Taking Action
Divaris Group’s property management team takes a proactive approach to retail and management of mixed-use developments.
By Katie Lee

The Town Center of Virginia Beach spans 17 city blocks in Virginia Beach, Virginia.

With a portfolio of more than 24 million square feet of managed and leased properties, Virginia Beach, Virginia-based Divaris Group has a knack for juggling many irons in the fire and yet still pays meticulous attention to detail, all in the name of making its customers — property owners and their tenants — happy.

A prime example of Divaris Group’s successful approach to management is The Town Center of Virginia Beach, which opened in 2000. “The Town Center of Virginia Beach is our crown jewel,” says Gerald Divaris, chairman and CEO of the Divaris Group of companies, which includes Divaris Real Estate, Inc. and Divaris Property Management Corp.

Spanning 17 city blocks, The Town Center of Virginia Beach features high-rise office buildings, ground-floor retail, and the tallest structure in the state of Virginia, the 39-story Westin Hotel & Residences.  Also, the project includes residential condominiums and apartments, a performing arts center, two hotels and structured parking.

Divaris’ property management team handles a wide variety of activities at The Town Center of Virginia Beach — everything from changing light bulbs to developing the center’s budget and allocating CAM charges to the tenants. “As far as the public is concerned and as far as the tenants are concerned, there is one manager who’s taking care of everything,” Divaris says.

“You not only undertake lease administration, rent collection and the payment of bills, but you’re doing a lot of other things,” Divaris says. “For example, we manage the parking facilities, the city plaza and provide security. In the public open spaces we arrange entertainment, such as an art show, wine tasting or Christmas pageant.”

The Divaris Group’s on-site management office at each of its major properties proves valuable for property owners and tenants, particularly for mixed-use projects.

“We do a lot of mixed-use development management,” notes Divaris. “We offer the retailers at mixed-use projects a lot more service than they get at a traditional strip shopping center that doesn’t have that kind of capability on-site. The fact that we’re on-site makes it very easy and much more beneficial for the retailer to call upon us for help.”

With approximately 85 people on staff, the Divaris Group outsources some of its needs. For example, security and cleaning are typically contracted out.

“We develop a scope of services that are required for each property,” Divaris says. “We call for bids on an annual basis, and then we evaluate each bid based on price and capability to perform the services that are required.”

The company hires a mix of national and local vendors. Divaris says they often hire local landscaping companies because it is more cost-effective. Security is usually national, he says, “because you get the strength and support of a big company that can draw upon its resources from other places and can provide the landlord with the required insurance that is needed.” He adds that, these days, cleaning is often a franchise operation. “You get a large company that has established a local franchise with local control.  That’s often the better way to go,” Divaris explains. Parking lot sweeping tends to be handled by a national company.

When a retail tenant has a regular maintenance call or an emergency call, the first person contacted is the property manager. Each property managed by Divaris Group has its own assigned property manager, supported by an assistant property manager and a maintenance crew.

“We provide our tenants and landlords with 24-hour access to their property manager, and he or she can be reached either through dialing the office number or through an after-hours calling service that picks up the phone the minute somebody calls,” Divaris says. “So if there is an emergency, there’s a whole list of folks available to respond. Depending on the nature of the emergency, the police or fire would be called immediately; if it’s not that kind of an emergency — ‘my lights are out’ — we’ll dispatch the maintenance department to fix that.”

When it comes to property management, Gerald Divaris has learned two important tools of the trade. The first is to be proactive and try to create value every single day for the property and for the customer. “That involves making sure that you keep delinquencies at a minimum, collect your rents on time, make sure that you budget accurately and bid out the work so you can get the possible work at the best possible price and service the tenants to the best of your ability,” he explains.

The second is to listen to your tenants’ needs. “Your tenants are your customers,” Divaris says. “They’re the people paying your rent every month and you want to make sure they are happy and are being served accurately and correctly, and of course their success is ultimately your success.”

In retail, adds Divaris, you want to make sure the environment in which your tenants are operating and the services they need — a clean and well lit parking lot, a secure and safe environment — are all available so that they can maximize their sales. “If they succeed, you will succeed,” he says. “That’s the whole program.”

Divaris continues: “You can’t just be a bookkeeper sitting in an office and not be proactive. You’ve got to talk to your tenants on a regular basis, you’ve got to visit them, look at their customers, conduct surveys on how to make the environment more appealing and more attractive for the visitor. Because that makes your customer — who’s your tenant — happier.”

Adjacent to The Town Center of Virginia Beach is Columbus Village Entertainment Center, a 159,000-square-foot retail center with Barnes & Noble, f.y.e., Bed Bath & Beyond, Schlotzky’s Deli, Columbus Movies 12, Bagels ‘N More and Lenscrafters. “It has four different property owners in four distinct buildings. In order to make things easy for them, particularly with respect to CAM charges, we coordinate facility management for all four properties as though they are one.”

Indeed, the property management department of Divaris Group wears many hats, not only acting as manager for the shopping center owner — and, in some cases, for multiple owners — but also in some cases helping to manage the retail tenant itself.

In some instances, the company’s lease administration department manages the leases that a retailer has with its various landlords, nationwide. Divaris Group arranges to pay the retailer’s rent on time — rent that is sometimes collected by Divaris, as the property manager, and paid to the shopping center owner. Divaris Group also monitors the retailer’s CAM charges to make sure they are accurate, and it organizes the retailer’s lease renewals and ensures that all lease provisions, such as co-tenancy requirements, are all properly adhered to.

“Typically, a retailer would do these activities in-house,” Divaris explains, “but we find this a very valuable service to any retailer who has 250 or fewer stores.  At 250 stores, it is like managing a big shopping center, so it might be better for them to outsource to us.”