The term centralization has become one of the hottest buzzwords over the past few years. But what does it really mean, and why is it important to successful operations? Expert panelists took the stage for the Apartmentalize 2024 session, “Democratizing Centralization for Large and Small Firms,” to discuss how centralization can be of value to organizations of any size.
Session moderator, Sunny Junjea, founder and CEO of Canopy Analytics, immediately noted that centralization is not only possible for any property management firm regardless of size, it is vital to its success.
“Property success depends on resident satisfaction, and that is greatly enhanced by centralization,” Junjea said. “A big part of centralization is taking unnecessary work off of associates so they can focus on other things that are important to improving the living experience and retaining residents.”
While firms may vary in size and reasons may differ for striving for centralization, it ultimately comes down to three things: Meeting client needs, being more cost-effective and becoming more operationally efficient.
“Our firm is a third-party property management company, and we had an ownership group ask us about centralization and how we can be more cost-effective,” said Lucretia Kumah, Senior Vice President for Bozzuto. “Client motivation was a huge factor in our drive towards centralizing operations and as a customer service-focused organization, it allowed us to shift our attention to resident needs.”
For David Thomas, Director of Innovations for Veritas Investments, having a small firm and seeing the need to be vertically integrated is what made centralization an appealing goal. Additionally, it has allowed him to encourage his associates in their own careers.
“As we went on our centralization journey and began automating certain things, we wanted to make sure our associates knew they are not being replaced and we were empowering our team to grow in their career,” Thomas said. “Freeing up our leasing coordinators also gave them more time to make the leasing process and move-ins more resident focused.”
Panelists emphasized the importance of communication in centralization. When a portfolio consists of multiple properties, management companies can truly capture a prospective resident’s needs and find them the perfect home.
“Successful centralization depends on the partnerships we have with proptech companies and establishing clear communication,” Thomas said. “It is crucial to have access controls for multiple properties in one location. In fact, we found that if we showed prospects eight properties, rarely did they select the initial one they inquired about. Without centralization, we may have lost those leads to a competitor.”
Kumah echoed those sentiments.
“Technology has allowed for better overall management of all our properties,” Kumah said. “Communication at every turn is imperative to achieving centralization. For prospects, we can cross-reference properties to find them the right home. For property managers, we can compare multiple communities within a portfolio and improve key operational tasks such as those involved with maintenance and accounting, while boosting the number of tours and leases signed.”
Another benefit for Bozutto, perhaps the most important, is that the company has seen a decrease in delinquencies and an increase in retention rates.
“We found that residents really embrace our centralized system,” Kumah said. “Not only are delinquencies down by as much as 11% at some communities, but retention rates are around 62%, well above the industry average.”
As technology and automation continue to lead the charge toward centralized property management, panelists stressed the opportunities it presents to optimize operations and offer associates specialized training. From data collection and analysis to streamlining leasing and maintenance teams, centralization is key to community success.
Andrew Ruhland is an Account Executive and Content Writer for LinnellTaylor Marketing.