Ranking the city’s top residential managers as owners tighten their belts and industry pressures intensify
(Illustration by Yifan Wu)
Two years ago, Douglas Elliman won the Holy Grail of property management assignments: Co-op City. With 35 buildings and 15,000 units in the Bronx, the Mitchell-Lama project is the country’s largest cooperative housing complex.
Co-op City’s board hired Elliman in May 2016, more than a year after abruptly firing Marion Scott Real Estate over allegations that the company mishandled its duties. Marion Scott has disputed the claim. The co-op board, Riverbay Corporation, self-managed the complex for more than a year but ultimately hired Elliman after an 18-month search for a replacement.
“If you are in the business, there are a couple places that you want,” said James O’Connor, president of Douglas Elliman Property Management. “And I’m a Bronx guy. So it makes sense for us.”
It was that new gig — along with several new upscale condominium developments — that propelled Elliman to the top of The Real Deal’s latest rankings of the city’s biggest property management firms, which tallied companies by the number of residential units they oversee in Manhattan and the outer boroughs.
The analysis, based on data from the city’s Department of Housing Preservation and Development, showed that companies with a national presence and the resources to handle massive portfolios continued to dominate the third-party property management game.
“We’re not a cyclical business, but we do depend on volume,” said Michael Rothschild, vice president of Midtown-based AJ Clarke Real Estate, which acquired the smaller Manhattan-based firm Fenwick Keats last year.
Property management as an industry is relatively insulated from the city’s volatile real estate market; it’s rarely impacted by falling sales prices or the seemingly fickle appetites of foreign investors. But the business — which generated $81 billion in revenue nationwide in 2017, per business research firm IBISWorld — is highly competitive. And it’s becoming increasingly difficult for smaller, boutique firms to survive, especially as landlords and condo and co-op boards look for ways to cut costs.
At the same time, the job is becoming more complicated as the city continues to issue regulations that largely fall to property managers to carry out, sources in the business say.
“We’re expected to be geniuses,” said Ellen Kornfeld, vice president and partner at the Lovett Group, which has offices in Midtown and College Point in Queens. “We’re expected to know everything, but no one wants to pay for the service.”
Top of the heap
In Manhattan, many of the leading management firms are nationally known brands with multiple offices outside of New York.
Douglas Elliman Property Management, which took the top spot with 28,022 units, is part of the residential brokerage giant with 113 offices across the country. In Manhattan, Elliman scored several new high-end condo developments, including 150 Charles Street, 215 Chrystie Street and 111 Murray Street. Its parent company, Howard Lorber’s Vector Group, is an investor in the Murray Street tower, which is being developed by the Fisher Brothers and Witkoff Group.
“We get some but not all of the buildings that [our] parent company invests in, because a lot of the time they are not the majority investor,” O’Connor said. “We get what we can.”
FirstService Residential — which is based in Florida and runs its New York office out of Midtown — came in second in Manhattan with 27,680 units. The firm, which specializes in luxury condo and co-op buildings, ranked first last year.
Dan Wurtzel, president of FirstService’s New York operations, said the rental buildings the company manages — like JDS Development’s American Copper Buildings — require hotel-level amenities and services.
“The type of buildings that are now in the rental market are significantly different than what you saw 10 or 20 years ago,” he said. “The type of management that you need isn’t the old-school rental management.”
In the past decade, FirstService has acquired a few other businesses, including Manhattan-based Goodstein Management and Brooklyn-based Live Right Management.
The top 20 property management firms in Manhattan
Midtown-based AKAM Living Services, which also has operations in Florida, ranked third with 26,799 units, while Halstead Management, a subsidiary of the national corporation Terra Holdings, came in fourth with 16,267 units. AKAM President Michael Berenson noted that the parent companies of the firms that ranked first and second this year are both publicly traded and that both Douglas Elliman and First Service are comprised of several other companies.
“I think it’s noteworthy that we built our company with no mergers or acquisitions,” Berenson said.
Charles H. Greenthal Company, a family-owned firm located on Park Avenue and 34th Street, rounded out the top five with 13,684 units. Representatives for the company declined to comment.
In the outer boroughs, many of the same companies dominate, but a larger number of top property management firms specialize in affordable housing. That market is notably bigger in the Bronx, Brooklyn and Queens.
Elliman also ranked first in the outer boroughs with 28,247 units. FirstService came in second with 25,622 units, followed by two Queens-based companies that focus on affordable housing management: Metro Management Development with 20,556 units and Wavecrest Management with 15,514 units. AKAM took the fifth spot in the boroughs with 11,023 units. Representatives for Metro Management declined to comment.
“For us, in the affordable world, it’s a real boost and can be a life-changing experience,” said Susan Camerata, Wavecrest’s chief financial officer. “There’s such a need for housing in the city, and an even greater need for lower- and middle- income housing.”
Shedding resi units
For the most part, this year’s ranking closely follows 2017’s, with a little shuffling among the top management firms.
But more than half of the top 20 companies in Manhattan lost apartments in the past year. Halstead logged the biggest loss at 15.8 percent, or 3,046 units. Gumley Haft saw the second biggest loss with a 11.9 percent year-over-year decrease, or 547 units.
Some of the leading firms in the outer boroughs also saw losses. FirstService saw the biggest drop with a 7.83 percent year-over-year decline, or 2,178 uni新上海贵族宝贝论坛