SITUATION
In 2009, Lee & Associates Management (“L&A”) assumed the third-party management of 648 Broadway, a 10-story, 50,000 square foot commercial loft building. The property had been owner-managed for over 25 years and L&A was tasked with utilizing our expertise and implementing our procedures to address significant tenant rent delinquencies, growing vacancy rates, deferred maintenance issues, and better budgeting and cash management.
STRATEGY
Immediately upon commencing with the management of this asset, L&A instituted a building-wide improvement program including a full assessment of the staff resulting in replacement of key personnel, a comprehensive lobby renovation – with a digital lobby directory, modern glass and stone design that attracted prospective tenants and brokers to this NoHo location. We also undertook deferred maintenance projects, preventive maintenance measures, and major repairs to the roof, façade, and fire escapes; upgraded bathrooms, and designed and managed an electrical distribution upgrade. Currently, we are in the early stages in implementing an extensive three (3) car elevator modernization project.
OUTCOME
Within eighteen (18) months of assuming this asset and the implementation of L&A management and commercial leasing programs, the financial condition of the building vastly improved. Revenue was up as a result of increased rental rates and occupancy, which reached nearly 100% occupancy, and effective rent collection procedures. In addition, operating costs were controlled through renegotiation of service contracts. The family-owned asset now enjoys significant and consistent cash distributions.