The FORT Podcast: DD, Onboarding, and Business Plan Execution on Assets
On today’s episode, Chris is joined by the Director of Asset Management and the Director of Property Management & Construction for Fort. They’ll discuss how they think about due diligence, onboarding, and execution in the first year of purchasing an asset. They also discuss their roles, the nuances of their day-to-day operations, some of the mistakes they’ve made, and how they’ve improved.
We’re planning on doing more of these episodes in 2021. If you have any questions on how we operate at Fort, email us at thefortpodcast@gmail.com and we may just make an episode dedicated to it!
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(01:21) – A High-Level Overview of Steve’s Role in Property Management in Construction
(02:01) – Asset Management Role
(03:43) – What happens in each of your worlds from “we’re buying this asset” to the day it actually closes in a multi-tenant industrial deal?
(05:07) – How do we continuously keep leveling up and identify red flags as we gain more data about the asset?
(06:10) – When we underwrite and put together a Cap-ex plan, how do you think about the projected Cap-ex and build a budget?
(07:41) – Are there other things you do during due diligence that fall under the asset management responsibility?
(08:46) – How do asset management and property management work together during the due diligence phase?
(10:13) – How are things different after bringing property management in-house? What are the advantages of doing so?
(12:08) – What are we doing on each side in terms of our due-diligence checklist?
(14:06) – Why is it so critical to review each lease individually?
(16:51) – Are we interviewing every single tenant with each property?
(17:32) – What happens on our team during onboarding now that we own the asset?
(19:03) – Do you have any experiences where tenants are much happier after Fort has taken over as property managers?
(20:41) – What does day 1 look like for asset management after closing on a property?
(22:00) – How do you determine who will be leasing our assets?
(23:16) – What is our process for how we continue the relationship with leasing brokers once we acquire an asset?
(24:40) – How does information about tenants that won’t re-up their lease flow from leasing broker to asset & property management?
(28:20) – Is having knowledge 90 days out before a tenant is leaving a requirement in the lease?
(29:53) – Why are we able to lease things that prior owners weren’t able to?
(31:33) – Are our TI costs pretty consistent across our portfolio?
(33:25) – Is anyone ever putting money into warehouse spaces beyond clean up or is it mostly allocated to the office?
(34:11) – What is the re-forecasting process like? Why is it valuable?
(36:40) – Is it cost-prohibitive for small tenants in an environment where we see 10-15% rent jumps?
(38:17) – How do you attempt to stabilize an asset from a tenant perspective?
(39:53) – How do you think about creating a budget for the year after purchasing?
(41:02) – How valuable is the massive amount of data available to us since bringing these operations in-house?
(42:12) – What do our lenders require from us throughout the year?
(44:43) – How have you taken your experience from home building and property management to think about how we can do things differently from everyone else?
(46:28) – FCP Management’s ‘2-24/7’ Expectations
(46:58) – Where do the majority of tenant inquiries/complaints come from?
(47:59) – How do you think about vendor management?
(49:32) – How does having a large portfolio help us land great leasing agents?
(50:25) – FOS Dashboards: Leasing Activity
(54:12) – Merrick Park – An example of ‘How the Sausage is Made’ Between the Property & Asset Management Teams
(56:30) – How would this asset process have gone with a third party group?
(58:36) – Do we tell our tenants during DD about our plans for the building or do we wait until we close?
(59:24) – How do you think about the 9 months after the first 90 days are under our belt? Does anything change?
(1:00:45) – What have you learned after 9 months of bringing property management in-house?
(1:02:26) – What breakthroughs have we made in Asset Management?
Episode Summary
Powers commences the dialogue by accentuating the significance of proactive strategies in property management, not merely contained to conventional practices like routine inspections but transcending towards establishing and nurturing tenant and vendor relationships, renegotiating service contracts, and subtly accruing feedback from tenants. An intricate strategy dubbed ‘227’ is introduced, an internal objective aimed at addressing tenant requests within two hours, providing a solution in two days, and assuring closure within seven days, epitomizing a commitment towards operational efficiency and tenant satisfaction.
Powers further elucidates the pivotal nature of tenant relationships, emphasizing a diligent and prompt resolution of issues, and ensuring the delivery of a seamless tenant journey despite the inherent complexities of property management. His dialogue navigates through ensuring optimal tenant experiences, from maintaining functional utilities to promptly addressing significant issues like roof leaks, thereby safeguarding tenant satisfaction and adherence to operational standards. Ensuring the functional utility of properties and safeguarding their physical and operational attributes to ensure tenant satisfaction is presented as a paramount focus, alongside a detailed exploration into the strategic and operational nuances of managing tenant relationships.
The conversation also veers into the strategic and operational challenges posed by fluctuating material costs, spotlighting strategic adjustments like modifying customer discounts as crucial levers to mitigate impacts on project finances and delivery commitments. A balanced approach towards technology is also highlighted, wherein technological interventions enhance operational efficiencies without overshadowing the personal aspects of customer interactions and relationships. The dialogue underscores technology as an operational enhancer, augmenting capabilities without diminishing the personal facets of customer interactions and engagements.
In the domain of organizational culture and strategic hiring, Powers unveils the intrinsic process of hiring as a strategic and cultural alignment, ensuring every team member, from construction managers to sales teams, plays a pivotal role in delivering a customer-centric experience and perpetuating the organizational culture and ethos. The discussion further transcends into anticipations and preparations for future market landscapes, revealing the strategic agility required to navigate through anticipated market dynamics and ensuring that organizational strategies and offerings are adaptively aligned with evolving market and customer dynamics.
In the concluding portions, continuous learning is spotlighted as a pivotal element in organizational and personal development, providing a reflective yet forward-looking perspective into the developmental pathways ahead. The dialogue, while providing a reflective summary of the insights shared, also subtly positions itself as a stepping stone toward future developmental pathways, ensuring that the discussion, while reflective, is also forward-looking and strategically positioned to navigate through future pathways in the organizational and market landscape.
The FORT with Chris Powers is produced by Straight Up Podcasts