Protea Real Estate Property Management

We took over the management of twelve multi-family complexes in Texas, in the Dallas Forth Worth Metroplex and Houston and Pasadena, for a Canadian group. The property management company which had managed the DFW real estate for about 9 months before Protea, delivered to Protea a number of large boxes full of invoices and statements, some of which were several months old, and these had never been entered into any accounting software for the properties. Protea's new client therefore had a very inaccurate idea of what was owed to creditors of the properties. Protea's staff worked overtime for about six months to get the accounting records properly written up. Previous management had not bothered to do this. But they paid themselves their management fees every month.

After taking over the properties in Houston and Pasadena, Protea's area supervisor traveled from Dallas to Houston, at first every week, and then every second week, and spent two days at the three properties concerned. The on-site managers of the properties informed Protea that the previous management company's supervisor, who had been based in Houston, had physically attended at the properties no more than an hour a month each. But the management company paid itself it's management fees each month.

When Protea took over management of these properties, they became insured under Protea's master policies and the owners' premiums were decreased by over one third and their deductibles decreased by eighty percent!

Protea took over a troubled multi-family property for an out of state owner. The property had no cash flow and could not pay its creditors. The property collected a charge for water consumed by its tenants on the RUBS system. These collections amounted to over $6,000 per month. Because there was no cash in the bank, the management company at the time did not pay the company managing the RUBS. This company was charging about $80 per month for its services. After not being paid for a month, the company stopped sending out invoices to tenants, so that in a period of four months, a property starved for cash had an additional cash shortfall of over $20,000. The management company was not prepared to lay out $240 of its own funds to protect its owner. But the management made sure that it paid itself its management fees each month.

After taking over, Protea paid the RUBS company everything owed to it and later repaid itself out of incoming revenue

Protea's president was a practicing commercial attorney in another country for 16 years and has managed numerous shopping centers in Canada and the U.S. since 1976. During the past 47 years he has, first as the litigator, and then as management, been involved in many lawsuits regarding real estate, with the result that management by Protea brings with it another layer of protection and expertise in relation to disputes between clients and third parties.

One example: while Protea managed a large design center in Dallas for a European owner which was represented by a local agent. A tenant sued the owner for damages of $2,000,000. The lawsuit had nothing to do with Protea, and was defended by the local agent, using its attorneys. Two month before the agreed trial date, Protea's president became involved in the lawsuit and he discovered that the the attorney acting for the owner was overwhelmed and making bad decisions. It appeared the tactic of the plaintiff's attorneys was to wear the owner down and force a settlement by demanding production of several hundred documents which it intended to produce to witnesses at the trial for identification and examination. This process alone, could have taken no less than three weeks in court.

Protea's president took over the defense, appointed new attorneys, and obtained a continuance from the court to bring new motions regarding the document production. The upshot was that the plaintiff's attorneys, within the next several weeks, capitulated, and a settlement was reached which involved no payment by the owner to the tenant.

Prior to Protea's president taking over the defense, the owner of the center was headed towards having to pay the tenant an excessive amount, perhaps even the whole $2 million claimed.

In carrying out due diligence for clients considering acquisitions, Protea often discovered misrepresentations (and some of the misrepresentations were very serious) made by brokers, management companies, and/or on-site staff.

Some examples are bogus rent rolls, incorrect lease expiration dates, delinquencies omitted, notices of termination by tenants not disclosed, and many others. Because of these experiences, Protea's staff is extremely detailed and conservative in carrying out due diligences for prospective purchasers.