The following interview was conducted on October 18, 2019 at AthenianRazak, a multidisciplinary real estate services firms that creates, manages and advises on real estate.
Interviewee: Jackie Buhn, President & CEO of AthenianRazak.
Interviewer: Darcy Anders, Associate Project Manager at AthenianRazak
Darcy Anders (DA): “If you were to describe how you generally understand asset management, describe it to a complete layperson, like our intern, how would you give an overview?”
Jackie Buhn (JB): “I see it in two different groups: one is people who manage portfolios of real estate assets for investors like pension funds — they essentially make buy-sell decisions on assets, invest-divest. The other is people who are managing buildings that are owner-occupied, usually by an institution; colleges, hospitals, and users like that.”
DA: “Alright. For the institutions that are owner-occupied, how would the owner of that building go about assessing whether or not they need to do upgrades and forming a multi-year plan to not just maintain their building but improve it and keep it up to date with the current market? Depends on the institution?”
JB: “They would probably compare their facility to competing facilities to understand the comparative value of the real estate to their operations. Presumably with an institution they’re going to be doing something that uses the real estate as a service. They’re going to be looking at their mission and seeing if the real estate is serving their mission. If they’re a school, for instance, they might ask if these labs are good enough for what they’re trying to teach.”
DA: “Is that the core of most the challenges you see owners occupying their own buildings face? Making sure their buildings are staying current with their mission?”
JB: “We mostly work with people with problems of course. You would hope that is what asset managers are thinking about! A lot of times people equate the buildings with the institutions, so things get a little out of date, and we’re human beings so we often don’t like change. There’s a lot of change going on in how we get things done with computers: everything has changed in offices, schools, hospitals in the last fifty years. Asset Managers might be asking if their buildings are supporting the best way to do things. People need to reassess this all the time, every few years at least, and ask whether their buildings are supporting them in a way that furthers their mission. If the building is not, what do they need? Do they have excess assets that could be put to better use? A lot of times an institution may have land that they are not using, which could be used to support their mission. That’s often when we get called.”
DA: “You mentioned how automation is making processes more efficient. What process in particular in building maintenance do you see improving in the last ten years that people should probably reassess if they have not?”
JB: “There’s the whole change to portable work and getting rid of offices, and most institutions have begun to engage with that. How we access the internet and talk to each other: buildings need to have accessible and reliable communications. Climate control has changed a lot. Hopefully we’re starting to reverse the tendencies that began with the industrial age to be wasteful with energy, and to focus on more effective passive solutions like insulation. Certainly, one would want to be assessing one’s portfolio in regard to its sustainability.”
DA: “So let’s say an institution is looking to do an assessment and create an improvement plan. What would be the first step in that process?”
JB: “Assuming they have a clear mission, they might hire an architect to clarify what facilities they need to support the activities they want to engage in: their program. They need to determine what they need from their real estate and then compare that to what they have. The program is largely created by talking to people, the end-users, to learn what they need.”
DA: “If an institution were going to expand, have construction onsite, and keep operations in place, how would you manage a process like that?”
JB: “Well, hopefully you wouldn’t exactly do construction in an area of active operations; you would move operations in phases to avoid construction. Even this is quite disruptive. We did a very successful process once for court administrative offices building their data center.
DA: “What made it so successful? What was the key?”
JB: “We made clear, staged plans and worked with move and change management people to ensure that all the people understood the process, the moves, and the goals. We minimized the number of moves and complexity.”
DA: “What has been one of the biggest mistakes you’ve seen people make?”
JB: “We were working with a county government, doing some major renovation and restacking, and they suddenly realized a large branch outside our scope had a lease that was about to run out. We were able to get temporary quarters and get new space negotiated and built quickly.”
DA: “How would you recommend being proactive with regular assessments when it is so easy to be in the pattern of being reactive and always putting out fires?”
JB: “If you’re in the middle of fires, make the extra effort to find their root cause and make a plan to solve that. To start getting things on an even keel, make sure you have a robust (and realistic) preventive maintenance system and that it is actually being completed. Refine your processes and consider your team: you need the right people for the jobs.
One of the things managers spend their lives doing is restacking. They move this group to here, and that group to there, and this one individual needs a different office, etc. Ideally, your institution has some type of master plan and overall direction in place so that managers can ensure that the little moves are in alignment with the big picture, or at least don’t preclude it . We were brought in once to a civil service branch where a large open space had over time been built up with high cubicles at the whim of various groups and individuals, so that eventually no one really knew who was lost in the maze. We got to re-program that under a new leader.”
DA: “Speaking of whims, how would you go about managing expectations of employees or the end-users?”
JB: “Listening to them is a good start. Find out if there’s a set of workers that need quiet or something similar and try to understand the fine print about what their work really needs. Help them understand how their efforts contribute to the overall institution’s work.”
DA: “How do you pull the relevant information out of the end-user when they might not know it themselves?”
JB: “Ask about their regular activities and break down all of the processes they do. This can be frustrating because you often see a lot of redundancy or unnecessary work and you can’t redesign it all. But do keep asking why, you may be able to simplify some things.”
DA: “Everyone is always concerned about spending money on something that turns out to be a fad. If you have a client come to you with that question, are these improvements a fad or will they add real value to our asset, how would you help them?”
JB: “Because we live in the middle of these fads, it’s hard to tell! Moderation and diversity help: both diversity in opinions of what it should be and diversity in the product. Open plan or closed office? You may need a little of both. You need to have different options, and not expecting everyone to be the same will help.”
DA: “If you were just asked to manage a new asset or portfolio today, what are the top three assessments you would do?”
JB: “The first thing would be to compare key indicators to benchmarks: this could include anything from area per employee to adjacencies to cost of electric usage to parking spaces per employee. If something sticks out as unusual, you’ll know to investigate.
On a more subtle scale, your job is to make the assets assist in accomplishing the mission of the institution, and work on the mission is typically done by the employees housed in the asset. So, you want to know if the asset serves them: are they happy, is it easy for them to get their work done in their office or building?
Finally, you will always want to know if the facility is sustainable.”
DA: “Sustainable how? Financially? Environmentally? Socially?”
About AthenianRazak, LLC
AthenianRazak is the result of the 2011 merger between two successful Philadelphia-based real estate companies—Athenian Properties, founded by Jacqueline Buhn, and Razak Company, founded by Alan Razak. With combined resources and an integrated understanding of all aspects of real estate, AthenianRazak offers guidance and solutions for a range of property issues. Our team’s vision and expertise in hands-on construction and management along with financial structuring and strategic planning sets us apart. As consultants, we support institutions, corporations, and investors with the development and management of real estate, including mission critical space. As developers, we create enjoyable, intelligently designed, culturally significant, and environmentally responsible projects. We see the big picture up front, which saves money for our clients in the long run. We are also proud of our long-term efforts toward sustainability. Stewardship of the environment has always been a priority for us, both in terms of our business ethos—promoting viable and exciting urban density, reusing existing buildings, and providing attractive cityscapes—and our personal practices, like biking, walking, or taking public transportation to work. The same culture, pride and creativity that distinguished Athenian and Razak individually remain the core values of AthenianRazak. For more information, visit: http://www.athenianrazak.com/.