Comparison of Contracted versus In House Commercial Property Management Services (March 2025)
Third Party Commercial
Property Management
Contract
In House Commercial Property
Management Functions Staff Analysis
Full-Time Property
Management Staff
Headcount 8.3 FTE 9 FTE
Overall staffing count is similar in both
scenarios. HR worked closely with BRED
to understand scope and various roles to
identify similar job classifications.
Property
Management Roles
Property Manager, Supervisor
Property Manager
Commercial Operations
Manager
Assistant Property Manager
Lease Administrator
(Accounting)
Property Administrator
Property Administrator
Incld. in PM Fee:
Executive Leadership (0.7 FTE)
Accounting (0.6 FTE)
Property Management Div. Mngr.
Senior Property Manager
Property Manager
Property Manager
Senior Management Analyst
Billing Specialist
Office Assistant
Additional Staff outside BRED:
Accountant II
Accounting Technician
In both scenarios, City staff will still
engage Providers via SPAs for necessary
maintenance, repair and replacement
work. In general, other public agencies
with In House property management
staff report that they largely use Public
Works directly for these efforts.
Annual Cost
Estimate
$1,240,000 (Salary)
$360,000 (PM Fee)
$1,600,000
Utilizing cost data obtained
from recent RFP for services.
$1,626,000 (Base Equivalent Positions)
$350,000 (Positions under PM Fee)
$10,000 (est. after-hours response)
$1,986,000
Costs are rounded. Does not include
other expenses reimbursed by the City
that would be roughly the same for both
(e.g. computers, equipment, office
space).
Transition Cost &
Impact
$51,000 (one-time)
Estimated costs to recruit, hire and on-
board new employees
$2-3 million (one-time)
Extend existing 3rd Party PM contract
for one year for transition time
See below for additional information.
Addressing Risk /
Liability
$500,000 annual insurance
premium to cover liability for
Commercial PM Scope of Work
Liability is covered in City’s insurance
policy if City staff complete the work.
Exhibit 2
1 Comparison of Contracted versus In House Commercial Property Management Services (March 2025)
OTHER FACTORS:
City Liability /
Service Provider
Agreement
LPC has agreed to accept the City’s Standard Service Provider Agreement, including accepting primary liability for claims related to its scope of work.
City’s Long Term
Property
Management
Needs
City intends to gradually reduce its property ownership at Alameda Point, which would reduce the property management staffing requirement over time.
• Ability to right-size staffing under a private 3rd party Property Management contract • If property management is in-house, staffing will need to be reduced through attrition, reassignment or lay-offs in alignment with collective bargaining agreements and civil service rules.
Long Term
Expenses /
Escalations
Commercial PM contract has fixed escalations of 5% for staff time, 3% for fee. Assumed insurance escalation of 7% due to insurance volatility.
In House Commercial PM escalations are dependent on negotiations with bargaining units (MCEA and ACEA).
Findings from
Research on Other
Agencies
• Most jurisdictions in CA with in-house property management intend to retain land in perpetuity (generally ports with State Tidelands and airports).
• All jurisdictions surveyed use 3rd party providers for Residential Property Management • Managing residential tenancies require staff to be “high touch, ” with more personal interaction with tenants
• In the private sector, primary liability generally rests with Property Owner (not Property Manager) • In the public sector the contracted Property Manager tends to accept primary liability for their scope of work
Process to
Transition to In-
House
City estimates an 8-12 month transition timeline in order to recruit, hire and on board new in-house Property Management staff.
• New City Staff must be permanent employees given civil service rules. • Associated impact to work plan and cost for the HR and BRED staff to support this effort. • This includes reduction in new lease revenues while staff focus time on this transition instead. • Need to retain LPC for one year contract, with added up front cost of up to $2-3 million for FY25-6.
Exhibit 2
2