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Creating Value in a Condo or Co-op Part II

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The “curb appeal” of a property sets an immediate impression for a visitor or prospective buyer, says Ira Meister, President and CEO, Matthew Adam Properties, a leading property management company.

“Starting with the landscaping (if there is any) and the entryway it follows as one enters the lobby,” Meister says.  Frayed or dirty furniture or rugs are a total turn-off and can immediately kill any initial interest by a prospective buyer.  The same with peeling paint and dirty carpeting in the hallways.  Some buyers may even look in the laundry and garbage chute rooms to see their condition. These areas say a lot about the upkeep of a property and the attention to detail.

Amenities also come into play. “Older buildings have to compete with newer, amenity-laden properties,” Meister notes.   A desired amenity for many is a health club or gym.  If an older building lacks such a facility, the board and asset manager should explore the feasibility of creating one.  Another possibility is creating or upgrading the roof deck so it becomes a desirable location rather than “tar beach.”  “In one East Side property, we took unused basement space and created a playroom for young children, which is very popular and a real plus for the building,” Meister says.

The attitude and performance of the staff are key, Meister says.  Poor morale leads to lack of attention and sloppiness.  Residents have daily contact with the staff and their attitude, work ethic and capabilities are important in the successful operation of a property.

Finally, technology. In the past decade or so, technology has begun to play an important role in keeping residents informed, and managing the operations of the front desk and the building.  Using technology increases efficiency, can reduce costs and create value.

It is clear that the asset manager plays a significant role.  In fact, the professionalism and capabilities of asset managers and the company they work for help create value.  “People who have sound management abilities, an understanding of mechanical systems, sensitivity to keeping a lid on costs, attention to detail, good people skills and a drive to make the property a showplace are the keys to creating value,” Meister says.

“This is one reason we at Matthew Adam Properties devote time to hiring, training and, most importantly, retaining our asset managers, many of whom have been with us for several decades.  Their knowledge, experience and dedication are behind our creating value.”

Creating Value in a Condo or Co-op Part 1

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If apartments in two different co-ops are essentially the same in terms of size, location and amenities, why is one getting a higher price per square foot than the other?  Could it be the uniform and demeanor of the doormen?  This might sound like a small detail, but first impressions are vital in determining a sale and price, says Ira Meister, President and CEO, Matthew Adam Properties, a leading property management company.  Paying strict attention to details is essential to creating value in a co-op or condo, one of the prime goals of a residential property management firm.

Meister says that Matthew Adams Properties feels so strongly about viewing a home as an important investment that it calls its managers asset managers.  “They are there to preserve and increase the asset value of the property, and thus the sale price of the units,” Meister says.

Ira Meister Adds Value to Condos and Co-ops, Improving Living Experience

Numerous factors contribute to creating value, some, such as the condition of the building, are obvious.  Others, such as the demeanor and look of the doormen, are less dramatic.           Here are some factors that add up to creating value in a property:

“One of the most important is the financial condition of the building,” says Meister.  How large is the reserve fund, is there debt, are the maintenance charges too high in relation to similar properties and have the monthly charges increased dramatically in the past several years?

These are factors that buyers and their attorneys should consider.  “We place great emphasis on finances, not only making certain that the books are current — it is surprising how many co-ops and condos have poor bookkeeping — but we also work to keep down expenses through controls as volume purchasing, careful scheduling of staff and use of the latest technology to reduce energy costs,” Meister says.

Part of this is the maintenance of the property so that all systems are kept in good, efficient working order.  If periodic maintenance of the boiler, for instance, is not maintained, the system will probably work less efficiently and use more fuel than it should.  Periodic checking of the roof is important to detect problems early to reduce the possibility of damage to apartments and to repair the problem early, before it becomes more costly.

(To be continued)

Cleaning up After Winter’s Blast

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“Though this winter has been relatively mild, it can still leave a bleak mark on buildings and their landscaping.  While New Yorkers are thawing out in March and April, our asset manager are inspecting for damage and  repairing winter’s ravishes.”, says Ira Meister, president and CEO, Matthew Adam Properties, Inc.

Areas include landscaping, terraces, the roof, windows and air conditioning, whether window units or a central system.

Starting at the entrance, we look at plants and trees and also check for salt damage to tree planters, plants and flower beds.  The city uses rock salt to melt ice, which kills off almost anything in a planter. We also check for any cracks at the entrance.

Meister says another area to check is setbacks and roof terraces for water/ice damage and to be certain the drainage pipes are not clogged.  It’s a good idea to snake out the pipes every year.

This is also the time for a general clean-up of the building and the common areas after several months of people trudging through the lobby and halls with snow and slush on their shoes and boots.

The roofs are visually checked by our asset managers and the superintendent/resident manager for any ice-caused damage and leaks.  “In fact, they make period inspections during the winter, particularly to make certain the drains are not clogged,” Meister says.

Residents should check windows and window air conditioning units for leaks to ensure maximum efficiency and arrange for vacuuming of condensers, changing filters and flushing the coils.  If the unit was removed during the winter it needs to be replaced in compliance with city regulations. .

“We instruct all our asset managers to visually inspect buildings with window units to be certain they are in compliance,” Meister says.

In buildings with central air conditioning, the HVAC unit and the cooling towers are checked with the towers tested for efficiency at least every five years. Loss of efficiency translates into significantly higher expenses.  While this benchmark is usually done in the fall, it can be done this spring if the cooling tower check has not been conducted for five years.

“While our asset managers and superintendents/resident managers continuously inspect a building during the year looking for potential problems and areas needing repair, we urge resident to be alert and let us know if they see something that needs attention,” Meister says.  “For smooth building operations and to reduce costs, it is much better to find a problem before too much damage has been caused or when damage can be averted.”

The New Generation in Co-Generation

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“There were many lessons learned from Hurricane Sandy.  For example”, says Ira Meister, President and CEO Matthew Adam Properties, “we learned that hi-rise buildings are not immune to power outages caused by flooding that can affect a single property or a wide area.  When this occurs, a separate back-up generator is needed to maintain power, but that is expensive.  Now, however, there is a way to have a continuous operating back-up in a system aligned with a co-generation.”

The back-up generator called “Black Start” is produced by Tecogen, a leader in the field of co-generation.  Matthew Adam Properties is working with Tecogen to evaluate the installation of co-generation in several buildings it manages.

Peter Goldsmith, Field Sales Specialist, Tecogen says. “Since Sandy, we’ve been getting at least a call a day inquiring about ‘Black Start.’”

Originally, co-generation involved using the steam produced by boilers to power generators in buildings. This, however, required electric power to keep the water heaters and boilers operating.  Meister says the Tecogen system his company is exploring (called CHP, “combine heat and power”) generates electricity using a natural gas-fueled engine, which immediately reduces electrical consumption. Natural gas is cleaner and more efficient than oil and less costly than oil or steam.

Meister says that while working with Tecogen the company explained how CHP could be used to provide energy in the event of a blackout or situations such as occurred with Hurricane Sandy when flooding caused Con Ed to lose power in much of Manhattan below 40th Street.  Rather than having a separate generator which would be costly and dependent on having sufficient fuel to operate, the emergency generator component of the co-generation system runs continuously and can be utilized for an emergency, though not at full power.

There are financing incentives through NYSERDA (New York State Energy Research and Development Agency) that can reduce the initial costs.

During Sandy, a large residential co-op in southern Manhattan benefitted from having the Tecogen co-generation system with the back-up generator. When Con Ed cut power, Tecogen’s proprietary inverter and microgrid technology continued to provide power for the building.  The system powered the entire building and ran 24/7 under computerized control from an off-site monitoring station until power was restored by Con Ed.

Matthew Adam Exploring Co-Generation for Properties It Manages

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Co-generation, the reuse of energy to power systems, has been around for a while in a variety of forms and uses, notes Ira Meister, president and CEO, Matthew Adam Properties, Inc.   It has gained increased interest in the past decade with the expansion of efforts to reduce global warming, enactment of stricter government regulations and the desire to control skyrocketing energy costs in larger buildings.

Matthew Adam Properties, a leader in bringing “Green” initiatives to the properties the company manage, has instituted a program to evaluate the installation of co-generation in several buildings, Meister says. It has been working with Tecogen, a leader in the field of co-generation.  The company is currently performing financial feasibility studies at several buildings. Initial findings indicate Tecogen’s natural gas system can reduce carbon emissions and costs.

“While still in the preliminary stage, the study indicates we can reduce a building’s electric bill by 50 percent, in addition to savings in heating water,” Meister says.

The Tecogen system (called CHP, “combine heat and power”) generates electricity using a natural gas-fueled engine, which immediately reduces electrical consumption.  Natural gas is cleaner and more efficient than oil and a less costly energy than oil or steam.

In co-generation, the “waste” heat produced by the natural gas-fueled engine is recovered and replaces fuel used to operate the water heaters and boilers.  The “waste” heat can be used in conjunction with an absorption chiller to convert the heat into cooling and relieves the chillers (typically electric powered) of providing much of the site’s air conditioning.

“When Tecogen completes its study, we will have a better understanding of the benefits of installing co-generation and help us determine which buildings would benefit,” Meister says. “We, at Matthew Adam Properties, believe that co-generation can help us resolve several issues we confront as managing agents – improving services, reducing costs and adapting ‘Green’ initiatives.”

Meister says the co-generation program is part of Matthew Adam’s overall program to use innovative thinking and a professional approach to provide quality management for the buildings in our portfolio.   The “Green” efforts are spearheaded by our Sustainability Division headed by Kendra Stensven.  Kendra is LEED certified, making Matthew Adam Properties one of the few, if not the only, management company with a LEED certified person heading a “Green” division

Ira Meister Honored by Young Jewish Professionals

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Ira Meister, founder and president of Matthew Adam Properties, Inc., a premier residential management firm, was among three real estate leaders honored by the The Real Estate Division of Young Jewish Professionals.  The award was presented at the YJP Real Estate Summit attended by more than 250 at the Chelsea Pearl in Manhattan.

Meister received the Real Estate Deal Maker and Achievement Award for Matthew Adam’s successful intern/mentoring program.  Started 12 years ago with students from Baruch College of the City University, it has since added students from the Stern School of Business at NYU.  Those chosen for the highly selective program work part-time in their area of interest and receive a small stipend.  Students in the program, Meister pointed out, often receive offers for full-time employment at Matthew Adam or other real estate companies.

“Several factors have led to the success of this program,” Meister said.  “First of all, we give the interns real work to do and as they show their capabilities we can give them more responsibility.  Secondly, we provide a small stipend so they know we put value on what they are doing.”

Meister noted that the program accepts only a few interns at a time and that each is assigned to a mentor.  “In this way,” Meister said, “the intern feels connected to the work he or she  is doing and can get guidance. They do not feel isolated.  The intern also gets to see if this is the career path he or she wants to follow.  It’s a marvelous learning experience and also gives us a fresh viewpoint from young, bright and talented people.”

Honored by YJP with Meister were Stephen A. “Chip” Weiss, director of finance and development at Flintlock Construction Services, and Michael Stern, founder, JDS Development. Weiss was honored for the innovative approaches to construction he has developed which are raising the quality standard of construction.  Stern received the award for the plethora of new developments his company is building in New York.

The event featured a panel discussion on current real estate issues moderated by Marty Miner, Partner, Holland & Knight.  On the panel were: Ken Bernstein, president and CEO, Arcadia Realty Trust; Michael Cohen, President Tri-State Region, Colliers International NYC LLC; David Kramer, Principal, Hudson Companies, Inc; and Emanuel Stern, President & COO, Hartz Mountain Industries, Inc.

Why Co-ops and Condos Pay Higher Property Taxes

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Much has been written and discussed in recent months about the failure of the New York State Legislature to extend the property tax abatement for co-ops and condos, notes Ira Meister, president and founder of Matthew Adam Properties, Inc., a premier property management firm.  The discussion has focused on the failure of the legislature to take action during the session that ended in June and the need to make permanent the abatements, which have been authorized with continuing legislation since the late 1990s.

The city included the abatement in the tax bills due on July 1 of this year and again on October 1, assuming the legislature would take positive action in an anticipated special session after the election.

The impact of the abatement is not insignificant. “There are approximately 365,000 co-op and condo units in the city and the city estimates the abatement would save these taxpayers about $430 million or $1,194 per unit,” Meister said.

Condo owners pay the property tax directly to the city.  For co-op shareholders, the tax is included in the monthly maintenance charges.

The property tax is based on the assessed valuation of a property.  “Here, is an issue that has been pushed into the background and is another quirk in the system that works against co-ops and condos,” Meister explained.

To the average voter it would seem that the entire New York City legislative delegation would be pushing to have the abatement passed.  But, Meister said, this is not the case and he attributed this to underlying factors. Most noticeably is the city’s practice of categorizing co-ops and condos as profit-making corporations. The city has four classes of properties and taxes co-ops and condos similar to rental properties, rather than as single family homes. “The difference is dramatic,” Meister said.

To determine the assessed value, the city applies a complex ratio to each of the four categories. For example, a single family home valued at $1 million has an assessment ratio of six percent and the assessed valuation would be no more than $60,000.  For a condo or co-op, the ratio is 45 percent and the assessed value would be no more than $450,000.

“The net result is that the condo owner or co-op shareholder is paying nearly six times more than a single-family owner,” Meister said.  “That hurts.”

A change would require a request to Albany from the City Council, Meister explained, where the majority of councilpersons represent owners of smaller properties who do not want the imbalance corrected.

Young Women Encouraged to Consider Careers in Property Management

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Over the past several decades, an increasing number of women have joined the ranks of property managers, notes Ira Meister, President and CEO, Matthew Adam Properties, Inc., a premier residential management firm.

One of the best is Kristen Storino, a Senior Asset Manager at Matthew Adam Properties, who has worked as a construction project coordinator as well as a property manager.

Meister said Kristen was asked to speak as part of an innovative mentorship program organized by the Professional Women in Construction to encourage young girls in New York City to consider opportunities in non-traditional, male-dominated professions such as construction and property management.

Kristen spoke to some 30 freshman and sophomores at the Bronx Design and Construction Academy.

“I shared my experiences, struggles and strengths as a young women starting out in general contracting, “Kristen said. “My journey has transitioned me into property management, but construction had always been the base from where I started.”

Kristen described her responsibilities and the talents and characteristics that make for a good property manager.

“Residential property must be taken care of from both a physical and a resident-relations standpoint, and that is what a property manager does,” she told the group. Kristen said she maintains and upgrades facilities while acting as liaison between the board of directors and the residents. She is responsible for a number of properties and “the job can involve frantic work, unusual hours, and extremely difficult schedule coordination.”

“It takes strong communications skills, strong organizational skills, and a flair for numbers,” she said. As property manager she has the most client contact when disasters occur, such as a flooded basement, leaking roof or heating system breakdown. This can be daunting for those who don’t perform well in crisis situations, she said, but she finds the more she anticipates potential problems and prevents them, the fewer there are to deal with.

The best feature of the profession is the chance to work with a variety of people on a number of different tasks. “I never know what my day’s going to be like. It’s a race to keep on top of everything. I love it.”

While property managers spend a lot of their day dealing with paperwork and talking on the telephone, the problems they deal with vary greatly from week to week and month to month, giving most property managers a sense of creative challenge that keeps the job fresh.

Ira Meister on Benefits for Complying Early on Local Law 87

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While the deadline is tight for owners and property managers to comply with Local Law 87 in 2013 which would extend the deadline for the next mandated auditing and retro-commissioning, there are other benefits for complying early, says Ira Meister, President and CEO of Matthew Adam Properties Inc., one of New York’s premier management firms.

To encourage early compliance with the law, Meister says, the legislation created an incentive where any building completing the audit and retro-commissioning by the end of 2013 could postpone another round of auditing for 10 years after the date assigned. Reports are required based on the last digit of the tax block number. For example, buildings with the last digit of 3 are required to file in 2013, with 6, in 2016. The later a building is required to file, the more advantageous it is to comply in 2013. Those buildings whose tax block number is 2, would be required to file in 2022. But, if they comply in 2013, the next mandated compliance period would not be until 2032.

The heating requirements of the re-commissioning require analysis be conducted during the heating season, which ends in March, creating a tight deadline, says Brian King, president and CEO, Ecological LLC, an environmental sustainability company.

However, further motivation to file early, Meister says, is provided by incentives offered by NYSERDA and other groups to improve the energy use in buildings. Changes to the incentives or a lack of funds may make them unavailable in future years, says King.

The legislation requires large buildings to conduct an energy audit every 10 years as well as a retro-commissioning study. “The energy audit is to identify areas where energy and cost savings could be implemented, though not mandated,” Meister says. The retro-commissioning requires that building systems be at performance capabilities. If not, Meister points out, corrective measures are needed.

Buildings required to comply are those larger than 50,000 gross square feet, or two or more buildings on the same tax lot that comprise more than 100,000 gross square feet, as well as two or more condominiums governed by the same board that together exceed 100,000 gross square feet.

Local Law 87 is part of a package of four laws called the “Greener, Greater Buildings Plan,” enacted in 2009 to improve the energy and water efficiency of the city’s largest buildings.

Matthew Adam Properties Honored by Resident Managers Groups

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Matthew Adam Properties, Inc., its President, Ira Meister, and three executive vice presidents were honored by The Three Hands group for their outstanding contributions to real estate at a dinner at Chelsea Piers this past November 2012.
The Three Hands organizations – The Metropolitan Building Managers of New York, The Manhattan Residential Managers Club and The Scandinavian-American Building Managers Guild – represent resident managers of many of Manhattan’s premier residential properties.
Honored with the company and Meister were EVPs Harvey Greenberg, Martin Traum, and Janusz Sikora.
“Matthew Adam Properties under the leadership of Ira Meister and the three executives we honor tonight have been in the forefront of quality management in our industry as well as bringing innovative programs to improve the buildings they manage as well as the quality of life of the residents,” said Mike MacGowan, of The Three Hands. “As resident managers of many of the prime residential buildings in Manhattan, The Three Hands members know and understand the efforts and quality that Matthew Adam brings to each assignment.”
Meister accepted the award on behalf of the company and the three executives and thanked the group for the honor. “It is significant that Harvey, Marty and Janusz are being honored along with the company,” he said. “They are real professionals and are significant contributors to our companywide team effort. The honors tonight are for every one of our employees who each contribute to our success and the quality management we bring to the properties we manage.”
This is the second award for Matthew Adam Properties and Meister in the past several months. In October, they were honored by the Young Jewish Professionals Real Estate Division with the Real Estate Deal Maker and Achievement Award.
Matthew Adam Properties is a leading Manhattan-based residential management firm that brings a strategic approach to the more than 100 properties it manages in the New York area. The company also manages and serves as a consultant to retail properties nationwide.
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