Properties in transition are an important source of all this new business, as the owners of these properties increasingly seek outside expertise to assist with the complexities of repositioning. Among others looking for management help are those dealing with distressed assets, such as special-servicers. “There is a lot in the news today about retail bankruptcies and store closings, but we have seen that for decades, in different cycles, and we know how to deal with it,” said Matthew Harding, president and COO of Plainfield, N.J.–based Levin Management Corp., which manages nearly 13 million square feet of retail properties in the Northeast. One shopping center currently under the firm’s management is undergoing demolition of an obsolete building. “At the end of the day, we’re going to have a much better property, but there is a lot involved in that,” said Harding. “You really need a strategic vision. 

Then there are those purchasing underperforming properties from REITs. “That’s a great opportunity for third-party managers, because most entrepreneurial buyers don’t have in-house property management staff,” said Karen Raquet, a JLL executive vice president who is director of the firm’s national retail property services unit. “It is about gaining internal efficiencies and outsourcing management when owners don’t have an internal platform, which is costly and challenging to build.” JLL recently picked up two new management assignments: one for Citadel Mall, in Charleston, S.C., and the other for Sherwood Mall, in Stockton, Calif. Both of these are considered “value-add” properties that could be repurposed, and both need a manager with repositioning expertise. “Cost is always a factor, but right now it is really more about value-add strategies and the ability to reposition properties,” said Raquet. JLL currently manages about 92 million square feet of retail property in the U.S.

Property management firms no longer focus solely on such basic tasks as hiring vendors or paying the bills. Over the past decade they have increasingly become involved in other facets of asset management. Clients want accountability, comfort and trust now, as well as guidance and strategic advice for navigating the current marketplace, says Harding. “You really need a longer-term strategic vision for properties,” he said, “whether it is repositioning a center or reworking space that you have gotten back from a tenant.”

Managers are more involved in creating strategic business plans specific to each asset, and which mirror a client’s goals and objectives, Solanki says. They oversee leasing, marketing, social media and construction management, among other things, in an effort to create a detailed plan for the coming year, she says. These managers apply technology to communicate with clients, provide benchmarking metrics and formulate engaging market campaigns. “Our retail property managers spend a good chunk of their time really looking at how to connect with the consumer in their community and evaluating their competition in the marketplace,” Solanki said. The goal is not merely to promote an event or a single retailer, but also to boost repeat traffic, dwell time and cross-shopping opportunities, she says.

Clients are also requiring that property management firms have expertise across other property types — restaurants, hotels, health care, office and transit. “We are in an era where properties that are being repurposed are more mixed-use rather than single-use properties,” said Raquet. 

To hone manager skills, firms offer training and best-practices sessions. Colliers holds monthly calls to discuss new initiatives and client expectations and to share experiences. One Colliers manager at an urban retail center in Southern California recounts that he began sending the property owner videos of walking tours through the center. “The client loves it,” said Solanki, “because he doesn’t have time to go down and visit, but he gets a quick snapshot.” 

Competition among third-party management firms is fierce, so they will have to be prepared to bring much to the table — including knowledge of such nontraditional areas as sustainability, emergency preparedness and social-media marketing, along with the traditional accounting and financial reporting platforms. And they must also be able to evaluate markets for such things as demographic data, the demand for a given tenant type and more. Tenants, too, are increasingly expecting such things as turnkey store build-outs. 

“As there are fewer and fewer retailers out there looking for space,” Harding said, “it is more important to be able to be responsive to those retailers and have those properties be the best they can be in that market.”