DIY Co-op: In-House Property Manager at Self-Managed High-Rise
Jon Schechter
July 16, 2013 — The past three years have been a dizzying time of capital improvements for the residents of 201 East 66th Street, a 21-story co-op at Third Avenue in the Lenox Hill neighborhood of Manhattan. The building finished a major façade improvement, replaced all its elevators, and will soon overhaul its mechanical system. Perhaps even more impressive: the board has not raised maintenance fees to pay for the work, although it did levy an assessment. The secret to the building's success lies in an unusual combination of cheap debt, a hands-on board and in-house management.
Unlike most large Manhattan buildings, this 256-unit co-op is self-managed, meaning it does not employ an outside company to handle its business. Instead, the property manager works directly for the board and lives in the building, saving the co-op money on management fees and giving the board tremendous control over operations. The result? A building with a lean budget that, all on its own, has successfully completed a series of complicated and involved projects.
"With an outside management company, and a less active board, you couldn't do the kinds of things we're doing in the way that we're doing them," says Burt Spiegel, the board president, who is retired and spends about half of each day dealing with the business of the co-op.
Bringing Him A'board
Completed in 1961 and converted to co-op 20 years later, the building hasn't always been self-managed. Until 2000, executive manager Jon Shechterserved as the property manager through an outside company.
It's a collaboration; it's a
team effort. It requires
the board to roll up its
sleeves and really dig in.
But shortly after Shechter moved to another firm, the co-op board approached him with a novel idea: quit his day job and work for the building exclusively. The superintendent was leaving and Shechter needed a new apartment, so he took the post and moved in.
The arrangement saves the co-op about $100,000 a year in additional salaries — Shechter doubles as the superintendent — and voilà, the building has an in-house property manager, a luxury usually reserved for white-glove buildings (for which they pay a premium). The co-op, however, forgoes the sort of discounts that large management companies pass onto their clients, like buying goods and services at a bulk rate.
On the other hand, when problems arise, the board doesn't have to call an off-site manager who could be busy tending to one of the other properties he manages. Spiegel can just head downstairs to speak with Shechter anytime he needs him. Spiegel assists with bids, researching projects and hiring consultants. He speaks with Shechter almost daily. "It's a collaboration; it's a team effort," says Shechter. "It requires the board to roll up [its] sleeves and really dig in."
Photo by Carol J. Ott. Click to enlarge.
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