Market High for Prop Managers

Encino-based Illi Commercial Real Estate, the top company on the Business Journal’s list of Property Management Firms, had a growth year in 2018, according to Chief Executive Todd Nathanson. If one word could describe the property management business at Illi Commercial Real Estate in 2018, it would be “momentum.” In a year that has seen the strong local real estate market cool down, Nathanson said the property management division of his firm has become a reliable producer of revenue. With 62 employees in the company’s fold, about 27 of them work in property management. “We’re managing more than 100 properties and it was all from word-of-mouth. We run a tighter ship than our owners do,” said Todd Nathanson, founder and president of the company, which sits atop the Business Journal’s Property Management Firms list (see page 10) with 7.3 million square feet of retail and 200,000 square feet of warehouse space under management. Nathanson, who launched his firm 12 years ago and previously headed the San Fernando Valley Division for Centers Business Management, said his property managers added about 35 properties during 2018. “Year-to-year since our inception, we’ve seen growth, with 2018 in particular,” he said. “It’s a combination on the top of properties that we focus on, we tend to do more volume.” Encino-based Illi Commercial Real Estate is not the only management firm in growth mode. CBRE Group Inc., which ranked No. 2 on the Business Journal’s list, managed a combined 5.5 million square feet, the bulk of it in the office space market; Centers Business Management, the No. 4 ranked company, oversaw 3.5 million square feet of retail; Cushman and Wakefield, No. 5, managed more than 3.8 million square feet, 2.4 million of it in office space; and Charles Dunn Real Estate Services Inc. ran 1 million square feet of retail, No.9. Since Illi’s 2007 inception, the agency’s property management bread and butter has been shopping centers, chiefly for Douglas Emmett, which owns Sherman Oaks Galleria; Ken Ruby Group Properties, which has Studio Village Shopping Center in Studio City and American Investment in Canoga Park; and Combined Properties, which owns Studio City Place and the Center at Coldwater in Studio City, Chatsworth Plaza, Victory + Tampa in Reseda, and GH in Granada Hills. Property maintenance Illi also oversees some prime assets for Rexford Industrial Realty, which last month acquired a Chatsworth warehouse for $29.6 million in a deal negotiated by Beitler Commercial Realty Services. “This year, we saw a growth of industrial properties (including) several mobile parks,” Nathanson said. “The growth has been all over Southern California, including Santa Clarita and Ventura.” The past year may be Illi’s most robust annus mirabilis yet. “We opened a maintenance division this year,” said Nathanson. Indeed, last January, the company formed the department, charging a dozen employees to handle everything from replacing lights to graffiti removal and other odd tasks at the retail centers under management. “We opened it for efficiency for our supervisors and our clients,” Nathanson continued, “because there’s so much work and such a small number of contractors – they want an unheard of price and usually the work is shoddy because they have a lot of jobs. So, it’s a great way for our supervisors to get work done at fair pricing.” At the firm’s property management department, “we’ve had very little turnover, but we’ve had a need to grow and hire more,” he said. This year also saw Mike Mazner’s promotion from controller to chief financial officer at Nathanson’s company. Nathanson agreed with industry data that supports signs of slowing in recent months in the brokerage side of the real estate market, but the company head has not seen it affect his realty’s management side. “We really don’t see a correlation (between the slowing of office and retail sales and leases in commercial realty) with the property management,” Nathanson said.