Let's examine two options commonly faced by investors looking to access the numerous commercial real estate market benefits. The first option is investing with a property management and investment group that uses leverage with no principal investment and manages properties outside their portfolio. The second is a property management and investment group that invests principal investment and only manages properties within their portfolio.

Informed investors know that the second option will yield more significant results as an asset management strategy due to the hyper-focused, aligned, and more experienced service and management capacity. Owner-managers plus shareholders in a carefully curated investment portfolio are a recipe for success. 

This blog looks at the unique Kenwood strategy for managing properties within its portfolio, the benefits of a Kenwood-only ownership and management philosophy, and how these strategies translate to investor benefits.

Aligning Interests and Focus on Value

All property management and investment companies can claim that they have investor interests at heart. However, groups that generally seek to align the interests of investors and principals will generally invest their own money into a deal like we do at Kenwood. 

While commercial real estate and property investment scams and poor practices are on the decline, they're still present, and investors must be acutely aware of deals that may seem too good to be true. 

Principals who don't front up capital on a deal may signal inexperience, lack of liquidity, or commitment issues. Investors may (rightly) be weary of such opportunities and question whether the alignment of investors and principal goals is genuine or if the dealmakers prioritize their outcomes on top of investors. 

As the principal's role is heavily involved as they're the ones that organize and manage the deal/assets with an active role in the administration, organization, and facilitating success, their commitment must be 100%. Additionally, if they offer property management services, their dedication to the asset must be unwavering and focused– a principal-backed deal should be the investors choice property management. 

Groups that offer principal investment and own the properties generally indicate experience, trustworthiness, and a track record of success.  

At Kenwood Management, we invest 10-20% equity into every deal in investor capital. 

This financial stake guarantees several key outcomes, including:

  • Alignment of interests: As discussed, value creation is incentivized as it reflects on principals just as much as investors.

  • Risk management: Decision-making is tied to financial investment, as principals now make decisions that reflect financial gains or losses of their own money. 

  • Community building: As long-term value investors, we aim to foster a sense of community and a supportive environment where investors feel supported. By contributing to the equity of a deal, we're strengthening ties with investors backed by a common interest. 

  • Financial interest: Of course, there are also a range of economic benefits that come from buying a property, including more substantial equity, cash flow, appreciation, and tax returns and benefits. 

Principal investment and property ownership are two leading indicators of an experienced group committed to delivering optimal outcomes for all parties involved in the deal. 

Focused Understanding of Owned Properties

While it can be tempting for some investment and management groups to jump on any enticing deal, the contemporary commercial real estate landscape is complex—impacted by everything from geopolitical forces to macroeconomic shifts. 

An exclusive, hyper-localized strategy within a set framework for property acquisition has been the key to Kenwood's success over the decades in this constantly shifting landscape. We maintain a predominantly multi-tenant real estate portfolio across the commercial property management Washington DC and Baltimore metropolitan areas in office, industrial, and storage. Through this approach, we acquire a deeper understanding of each property's characteristics, requirements, and growth opportunities.

This approach translates into several effective property management strategies, including:

  • Multi-tenant benefits: As experienced owners of multi-tenant assets, we leverage this experience to place a diverse tenant mix and complementary business owners that make sense for the building type, location market, economic climate, and more. The benefits of this approach translate into enhanced property performance through more substantial cash flow from multiple sources, greater security through diversification of businesses and rent-payers, plus reduced vacancy periods through the overlap of lease agreements. 

  • Asset-specific tenant improvement: Through a tenant-first mentality and understanding of our assets, we know what tenants need to run their businesses at maximum capacity. This can be anything from build-outs to set-up spaces to negotiation for value-added upgrades for tenants. As our tenant  Robert R. Reed shares, "Kenwood staff arranged for our trash removal cost to be lowered significantly and for a new larger sign at the entrance to the [business] park. We recently renewed our three-year lease, and Phil's help was invaluable. The partnership and generosity are greatly appreciated, especially during these trying times. We look forward to continuing the long relationship that has developed at the property."

  • Tenant relations and communication: Our exclusive management of owned properties and Kenwood-only philosophy allow us to forge deeper connections with tenants. We offer various services, including introducing business opportunities, mentoring through network events such as our lunch and learn, free tools and content, and ongoing availability and open communication. This focused approach builds a more robust support network, thereby contributing to higher rates of tenant retention and lease renewal. 

Business People Teamwork Collaboration

Proactive Management and Investor Centric Benefits

Since our beginnings in 1994, every asset acquired by the Kenwood team has exceeded the forecasted investment return projections. Additionally, each asset held for over ten years has beaten the S&P 500. 

These results stem from a selective property acquisition strategy and unique, forward-thinking management procedures. We offer a higher level of care that may not be afforded by property managers who provide 'outside' services. 

Some of these strategies include: 

  • Maintenance and value-add: We employ a rapid-response engineering team to provide economical solutions to maintenance emergencies and issues. By contracting an internal team, we can offer a more dedicated service, faster turnaround time, and guarantee of service and professionalism. By maintaining the asset through regular, professional service, we directly contribute to the asset's longevity and appreciation, which translates to benefits for investors. 

  • Tenant care and focus: As discussed, our tenant-centric strategies cultivate highly desirable assets. With 95% retention and 94% occupancy rates, investors know they are partnering with a historically secure group prioritizing tenant wellbeing. These high retention rates also create desirable assets that perform well when sold.  

  • Cost reduction and security: Exclusive management of our assets means we take optimal care of both the asset structure and the systems within. By leveraging modern systems tracking software, we measure the efficiency and usage of major systems such as HVAC for environmental and cost savings purposes. 

  • Security: Establishing security features such as internet-enabled cameras offers a higher level of asset protection against malicious actors and damage. 

These strategies, matched with ongoing investor support, communication, and dedication, help to maximize investor returns. 

Some of the benefits for investors include:

  • Passivity: By investing with a company like Kenwood that manages owned properties investors can enjoy true passivity. This means enjoying the financial benefit of the asset without being dragged into the day-to-day management and administration. 

  • Diversification: Investors have the opportunity to diversify their portfolios across several assets to reduce overexposure and risk. 

  • Reduced risk: Investors within these deals are limited to their investment amount and are not responsible for any mismanagement or financial errors. Additionally, investors can access tax benefits to help boost net worth and offset payments through advanced tax strategies.   

At Kenwood Property Management, we approach investment opportunities with investor needs as a central feature. 

Long-Term Relationships and Trust

Through exclusive management of owned properties and long-term outlook, we develop extensive relationships with our investors crafted over (sometimes) decades of investing partnerships. 

We're not focused on short-term gains but instead developing assets that deliver exceptional value from a cash flow and appreciation. This is one of the ways we can guarantee commitment to a deal and align interests as co-investors. 

As one of our long-standing partners, Mark Goldstein from Paley Rothman Attorneys At Law, shares, "We've been doing investing with Kenwood Management going back 1996. I am not their only partner. They are not my only partner. They have been my best partner." I never have to worry about the operation of a facility that we bought once we buy it. If there are problems with the investment, we have partners- which is very important, that can step up to the plate and put money into the transaction. So we have never had capital calls to any of our investors."

Experienced financial investor in office

Investors Choice Property Management: Choose Kenwood Property Management For Advanced Investor Relationships

At Kenwood, our alignment with investors and exclusivity in managing our portfolio gives us greater control to maintain, improve, and create value with our assets, making vehicles for our investors to achieve financial freedom. 

More than that, through capital investment from within the Kenwood team, we're building a layer of trust and level of partnership that isn't easy to find in other commercial real estate groups. 

To learn more about this specialized approach, go ahead and grab Commercial Real Estate Investment Secrets: A Guide by Kenwood Management, or to experience the benefits, reach out to a team member today.