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coverstory Photograph by F. E. Higgins 26 Canadian Apartment Magazine Briarlane takes on new partners Senior Executives Acquire Shares in the Company By Randy Threndyle coverstory Founded by company President Brad Smith, Briarlane Rental Property Management Inc. recently announced that four senior vice-presidents, Susanne Maguire, Monish Comar, Patricia Brawn and Andrus Kung have become partners in the firm. Briarlane Rental Property Management, a privately-owned third-party property management company, recently announced a change in the ownership structure of the company. Four senior vice-presidents who had been with the company for many years will now become partners, or partial owners of the business. They are: Susanne Maguire, Briarlane’s Vice-President of Marketing and Administration; Monish Comar, VicePresident of Finance and Controller; Patricia Brawn, Vice-President and General Manager; and Andrus Kung, Vice President Operations and Commercial Properties. Founded by company President, Brad Smith in 1998, Briarlane manages about 9,000 rental units, as well as 800,000-square-feet of commercial, industrial and retail space. Most of the properties the company manages are in the Greater Toronto Area, with properties as far west as London and east to Oshawa. Smith, who will remain as President and majority owner, says the decision to bring the senior management team into an ownership position in the company was done to benefit the company’s clients and to ensure continuity. The company’s clients, he says, will benefit from the restructuring as they will be assured that the same management October 2008 27 Photograph by F. E. Higgins coverstory From left to right: Monish Comar, V.P. Finance & Controller, Susanne Maguire, V.P., Marketing & Administration, Brad W. Smith, President, Pat Brawn, V.P. & General Manager, Andrus Kung, V.P. Operations & Commercial Properties “Our clients are happy to hear that we have put things in place and all of the key people are going to be here for years and years.” team will be in place for many more years. Clients with large portfolios, he says, were concerned that if he decided to retire they might be forced to find a new property manager. “You can image if you own several thousand residential rental units, it’s a big undertaking to decide who will look after them and how they will be managed.” Since the company’s clients were happy with the way the current management team was handling their properties, ensuring that those people remained would secure the company’s future. “Our clients like my key people, so the best thing to do was to make my key people partners in the business, most of whom are much younger than me,” he says. “Our clients are very happy to hear 28 Canadian Apartment Magazine that we have put things in place and all of the key people are going to be here for years and years.” Under the terms of the partnership, which became effective September 1, Smith remains as the company president and the majority shareholder. Over time his share position will decrease and the partners will become equal shareholders. Several of the new partners have worked with Smith for many years, some at other companies. Smith, who is 54-years old, began his career over 30 years ago gaining property management experience at Cadillac Fairview Corporation where he was involved in managing the company’s portfolio of regional shopping malls. At Highmark properties he handled a large portfolio of residential, commercial, retail, office and condominium properties. Susanne Maguire is Briarlane’s Vice-President of Marketing and Administration. Maguire’s background includes experience in the management of a variety of rental residential and condominium properties situated within the Greater Toronto area. Maguire has been instrumental in developing many of the administrative and computer systems currently in use within Briarlane. Monish Comar, Vice-President of Finance and Controller, is a Certified General Accountant and graduate of the University of Toronto, Monish has many years of accounting and financial experience in the residential, commercial ESO`S^`]cRb]PSO^O`b]TbVS0`WO`ZO\SbSO[ 0SabeWaVSaT]`Q]\bW\cSRacQQSaa mercor LIGHTING GROUP B'#%!&$$4'#%!&$$" %=`b]\O1]c`b1]\Q]`R=\bO`W]:"9!; eee[S`Qc`gZWUVbW\UQ][ coverstory Photograph by F. E. Higgins and retail property management sectors. Prior to his five years leading the finance and accounting department at Briarlane, he held positions with Tridel and Oxford Properties. Patricia Brawn, the Vice-President and General Manager of Briarlane, has worked in the property management field directly with Smith for over 20 years. Patricia has been instrumental in attracting excellent site staff and standardizing procedures at company-managed properties. She also works to ensure that the services offered by the company are consistent and of high quality. Andrus Kung, Briarlane’s Vice President Operations and Commercial Properties, has a comprehensive knowledge of both commercial and residential management, gained over the last 15 years. An honours graduate from the University of Western Ontario, Andrus also holds a Certified Property Manager (CPM) designation. This formal training, combined with years of experience, has been instrumental in allowing him to implement maintenance and management procedures at commercial 30 Canadian Apartment Magazine properties. His work has protected client investments while at the same time maximizing revenues. Kung is noted for working with owners to design and implement capital work plans that prepare the client for the future. Commenting on the new ownership structure Smith says: “We wanted to ensure continuity and make sure there are people here who can look after our clients. It also allows me the potential to retire at some point down the road.” Continuing the current management structure will help with the company’s philosophy of building enduring client relationships by offering sound advice and effective management strategies. Briarlane’s senior executives, says Smith, know that the key to effective property management is not the size of the management organization, but rather its ability to recognize that each property has its unique characteristics. The team, he says, delivers its service in a personalized fashion using highly qualified and experienced personnel. Smith says much of the company’s success is due to the fact that the company is strictly a third-party property manager and does not own any real estate other than its own office building. “Our clients like the fact that we don’t have any conflicts of interest. We’re not competing with them in acquiring property or cutting special deals for our own properties,” says Smith The company’s clients, he says, are often multi-generational family-run businesses that need a third-party property manager who can handle the day-to-day operations of the business. “There’s a lot of day-to-day grind in what we do. We’re responsible 24/7 for toilets and all other repairs,” he says, adding “If you’re an owner/operator it can be quite overwhelming to have to do all these things yourself.” There is also the acquired knowledge gained from running a large portfolio efficiently that smaller individual owner/operators can rarely achieve. As a third-party property manager, Briarlane has the staff to handle the complex issues that face many property owners. Many clients, says Smith, feel that their time is better spent “managing the manager” and freeing up their time to look for Century Building Restoration Inc. is proud to present you with the highest quality of services and workmanship concerning building restoration available on the market. Being in this business for over 25 years we have established a solid leadership and a sound relationship with our clients, customers and suppliers. 86 Ringwood Drive #205 Stouffville Ontario L4A 1C3 Tel: 905-640-7773, Toll-Free: 1-866-640-7773 www.centuryrestorationinc.com [email protected] coverstory new business opportunities. And, when clients find a new property, the Briarlane management team is able to quickly and effectively turn an underperforming property into one that benefits the owner’s portfolio. One such property was a 150-unit building in on Glen Erin Drive in Mississauga Ontario. The building was purchased by Osgoode Properties, an Ottawa-based company owned by Stephen Greenberg. When Greenberg purchased the property in 2005, 46 suites or over 30 per cent of the building was vacant. Since the building was Greenberg’s first purchase in the Toronto area, he set about finding a local property manager to renovate the property and increase its profitability. Smith, who was introduced to Greenberg through the real estate agent involved in the sale, says Briarlane won the management contract based on his references and a list of recommended property improvements that he and his staff prepared. “What we recommended was exactly what Stephen wanted to do, so we hit it off right away,” he says. Improved Security Among the first improvements was a better security system for the building. All the locks in the suites were re-keyed and a key fob system was introduced to improve security in the common areas and entrance of the building. The key fob entry system works using a proximity reader, so residents don’t have to actually put the fob into the door. The reader detects the fob and lets tenants into any area they are entitled to enter. If, for instance, they don’t have underground parking, they can’t get into the garage, but if they are paying for parking, they can get into the garage. The key fob registers on Briarlane’s computer, so the property managers can keep track of everyone who comes into the building, what time they entered and where they went. The key fobs increase resident security as, if someone moves out of the building and doesn’t return their key, that key fob can simply be eliminated from the system, rendering it inactive. “It eliminates the problem 32 Canadian Apartment Magazine where we don’t know where all the keys to the building are and it makes the building much more secure,” says Smith. In addition to controlling the parking areas, the key fobs also give residents access to the main entrance doors and the laundry room. To further increase security, cameras were installed at the all the building entrances, in the parking garage and in the elevators. Cameras also record everyone who enters the lobby or the laundry room. “If you come into the building, you’re on camera,” says Smith. To further increase security in the laundry room a card payment system was put in. It allows residents to pay for laundry services by simply loading the card with a set amount of cash. The card can then be used to operate the machines. Not only does that increase resident convenience, it also reduces theft as there is little or no cash in the laundry room. The fire alarm system, which dated to the 1970s, was also replaced. Under current fire codes, new fire alarms have to meet audibility levels in every room. Since the fire alarm system couldn’t be upgraded to meet the new standards a decision was made to replace it. Smith says the renovation also included improvements to many resident facilities like the laundry room, which got new high-efficiency machines and new decorating aimed at making it a pleasant and clean place for residents. The laundry room now has new countertops and cabinets, as well as a sitting area. A community social room, which had deteriorated into a junk storage room, was also cleaned up and made into a Congratulations Briarline Property Management! coverstory “You don’t run into that many golden opportunities to do such an easy conversion.” room where tenant functions can be held. New ceramic floors, cabinets and window blinds were added at a cost of about $11,000. The hallways and other common areas also got a makeover. In many cases that meant repairing drywall and replacing ceiling tiles. As well, new ceramic tile and baseboard was installed in the elevator landing areas on each floor. With new carpets, paint and chair rail the hallways are now decorated to the same quality one would expect to find in a condominium, says Smith. New indoor and outdoor common area lighting was installed by Mercury Lighting Limited. The new lighting both improved the look of the building and lowed energy costs. It included lighting in the corridors, stairwells, elevators and the indoor and outdoor parking areas. The energy-efficient lighting is expected to save over $14,000 per year. Inside the suite, lights were replaced with new energy-efficient fixtures. Improved Curb Appeal Outside the building, a number of upgrades were undertaken to improve the building’s curb appeal. That involved installing a new tile floor at the front entrance and making landscaping improvements. With this building, however, there was a challenge not normally faced by property managers. In this case, the main entrance to the building does not face the street. The building’s front entrance is located on the east side of the building, but the main road, by which residents enter the property, is Glen Erin Drive, which is on the west side of the building. To someone driving by, the back of the building looked like the front entrance. Adding to the problem was the fact that the garbage bins sat in what looked to potential residents, like the front of the building. To solve the problem Briarlane built an enclosure to hide the garbage bins and improved the landscaping to make the back entrance more appealing. “Now the back entrance looks as nice as our front entrance, even though our front 34 Canadian Apartment Magazine coverstory entrance is still on the other side of the building,” says Smith. Inside the suites Briarlane undertook a number of upgrades aimed at improving the quality of the suites and addressing a long list of in-suite deficiencies. Insuite maintenance, says Smith, had not been kept up-to-date and in many cases, residents had given up on asking for repairs. Since the building had a number of vacancies, Briarlane began by refurbishing those suites and doing the rest on turnover. In occupied suites, where a complete overhaul is difficult, repairs were carried out to bring the units back to proper standards. On turnover, suites are given new bathroom fixtures and tub surround and kitchens get new countertops and ceramic backsplashes. The kitchens also get ceramic floors and new appliances. The upgrades, says Smith, are meant to bring the units to condominium quality. Using ceramic tile, he says, is only a little more expensive than vinyl tile and has the advantage of looking better and lasting longer. He estimates that about 85 per cent of the suites have been renovated in the past two years. In one area, Briarlane was able to dramatically increase the building’s revenue. On inspecting the building the company found that 13 floors in the 14-storey building had an empty room opposite the elevator landing. The rooms, which had balconies but were otherwise vacant, had apparently been set aside for storage. Instead they had sat unused and collecting dust for over 30 years. Each of the 450-square-foot rooms was converted into a bachelor apartment at a total cost of approximately $400,000. The annual rent on the 13 units is just over $100,000, giving a payback period of four years. “You don’t run into that many golden opportunities to do such an easy conversion,” says Smith. Sub-Metering Another in-suite improvement currently under way is sub-metering, which will see each unit pay its own electricity bill. Smith says new sub-metering systems are much easier to put in as there is no 36 Canadian Apartment Magazine requirement to install a glass meter for each unit. Instead, a computer chip monitors each unit’s electrical consumption. The chip relays the information back to a computer which tracks the amount of electricity going into the apartment. Each chip is government approved and only licensed companies can install and monitor the sub-meters. While the property managers are not responsible for monitoring the electricity usage, they do get a weekly printout of current usage on each unit in the building. Smith says that is useful information as it allows you to speak directly with the tenants who are using the most electricity. “Often we find they have two refrigerators and/or a high consumption appliance like an electric barbeque,” he says. But in one apartment in another building they found a marijuana grow-op in one of the bedrooms. High electrical usage “kind of waves a red flag,” to building managers, says Smith. “For operators of apartment buildings, it’s a big problem these days.” In buildings where sub-metering has been done, tenants typically begin paying the electric bill on turnover. Smith says their experience has been that most tenants benefit from sub-metering. The tenant’s rent is decreased and they pay only for the electricity they use. Under sub-metering, the amount of electricity used by the common areas is calculated and subtracted from the total electrical consumption of the building. The remaining amount is attributed to each unit on a square-footage basis. That amount is then subtracted from each unit’s rent. Smith says most tenants like submetering as they can save money by reducing their electrical consumption. Before, they might have gone to work and left the lights on or the air conditioner running. Now, he says, when they switch off the lights, they are saving money. Some tenants have reduced electrical consumption by 20 to 30 per cent. “It’s a win-win situation,” says Smith, adding, “It’s good for Ontario, because we’re using less electricity. In Europe everybody pays for what they use, and that’s the way it should be here. Then people are cost-conscious. Once you give people carte blanche to abuse, they are going to bend the rules.” Smith says Briarlane’s ability to take over problem properties and make them profitable is one of the main reasons that building owners have stuck with the company. At the Glen Erin Drive building, vacancy rates went from 30 percent two years ago to zero today. “Owners of buildings like to hire us because not only are we excellent operators but we have expertise in renovating buildings. We can get the work done properly at good prices and we can get the income up as fast as possible.” At Glen Erin Drive Smith estimates the company spent about $1.2 million or about $7,300 per unit, a cost offset by the now achieved significant increase in the value of the units and the higher per suite rental rates. CA M CONGRATULATIONS TO THE NEW BUSINESS PARTNERS AND OWNERS AT BRIARLANE. CONTINUED SUCCESS IN YOUR FUTURE ENDEAVORS " ! & & $% )& # ( ,.11 ./0 ' ( ,'' + * ) We know how to help Briarlane rent more We’ve been doing it for over 18 years FIND OUT HOW GTA Ottawa Hamilton/Niagara Kitchener/Guelph London/Windsor 416.784.3311 613.729.1221 905.387.8321 905.387.8321 519.672.7368 www.RentersNews.ca [email protected]