Business Strategies for Real Estate Management Companies, by Richard F. Muhlebach and Alan A. Alexander, IREM, Chicago, IL, 1998.
Downgraded, denigrated and derided in the 1980s (Kleiner, 1996), strategic management is now back in vogue. The resurgence in demand for big thinking is reflected in the brisk and buoyant demand for strategy thinking and consulting services. For all the interest in strategy, many are challenged to answer with clarity and precision the question of What do we mean by strategy? Indeed, renowned strategist Michael Porter, in early 1999 observed, "There's a lot of confusion out there about exactly what strategy is," (Serowiecki, 1999).
Strategy has even found its way into managing the property management company, with Business Strategies for Real Estate Management Companies (Muhlebach and Alexander, 1998), the latest publication from the Institute of Real Estate Management (IREM). This book on the strategy of property management companies adds to the emerging literature on strategy in real estate, including considerations of a strategic perspective to investment and property development (Seldon and Swesnik, 1985), home building (Leinberger, 1993), individual compared to institutional investing (Roulac, 1995), institutional investing (Roulac, 1976), property development (Roulac, 1973), linking corporate business strategy to real estate strategy (Nourse and Roulac, 1993), the evolving corporate real estate function (Lambert and Poteete, 1998), executive compensation (Roulac, 1997) and business enterprises concerned with space and place strategies (Roulac, 2000).
Business Strategies for Real Estate Management Companies is a useful manual for managing the business of managing property. Knowing what is covered in this book is important to all involved in real estate, especially those in the property management field.
Veteran property managers, IREM teachers, leaders and authors, Richard Muhlebach and Alan Alexander present fundamental material, emphasizing nuts and bolts more than strategic, innovative thinking. The primary weakness of the book involves the use of the term strategies in the book title, which follows from the authors' employing strategies or strategizing in fourteen of the sixteen chapter titles. In fact, many specialists in the strategic management discipline would seriously question if not overtly challenge the appropriateness of employing the variants of the strategy terminology in titles of chapters that either have little to do with strategy in the classic meaning of the word and/or omit discussion of much of the rich strategy content of the subjects addressed in those chapters. Thus, Business Strategies for Real Estate Management Companies is a good, but mistitled, generic book.
Apart from some shortcomings in context, perspective and execution of the book, the authors' general treatment of the management issues of real estate management companies is sound and informative, providing lots of good material. The important contribution of Muhlebach and Alexander is to provide a foundation for executives of the property management company to manage their company.
The tumultuous change in the property management business is the vital theme that the authors address to establish the context for their treatise. Among the changes the authors cite are:
Changes in the fundamental roles of apartment and office properties and the urban form in which the properties are located;
Ownership competition as a consequence of entrepreneurial owners and the influence of workout needs and resolution, especially the Resolution Trust Company; and
New competition from developers emphasizing managing rather than creating properties, brokers adding property management capabilities and owners taking management in-house.
Although the Resolution Trust Company was disbanded in 1995 (some three years before the book's copyright), the need for specialized property-specific workout and problem resolution capabilities for troubled properties is not a short-term phenomenon. …