Altman Management Co. has partnered with Atlanta-based third-party residential property management firm RAM Partners to provide back-office management services.
AMC, the property management division of Fort Lauderdale, Florida-based developer, builder, and manager The Altman Cos., will continue to handle resident-facing functions. Current back office AMC employees will be reassigned within Altman, given the option to move to Atlanta to work with RAM or be let go, according to Tim Peterson, chief investment officer for the company.
“This was really an option that allowed us to stay in property management, but avail ourselves of the scale that RAM has in the back office,” Peterson said.
The partnership provides yet another sign that it's increasingly difficult for smaller property managers to gain the scale necessary in today’s high-tech environment. In 2021, Sandy Springs, Georgia-based Worthing transferred its property management division, including lease-up functions, to the Atlanta-based operator.
“We've been very focused on providing our residents with what we call an exceptional living experience,” Peterson said. “It became harder and harder to have the infrastructure that we thought was necessary in the back office to provide that experience to our residents and also to our associates.”
Tapping into RAM’s buying power was only one driver to the deal. The familiarity between the two firms also played a role, according to Peterson.
Going outside for efficiencies
Altman’s operations team had always focused on providing the best results for its properties, according to Peterson. But over time, as property management technology grew more essential and the cost of running the properties became prohibitive, the executives at Altman decided that they needed to bring in a partner that could offer more efficiencies than its roughly 7,500 units.
Over the years, Altman has generally operated between 6,000 and 9,000 units. RAM, No. 32 on the 2022 National Multifamily Housing Council Top 50 manager list with 51,932 units, can bring scale that Altman couldn’t.
“They had the ability to build a much more robust back office,” Peterson said. “This provides us the opportunity to leverage off of that scale and the infrastructure that they've put together while keeping the Altman special sauce and all of the resident-facing associates and activities in place.”
For instance, AMC employed one Yardi support person, according to Peterson. Companywide, RAM employs seven support people to run Yardi reports, including three former Yardi employees.
“Now, when we want to customize reports, we have immediate access to people that are super skilled at doing that,” Peterson said. “And we now have the national account buying power of a 60,000-unit-plus company, including property insurance, which has become a bigger and bigger issue for multifamily today.”
A long history
Executives at Altman and RAM have a history going back 33 years, making the partnership between the two companies a natural fit, according to Peterson.
“We're corporate friends,” Peterson said. “We have visited with each other and regularly picked up the phone and talked to each other.”
As operations become more technical and expensive, Peterson could see other smaller property firms following Altman’s lead.
“Our management company wasn't necessarily our number one profit center or even a profit center,” Peterson said. “And even with that, it was becoming more difficult by the day to make the investments that were needed. I absolutely believe that's a trend that's been going on for a couple of years and will continue.”
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