Inside a Midwestern owner’s move into third-party management
Article from multifamilydive.com
*Indianapolis, IN - November 27, 2023*
When Indianapolis-based Buckingham Cos. decided to expand into third-party management, the real estate investment firm turned to Ian Bingham to lead the way.
Bingham, a long-time multifamily operator, will serve as senior vice president of business development at the 40-year-old firm, which has 65 properties and 13,000 units under management in secondary markets throughout the Midwest and Southeast. Before joining Buckingham, he worked at Denver-based RPM Living, Southfield, Michigan-based Village Green and Tysons Corner, Virginia-based Middleburg Communities.
At Buckingham, Bingham will oversee the company’s third-party entry into new markets, including central Florida; Charlotte and Raleigh, North Carolina; Nashville, Tennessee; Indianapolis; Atlanta; and Denver.
While Buckingham wants to add several thousand units in the next year, any expansion will need to be measured. “There is no line in the sand that says at this time next year, Buckingham will be at X number of units,” Bingham told Multifamily Dive. “That’s not how we’re planning to grow.”
For instance, within weeks of arriving at Buckingham, Bingham turned down some clients because their properties didn’t fit the company’s portfolio. “We want to make sure it is on brand and it’s something that we can be successful with and fulfill our obligations to,” Bingham said. “We really want to focus on lease-ups, class A and class B in the markets that we want to be in and the markets that we want to grow into.”
Here, Bingham talks with Multifamily Dive about how apartment management is changing with maintenance centralization, office consolidation and an evolving role for assistant managers.
This interview has been edited for brevity and clarity.
MULTIFAMILY DIVE: How do you think Buckingham can benefit from centralization?
IAN BINGHAM: One of the areas where everyone is now looking to make a move is maintenance. Traditionally, multifamily has lagged behind commercial real estate. Twenty years ago, we all saw big white JLL vans driving around our cities. And that was a maintenance person who was servicing commercial property on an as-needed basis.
So we started to do that. We’re doing that in Indiana today, and we’re spreading that to the rest of the portfolio.
Have you come up with formulas that work as far as how many maintenance technicians are needed across properties?
Everyone is looking for the magic bullet. What’s the formula? I wish I had a clear, concise answer for you. It’s certainly not what it used to be — the one technician for every 100-unit model.
As we look at it today, the property vintage is very important. A 1990s-built product where you are going to have a lot more HVAC going down and things like that is going to require a lot more labor than a 2016-built property.
That being said, what we’re seeing is that the efficiencies are increased. As the industry talks about this, the thing that I think everyone shies away from saying is you’re reducing headcount to save money. But, I believe that eventually there’s a degree of that. But for us, one of the bigger things that we’re really focusing on is creating higher levels of efficiency. So it’s utilizing technology that automatically pushes out to our service technician who has an HVAC certification all of the work tickets that are HVAC related. Conversely, that service tech that’s fantastic at plumbing is getting all the plumbing tickets.
Are you also consolidating on the office side?
We’re definitely looking at it on the office side as well, specifically the assistant manager role that we find a lot of companies, including ourselves, are starting to centralize. So that is a big focus.
Will the assistant manager role exist in 10 years?
In some facets, it will. Will we still call it that? Maybe, maybe not.
When I came into the industry, the position was called the bookkeeper. In many companies, that was a consolidated position at that time. When I talk to my peers, the job entails renewals and delinquencies. It’s the tactical things that are typically done via the computer and phone. But I don’t know if it ever goes away. I think a lot of it can be automated, but I don’t know that you’re ever going to be in a position where collecting the rent is fully automated. You certainly can stop taking checks on site and do all those things. But if you can find me a property that has zero delinquency in perpetuity, let me know because we’re going to underwrite it.
Are there other office roles you may centralize?
Eventually, I think we’ll look more at leasing. There’s so much technology out there, and it’s trying to figure out how to leverage that technology with the needs of the properties to help drive NOI without losing customer service.
The benchmark of our company is how we serve our residents, our associates and our investors. And we don’t want to lose ground on those fronts.