most of them, he adds, “We provide customizedservices in the common areas… Some have valet parking all the time. We have properties as small as five units that have their own concierge.”

One of the things that can keep full-time concierge staff busy, even for a handful of units, he explains, is the attention to everyday, minor details. “There’s always residents, along with their staff, coming in and out, with baggage, luggage, groceries, shopping. The concierge will call a cab, find a plumber, make sure things are fixed, hang a picture. Also, the concierge is there to coordinate building vendors, service people or contractors visiting individual units… not to mention the security factor. These residents travel, go out… may not be home a lot. The concierge is taking the place of a live-in superintendent or doorman [so] there’s always someone around.

“We also do some of the maintenance and renovations since we have a full time maintenance division with painters and carpenters. There are a lot of exterior projects on some of these 100-year-old buildings, with slate or rubber roofs that need replacing. For bigger jobs, we sub-contract [things like] HVAC, plumbing, masonry, roofing… We act as the job coordinatoror clerk of the works on behalf of our clients. We will work with engineers and help choose contractors.”

This extra effort on the part of a management company goes with the concept of “a well-run building,” Mediate says. “It’s something buyers should be aware of because it adds to the property’s value.”

And while labor costs are a fact of life in luxury communities, it seems as though common-area facilities would become increasingly elaborate [and expensive to maintain] as a property’s price tag escalates. The opposite, however, is often true, Mediate observes. When units are in the multi-million range with 3,000 or 4,000 square feet of living space, “residents are more inclined to visit a day spa or install their own whirlpool or fitness equipment [in their own unit]… so a common-area fitness center or pool doesn’t get used.”

High-end Owners Crave Security and Service

So common-area amenities may not be in great demand at the very highest end of the market. “These owners are savvy, although their needs and requests haven’t changed that much [over the years],” he points out. “They want security and service.”

And they are willing to pay for it. All this service translates into labor – and extra staff. “Labor is the most expensive part of the [annual] budget,” notes Mediate, “followed by common area costs, then insurance. With a concierge, unit fees can range into thousands of dollars per month.”

A concierge, even in a small property, can really get stretched just dealing with in-house tasks. They typically cannot leave the building to do errands for unit owners, and depend on errand-runners and delivery people who can be relied upon for off-property tasks. Mediate reports, “It’s a constant challenge to meet some requests that could take [in-house staff] out of service to the other residents… We tend to refer [other vendors] for pet-walking or plant care services. We are trying to be accommodating to all residents –all the time.”

Another industry insider who is seeing stability in the luxury end of the condo market is Kevin Kelliher, president of Lundgren Management Group in Chelsea, Massachusetts. He contends that many condominium communities may be struggling with foreclosures and the numerous after-effects, but “in the high-end part of the market, sales are still increasing… these properties are doing great.”

His company services 25 communities with a staff of about 40, and almost a third of his client properties are upscale, selling in excess of $750,000 to severalmillion dollars.

Lots of “Hand-holding”

Kelliher describes management service for luxury unit owners as being “more hand-holding than anything else,” whether someone wants concert tickets, a carpet cleaned or a limo at the door. “We even sponsored a Halloween party for the youngsters” at one property, he says, adding that “there is a growing population of younger families in the sites we manage. They like their [city] location –providing it has parking.”

He agrees with other managers that residents in luxury properties basically want security and service, and to address that, “We arrange for 24-hour concierge service and back-up maintenance. The concierge often is a dual role, between doorman and security. We have outfitted some clients’ buildings with high-definition cameras so staff can be stationed at a central desk, keeping tabs on phones and video monitors. This provides an additional set of eyes and ears, which can augment the property's value, and give residents additional peace-of-mind.

“Some concierge staff may serve as a superintendent and know how to handle emergencies. This does not require leaving their post, but knowingwhom to call,” Kelliher says.

Ideally, Lundgren notes, “The [management company] name will carry some clout among local contractors and service vendors – and they’ll be more likely to respond right away.”

So in the world of high end condo properties, the management firm with the right reputation is no longer anonymous and toiling silently backstage –it’s now featured on the marquee.

Marie N. Auger is a freelance writer from Westminster, MA.

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