The Denholm Building is a 200,000 sf office condominium located in Worcester’s Central Business District.
Once-great department store was tired building
This building has an interesting past. Once a thriving department store, a mainstay of Worcester’s Main Street, it was converted to an office condominium in the 1980s during the height of the real estate boom. Always managed by a third party, the building was tired, had a host of deferred maintenance issues, and the condominium association had approximately $200,000 in payables in arrears.
Our firm pursued this business for years. We saw the opportunity. Each of our predecessors had taken the same (unsuccessful) approach: Hire the same maintenance staff, keep the vendors at bay, and don’t undertake any deferred maintenance projects. The association and management companies felt that operating expenses were too high and their only solution was to raise condominium fees.
We had a different strategy. Located in the heart of the city, our offices are only minutes away from the Denholm Building. We proposed to evaluate the effectiveness of existing maintenance staff and whether they were required full time. Their salaries were an obvious place to reduce overhead.
Of the three maintenance employees, we let one go immediately. One of the remaining staff was a supervisor, who was relieved of duty after 60 days. The final person was placed on site for 20 hours per week. Our floating maintenance team addressed any additional needs. No one in the building even realized there had been a staffing change. Our level of service was an improvement, with the entire management staff only a short distance away. We could deal with any issue or opportunity almost immediately.
Finances, Punch List Under Control
Within two years, we cleaned up all payables. We tackled such deferred maintenance items as removing an underground storage tank buried on an abutter’s property and a possible liability. We re-carpeted and painted common areas and made repairs to the boiler systems. Today, the association enjoys a large cash reserve and has never raised condo fees. The building still requires many updates, but we are happy to say we know what they are and the building has sufficient financial reserves to handle anything that may occur.
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