Alterra Property Group wants to double its property management services in the next two years, looking to grab a bigger piece of Philadelphia’s ongoing apartment boom.
The Philadelphia development company known for converting offiice buildings into multifamily and developing new apartment projects has been operating property management services for the past decade but is now looking to grow beyond its own properties, or properties it had previous ties to.
Alterra added four developments with 440 total units to its management portfolio in 2022 and plans for an additional 190 units under construction to be delivered in 2023.
In addition to managing its own buildings, the company has also offered property management services for properties it previously owned. Now, Alterra is expanding to properties it didn’t have ties to, offering a service to multifamily owners who may not be local or who may not have enough units in the area for their own property management services to be efficient. Alterra is targeting upscale apartments in Greater Center City.
Alterra manages 2,500 units across 18 properties and wants to double the unit count in the next two years. It’s often inefficient for landlords to provide their own property management services if buildings have fewer than 200 units, Alterra Managing Partner Leo Addimando said.
“If you have 40 units or 70 units, that’s a relatively inefficient building on a standalone basis,” Addimando said.
Addimando used the example of the 410-unit LVL North building at Broad and Spring Garden streets, which Alterra built last year. Within 10 blocks, Alterra manages another approximately 200 units across four properties.
None of those four “have the individual scale to have the quality of people and support services, whether it’s emergency maintenance or daily maintenance or leasing coverage on the weekends,” Addimando said. “When you have four or five buildings in an area, you can create a team within a team that allows you to provide a much higher level of service at a lower cost to these medium-sized buildings where you can’t afford to have full on-site staff all the time.”
Addimando referred to the style as a “hub-and-spoke model.” As Alterra develops more new buildings, the property management part of the company has more capacity to take on operations at nearby, smaller buildings.
Without an efficient system, “you can’t get the customer service that tenants are really expecting nowadays,” Addimando said. “Gone are the days of you rent an apartment without really having to work on it.”
The expansion plans come as more than 13,500 new Center City housing units are planned to be built in the next three years, according to a Center City District report released last week.
Alterra owns dozens of residential buildings throughout the city, including the One City building at 1401 Arch St. The company purchased the building in 2017 when it had 220,000 square feet of office space and converted it to 323 apartments that opened for occupancy in 2020.
Alterra recently terminated a deal buy the office building at 1701 Market St. and convert it into apartments. Addimando cited rising development costs and projected apartment rents no longer adding up to a financially viable project.