For over 20 years, SKY Properties’ Kari Negri has been widely recognized as a leader in the property management industry, offering hands-on, boutique-level property management at a competitive price for multi-tenant property owners. She thrives on quality customer service for property owners and tenants while optimizing property cash flow and streamlining leasing and maintenance.
How do you see the rest of the year playing out for commercial office spaces?
I believe that many commercial property owners will want to transition the space, if possible, into residential. We could possibly end up with New York–style lofts, with units offering big, open living spaces post-transition. This would definitely create interesting and creative living spaces and allow owners to reuse what they already have, or in other words, repurpose their properties into badly needed housing. Thinking outside the box is going to be key here. A lot of this, however, is dictated by government policy and funding, as well as zoning regulations.
What trends are you seeing in the property management industry?
One of the biggest trends may be buyers entering into exclusive buyer–agent agreements when purchasing a home and, as a result, being required to pay a purchase commission rather than a buyer’s agent being compensated entirely by the seller. With interest rates going up, people will likely slow their efforts to buy homes and go back to renting because buying will not be as affordable. Homeownership, in general, will be more difficult because private equity (individuals, groups, large funds) is buying up single-family homes for the sole purpose of renting them, and effectively removing homes from the market and out of the hands of potential individual buyers. This will likely result in keeping purchase prices high and making current and future homeowners into renters.
What challenges, if any, is the property management industry facing right now?
Excessive oversight and regulation are nothing new to property owners and management companies. However, it seems to be accelerating to the point where the government thinks that property owners are responsible for housing rather than taking responsibility for what negative impacts regulations have caused and our elected officials’ contributions to these problems. Elected officials want to stay elected, so pandering to their voter base, which is now mostly renters in California, is one of the primary ways to stay in office at the cost of losing many “mom-and-pop” property owners who have consistently provided the bulk of affordable housing here in the Greater L.A. area. Regulations like rent “caps” and eviction protections, among dozens of others, only put additional financial burdens onto owners, particularly the majority who are mom-and-pop owners, who today are being driven out of the business, resulting in the housing shortages and affordability issues we have today. There are far better ways to solve our local and state housing supply and affordability issues, but unfortunately, government entities like the city of L.A. can never seem to think outside the box and look at alternative, workable solutions.
In your view, what should people look for when choosing a property management company?
Remember that your property is like a bank account. You want someone you trust who will respect your asset and make it perform at its optimum with a good rate of return. The best thing SKY does is increase the value of our clients’ assets over time. Of course, values go up over time, but we add value beyond normal appreciation by helping clients to avoid liabilities, addressing deferred maintenance and improving specific deficiencies to ultimately improve the bottom line. Also, in property management, you need a company that remains on top of today’s complex world of regulatory compliance and ever-changing laws. SKY goes above and beyond to not just know the laws but to advocate for better ones that can only help and not hurt property owners.
What would you say is SKY Properties’ strategy when it comes to your clients’ assets?
I would say that the best thing SKY does is increase the value of our client’s assets over time. Of course, values go up over time, but we add value beyond normal appreciation by identifying liabilities, deferred maintenance and improving specific deficiencies to ultimately improve the bottom line. We have been able to remake properties in poor shape that would not sell in the best of real estate markets and make them extremely desirable and compete at the top of the market. Price appreciation is something we always aim for when managing our clients’ assets. Some management companies are complacent with just the status quo, but SKY Properties, Inc. implements a program to reduce liability going into the future, which also reduces surprise out-of-pocket expenses. SKY specializes in transforming their apartments and buildings to compete with the highest possible rents in any market. We create a strategy for each property to increase its market value, making the long-term income for our clients greater than any of our direct competition. We know that renovating units at the right time with the right things at the right price is a great investment in a property’s future, and this strategy has proven out as we have many clients that have been with SKY for more than two decades.