Case Study

CASE STUDY: Watching Wishrock

7 min read

One company’s approach to asset management 

“There are things that are planned, and then there are the calls in the middle of the night,” is the way Kevin Rose describes his role as director of asset management for the Wishrock Group, the Portland, ME-based company that specializes in preserving affordable and workforce housing apartment complexes.

He acknowledges, “Asset management means something a little different to everyone, we think of it simply as creating as much value as possible and reducing risk as much as possible for our properties.” But beneath the surface of that straightforward and elegant definition lie a multitude of considerations and moving parts, always in a state of flux.

“Small to medium-sized companies tend to organize asset management by the talents they have in-house,” Rose explains. “In other words, who has what skills and experience? At Wishrock, we’ve tried to take a more strategic approach by letting the developers do what they do best. So, about five years ago, they created an asset management department at the ownership level.”

Rose got his start as a property manager overseeing a portfolio of Rural Development, Low Income Housing Tax Credit and HUD-assisted properties, so he can relate to the problems and challenges of individual and regional managers. Prior to coming to Wishrock, he worked for the Maine State Housing Authority, working his way up to senior asset manager and then portfolio manager.

Wishrock’s portfolio is largely comprised of Section 8 housing, and Rose heads up a three-person team, two-thirds of which happens to be named Kelly: Kelly Campbell in the Portland office with Rose, and Kelly Dupont in the Missoula, MT office. Each of the three has a portfolio of properties to oversee. The asset management department also includes the relocation group, which is responsible for handling tenant populations during building and renovation.

“We communicate constantly,” says Rose. “We have a standing weekly call on Skype and then the three of us are always in touch, bouncing ideas off each other.”

Wishrock currently owns properties in 19 states, representing more than 9,000 rental units. It employs nine regional management companies, each one hired based on research to identify the strongest in each geographical area. Those strengths must also include having relationships with state and local housing agencies and knowing the municipal and nongovernmental resources available to each property. “We’ve found a great way to add value is to make sure your management company is performing at optimum level,” Rose notes. “About a quarter of our time is spent overseeing the management companies, who are our eyes and ears on the ground, and seeing what we can do to help or support them.”

The department’s working brief breaks out into several headings. Under the heading of “Management Agent Oversight” are listed: approving and executing management contracts; hiring management companies and serving as principal contact with the companies for operational issues; and evaluating their performances. This takes place on a constant basis.

As Wishrock’s liaison to lenders, FHA and housing agencies, Rose and his team are responsible for reviewing and proving submissions prepared by the local and regional management companies.

“Portfolio Financial Analysis,” another department responsibility, consists of: evaluating and tracking key statistical data on each project; reviewing and approval of all project budgets; reviewing variance reports; and reviewing audits and tax returns.

When the company acquires a new property, the asset management team takes charge of the transition. This involves finding the right management company to install at the site and establishing resident services. This is an important function at Wishrock, which has 92 resident services coordinators working throughout its portfolio. “We’re mostly an acquisition and rehab company, so many of our tenant populations are similar and stable. We’re looking for arrangements that make our properties and management sustainable for the long hold,” Rose states.

Once resident services plans are in effect, Wishrock’s asset management department is tasked with overseeing them and making sure they are meeting tenants’ needs.

To help them “think in a logical way project-by-project,” Rose and his team have created a “value-added tool” that takes into account all aspects of a given property and lets them keep up-to-date with its needs. “And we constantly track information on message boards. You need to know constantly what’s happening and the condition of each property. And we are always trying to identify and implement value-added strategies.”

This can take several forms. Most significant is the basic “Physical Asset Oversight,” which engenders ensuring the integrity of all facilities; long-term capital expenditure planning; and approving and administering capital planning draws. Overseeing the physical assets involves everything from keeping track of sudden needs, such as water leaks and furnace breaks that require immediate attention and expense, all the way up to replacing entire systems. “It’s all about sustainability,” says Rose, which is why energy costs and systems are under constant monitoring and review. “For instance, installing LED lighting, which can be expensive, can pay back within three years. But if you keep on top of things, something as simple as window shades can have a tremendous effect. If you buy the cheapest ones, you may find you’re replacing them somewhere every month. We’ve found one we really like, and it’s proved best and most economical in the long run.”

Just as important for sustainability is insurance management, which can be broken down into three components. First, there is procurement: finding the best and most comprehensive policies to meet each property’s situation, at the best possible price. Second is risk mitigation, which involves making sure each property and each rule or procedure has been reviewed for the least claim exposure. Finally, there is management of claims themselves.

And then there are other miscellaneous duties that fall outside the purview of either ownership or property management and therefore fall to the asset management department. These include negotiating and executing vendor contracts; monitoring and approving rent increases and adjustments; administering distributions with finance and obtaining the necessary approvals; and tax credit and regulatory compliance and oversight.

Site visits
Like many property owners, Wishrock undertakes site visits to each project at least once a year, more often if a property has particular needs or challenges. “It’s amazing how quickly things can change at a property on the edge,” says Rose.

Site visits to each property are only one action item on Wishrock’s annual calendar. Like the passing of the seasons, each time of year finds the asset management team involved with a specific task in addition to the daily and weekly conditions it constantly tracks. March through May, compliance documents and tax credit reports are compiled and generated. Financial audits are prepared in the spring for distribution to the owners. During the summer, insurance needs are evaluated and modified when necessary for the November renewal of policies. In the fall, work begins on next year’s budgets.

So, in the final analysis, asset management at Wishrock represents a spectrum from fixing leaks all the way up to preparing annual budgets and overseeing regulatory and tax credit compliance. Perhaps the fullest description beyond Rose’s equation on the creating value versus mitigating is the mission statement his department lives by:

“The purpose of the asset management department at Wishrock is to drive operational performance of the properties in our portfolio, to preserve and create asset value while managing risk related to the ownership and operations of the properties. The asset management department is forward thinking, it does not exist to just put out fires but to look at ways to run the properties as efficiently as possible while maintaining standards of quality and delivering a safe place for our residents to live and giving them opportunities that they may not have elsewhere.”

Story Contacts:
Kevin Rose, Wishrock Investment Group LLC

Kelly Campbell, Asset Manager, Wishrock Investment Group LLC

Kelly Dupont, Portfolio Analyst, Wishrock Investment Group LLC