NAI Hiffman’s Dave Petersen discusses retail property management in Retail Facility Business.
Bigger & Better
By Katie Lee
NAI Hiffman Asset Management, LLC did not set out to be the biggest – but it did strive to be the best. Becoming the Chicago area’s largest property manager (according to a new 2010 ranking by Crain ‘s Chicago Business) was simply icing on the cake. Based in Oakbrook Terrace, Illinois, this global commercial real estate firm has a managed portfolio topping 53 million square feet, with 31 of those assets being retail product. Yet to David Petersen, CEO of NAI Hiffman Asset Management, LLC, the Number 1 ranking on Crain’s list means only one thing: “We have a group of clients that have trusted us with their real estate,” he says. “That’s probably the Number 1 sense of achievement there.”
To NAI Hiffman Asset Management, size is not the only thing that matters. “It’s never been about how much square footage we have,” Petersen continues. “It’s really about broadening our third-party/ownership relationship for our third-party business. While it’s gratifying to be Number 1, what’s most important is that our clients keep renewing business with us.”
Take Care of the Client
NAI Hiffman Asset Management, LLC represents the largest privately owned and nationally affiliated firm in Chicago. As a strictly third-party manager, the company manages 285 buildings for a total square footage of 53.3 million. Its affiliation with NAI Global allows the company broad access to market insights and corporate or tenant connections; the firm also boasts international scope and reach. With such impressive size, how does each individual property remain a priority?
The key ingredient is not global affiliations or access to vast international resources. The key ingredient is people. “
The key is putting together teams of people to handle the accounts and staff those appropriately, utilizing the latest technology,” Petersen says. “And where some of our competition may be downsizing and doing more with a smaller salary base, we find ourselves going countercultural. We’re keeping the skill level up, and staffing with the clients’ needs in mind, not our margin.”
The rest, he says, will fall into place. “At the end of the day, if you take care of your clients, the margin gets taken care of too.”
During the past 2 years of economic downturn, NAI Hiffman Asset Management has remained one of the few firms in Chicago that is still hiring. The company has not been forced to let anyone go, and it has not avoided motivational incentives such as bonuses and salary reviews. With this approach, NAI Hiffman Asset Management has been able to retain its best people and continues to motivate them to do their best work.
“If you keep good people in place and figure out how to manage your processes, then the client feels cared for,” Petersen says. “Even through these last few years, we’ve invested pretty heavily in some accounting and tracking software, payables tools and things like that. Part of it is just being smart about processes and never stop revisiting how you’re doing things.”
How NAI Hiffman Asset Management “does things” is intelligently and efficiently. When a maintenance or operations call comes in that involves a common area issue for the tenant, the call is logged and the appropriate vendor is dispatched. All vendor services are outsourced, mainly to local Chicago-area companies.
“Primarily we try to stay with local vendors within the geography of 100 square miles around Chicago so that their response time can be, we like to think quick, and likewise the cost of getting that vendor from Point A to Point B is less, therefore keeping our common area costs down,” Petersen explains.
For after-hours or emergency situations at NAI Hiffman managed properties, someone is always on call 24/7. “Part of keeping the tenant satisfied is that call will never go automatically to the vendor,” Petersen says. “The call will always come through to the manager of the asset, so that they’re making the decision based on the client, the owner of the asset, first, and secondly being responsive to the tenant.”
Vendor performance is evaluated on a quarterly basis by a committee within NAI Hiffman’s management group. “We have pretty significant qualifying criteria, if you will, to work with the firm,” Petersen says. “That ranges from the obvious things like reviewing financial, personal, and professional references, but we also have to make sure we are working with folks who are residents of the U.S. and checking all of the qualifications necessary from a security and background check standpoint.”
Petersen adds that his company receives calls “every 12 minutes” from vendors seeking their business, and they do see how those companies compare, but generally prefer to stay loyal to the vendors who have been serving NAI Hiffman for many years. But that loyalty doesn’t amount to job tenure. “You’re still reviewed on a quarterly basis, and performance is everything,” he says. “You lose your job if you don’t perform.”
Keeping a Promise
Within his own company, Petersen enjoys seeing others grow in their careers. “My enjoyment is seeing the folks who work for our firm rise in the organization, whether that’s in title or in responsibility,” he says. “It’s fun to watch folks ‘get it’ when they realize that we’re not just about making sure the lights are on and the parking lot is clean and the landscaping is done – and that’s all critical – but what we’re really about is understanding that this is a real estate investment for the people who own it. We’ve got to figure out a way to enhance that value or, at the very least, protect it so that their investment proves to be worthwhile.”
In property management, Petersen continues, the mission is simple: “Do what you say you’ll do, do it when you say you’ll do it, and then follow up and tell them you’ve done it,” he says, “so that you’ve completed the loop. A big part of what we do is communication, and that’s communication to the client, to the tenant, to the patrons that are frequenting the centers. Do what you say you’ll do. Keep your promise.”
And to the commercial real estate industry in Chicago, NAI Hiffman Asset Management never promised to be the biggest – but they promised to be the best. The company strives every day to fulfill that promise.