TABLE OF CONTENTS CHAPTER 1 AN OVERVIEW OF REAL ESTATE MANAGEMENT 19

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1 TABLE OF CONTENTS CHAPTER 1 AN OVERVIEW OF REAL ESTATE MANAGEMENT 19 The Profession of Real Estate Management 19 What is Real Estate? 21 The Role of Real Estate Managers 22 The Evolution of Real Estate Management 23 From 1920 to the Stock Market Crash of Recovery Period after the Great Depression, 1934 to Post-World War II, The 1940s and 1950s 25 The 1960s and 1970s 25 The 1980s to 1990s 26 The 1990s 28 The Year Effects of 9/11 on Real Estate Management 29 The Enron Scandal 30 From 2003 to The Economic Future for Real Estate Management 33 Types of Real Estate Assets 33 Residential Properties 34 Commercial Properties 35 Shopping Centers 36 Industrial Properties 37 Warehouses 37 Summary 37 CHAPTER 2 THE REAL ESTATE MANAGEMENT PROFESSION: POSITIONS AND RESPONSIBILITIES 39 Primary Responsibilities within Real Estate Management 39 Positions in Real Estate 42 Site Manager 42 Property Manager 43 Regional Manager 44 Portfolio Manager 44 Executive Property Manager 44 Asset Manager 44 vii

2 viii Principles of Real Estate Management Other Real Estate Management Professions 46 Leasing Agent 46 Marketing Director 47 Accounting and Financial Services 47 Building Engineers, Facilities, and Construction Managers 48 Facility Management 49 The Real Estate Executive 49 Brokerage Services 50 Administrative Personnel 50 Summary 51 CHAPTER 3 REAL ESTATE AND ECONOMICS 52 Basic Economics 52 The Marketplace 53 The Role of Government 58 The Business Cycle 65 Real Estate Economics 71 The Real Estate Market 72 Government and Real Estate 75 Real Estate Cycles 77 Summary 82 CHAPTER 4 TYPES OF OWNERSHIP IN REAL ESTATE 84 Means and Reasons for Investing in Real Estate 84 Means of Investing 84 Reasons for Investment 89 Principal Forms of Income-Property Ownership 94 Sole Proprietorship 95 Partnerships 95 Corporations 99 Real Estate Investment Trusts 101 Joint Venture 101 Summary 102

3 Contents ix CHAPTER 5 THE MANAGEMENT AGREEMENT AND PLAN 103 Management Agreement 104 Basic Components of an Agreement 105 Responsibilities of the Manager 106 The Owner s Obligations 111 Compensation for Management Services 111 Management Plan 112 National Analysis 113 Regional Analysis 114 Neighborhood Analysis 116 Property Analysis 118 Market Analysis 121 Data Evaluation 131 Analysis of Alternatives 133 Cost-Benefit Analysis 136 Conclusions and Recommendations 137 Summary 139 CHAPTER 6 FINANCIAL MANAGEMENT 140 Evaluation of Operating Funds 140 The Cash Flow Chart 141 Other Considerations 148 Accounting for Income and Expenses 153 Accounting Systems 153 Income Categories 155 Expense Categories 156 Management Fee and Administrative Costs 156 Payroll and Related Expenses 157 Insurance 158 Reporting on Income and Expenses 160 Accounting Software 160 Management Reports 161 Budgeting 165 Operating Budget 165 Capital Budget 169 Long-Range Budget 170 Summary 170

4 x Principles of Real Estate Management CHAPTER 7 STAFF MANAGEMENT 172 Staff Requirements 173 On-Site Staff 173 Employees of the Management Firm 175 Contractors 179 Determining Adequate Staff Size 180 Hiring Qualified Personnel 181 Recruiting Applicants 181 Selecting Employees 185 Employee Onboarding 189 Retaining Valuable Employees 191 Performance Appraisal Methods 191 Compensation 192 Federal Programs 194 Communication 194 Promoting Morale 195 Continual Training 196 Developing Talents 197 Employee Discipline 197 Employment Policies 198 Progressive Discipline 198 Employee Termination 200 Facing a Layoff 200 Dismissing an Employee 201 Employer Liability 203 Summary 205 CHAPTER 8 MARKETING THE PROPERTY 206 Marketing Properties 206 Understanding the Market 207 Developing a Marketing Program 208 Offering Marketing Incentives 218 Measuring Marketing Effectiveness 219 Using Sales Techniques 222 Approving a Prospect for Tenancy 226 Rental Collection 228 Rent Due Date 228

5 Contents xi Late Fee and Delinquency 229 Collection System 229 Eviction 230 Security Deposits 232 Retaining Tenants 233 Welcoming New Tenants 234 Handling Requests 234 Building Goodwill with Tenants 235 Lease Renewal Techniques 235 Summary 237 CHAPTER 9 UNDERSTANDING THE LEASE 238 Fundamental Elements of Leases 239 Types of Leases 240 Lease Negotiation 240 Standard Clauses 241 Concessions 244 Tenant Options 245 Other Lease Issues 247 Successful Leasing 248 Summary 248 CHAPTER 10 MANAGING THE PHYSICAL ASSET 250 Property Systems Identification 251 Schedules, Inspections, and Maintenance Tasks 253 IREM Code of Professional Ethics 255 Schedules and Inspections 255 Custodial Maintenance 259 Corrective Maintenance 262 Preventative Maintenance 262 Deferred Maintenance 272 Other Aspects of Maintenance 273 Safety 273 Protecting the Environment 274 Controlling Energy Consumption 277 Maintaining Property Security 279

6 xii Principles of Real Estate Management Managing Maintenance Work 281 Staffing Choices 281 Record Keeping 283 Summary 286 CHAPTER 11 PROPERTY TYPES: RESIDENTIAL 288 Rental Housing 289 Rental Apartments 289 Government Assisted Housing 292 Senior Housing 295 Student Housing 297 Selecting Qualified Residents 297 Rental Agreement 306 Common Interest Realty Associations 315 Condominiums 315 Cooperatives 318 Planned Unit Developments 319 The Role of Management 320 Other Residential Property 323 Single-Family Homes 323 Manufactured Housing Communities 324 Maintenance Issues 325 Unit Preparation 325 Residential Amenities 326 Insurance Issues 328 Types of Insurance 328 Choice of Insurance Packages 330 Summary 331 CHAPTER 12 PROPERTY TYPES: COMMERCIAL OFFICE BUILDINGS 333 Property Analysis 334 Class of Structure 334 Criterion for Classification 335 Tenant Selection and Criteria 343 Business Reputation and Financial Status 343 Space Requirements 344

7 Contents xiii Service Requirements 346 Office Rent 347 Measuring Rentable and Usable Space 347 Establishing Rates 350 Space Planning 351 Tenant Improvements 352 Office Condominiums 353 Medical Office Buildings (MOBs) 354 Summary 354 CHAPTER 13 PROPERTY TYPES: COMMERCIAL SHOPPING CENTERS 356 Property Analysis 357 Malls 358 Open-air Malls 259 Trade Area Analysis 363 Managing Shopping Centers 365 Tenant Selection 366 Retail Rent 370 The Retail Lease 374 Other Commercial Property Types 380 Industrial Properties 380 Warehouses 381 Lease Considerations 381 Marketing Commercial Space 382 Prospecting for Tenants 382 Marketing on Value 384 Insuring Commercial Properties 385 Owner s Insurance 386 Tenant s Insurance 387 Summary 388 GLOSSARY 390 INDEX 439