Q&A: Jeff Manas on Launching JLL’s Latest Valuation Advisory Line
The new line focuses on environmental and property condition service
This month, JLL added 20-plus year industry veteran Jeff Manas to head a new division inside its valuation advisory unit, which will focus on environmental and property condition service.
The new department helps potential buyers, sellers and lenders kick the tires on a property’s environmental status (and identify any troubling issues such as soil or groundwater contamination) and its overall condition in terms of its structure, interior systems and other items. These factors are often reviewed in a Phase I Environmental Site Assessment (ESA) and Property Condition Assessment (PCA) reports, with the ESA providing the buyer with an insurance policy of sorts against any surprise environmental issues that may arise.
Manas’s responsibilities include everything from building the processes and tools that support the business, recruiting and hiring team members, adding service capabilities, generating business opportunities and partnerships, and being responsible for financial performance of the service delivery teams in the division.
Manas spoke to Commercial Observer about taking on the challenge of creating this service line, the importance of the ESA and how they provide more value for clients.
Commercial Observer: Why were you interested in taking this position?
Jeff Manas: Our industry is traversing a unique point in time related to technology and data, along with how to use those tools to create the most value for owners, occupiers and investors of commercial real estate. In that context, there are truly only a small handful of companies who have the global foundations to lead this technology pioneering, the service capabilities to provide holistic global solutions to their clients, and also who have the progressive appetite to make the investments in the future that our commercial real estate clients need to be competitive. JLL has proven to “walk-the-walk” when it comes to leading these types of initiatives and it was an easy decision for me to join their team and fill a service gap that aligns with their technology and capability investments.
How has your past career experience prepared you for this role?
I think have a somewhat unique background in that my first professional foray was in the environmental industry working at the largest oil refinery in the western hemisphere as part of a team of environmental scientists that performed industrial-scale groundwater monitoring and remedial work with close oversight by the US EPA. That regulatory compliance experience is something that I think really shapes my appreciation for “good science” in our industry. From there I spent time in the private sector performing Phase I ESAs and PCAs all over the continental U.S., eventually starting my own national due diligence business that I ran for nearly 10 years, and performing services in support of over 3,000 transactions.
After getting married and moving across the country from Los Angeles to D.C., I got licensed and added brokerage and tenant rep to my service capabilities, which ultimately brought me to a really neat convergence in the world of diversified commercial real estate business. So, I think it’s the entrepreneurial mindset, background in business start-up and operations, appreciation for science-based logic, in-depth understanding of brokerage and underwriting of CRE transactions, and the countless miles that I’ve walked on property inspections that give me a unique set of capabilities to succeed at this role.
Describe JLL’s Environmental and Property Condition service strategy.
The strategy with these services is three-fold: First, to fill a service gap that our existing Valuation Advisory client base has been asking us to provide for them that will save them inordinate time and money which their borrowers and clients will also benefit from, for which they’d be willing to award a higher volume of service engagements to us; second, to introduce a new pool of clients from the environmental and property condition sector of users that will result in net-new revenue for us and who will add accretive cross-selling growth to our valuation business; and third, to create a unified capability of services within JLL that will allow us to leverage our environmental and engineering services of all types across the ecosystem of clients we support from each of the owner, occupier and investor roles.
What goes into the Phase I Environmental Site Assessment?
I always encourage our clients to view a Phase I ESA as a risk management tool to gain a baseline understanding of environmental liability at their property. The assessment is governed by the American Society for Testing and Materials (ASTM) E1527, which is the Standard Practice for Environmental Site Assessments in the United States. To boil it down to its key components, it includes a site visit, historical research, geology and hydrogeology review, a review of environmental regulatory listings, municipal research and interviews, and a review of documents and key personnel associated with the property. The intention is to produce a report of findings that illustrate the potential for environmental concerns associated with past and current uses of the asset that’s being evaluated and adjacent/nearby properties, and recommendations for the user to follow to further research, mitigate or manage the risk and liability.
How about Phase II of the process?
The purpose of a Phase II Environmental Site Assessment is to evaluate the site for the presence of contamination in soil, soil gas and/or groundwater that has been identified as a potential concern in the Phase I ESA. This service generally consists of taking the “indicator” data from the Phase I and working with experts to design testing parameters at the site that will determine whether the contamination exists, and if so, what next steps would be recommended to mitigate or manage the contamination.
Why are both of these important and how do they fit in with JLL’s philosophy?
JLL’s philosophy is pretty simple: we’re a world leader in real estate services and we have an inherent responsibility to drive sustainability, technology and corporate responsibility efforts. Offering services and capabilities that respond to the need for protecting natural resources, bringing awareness to conservation, ethical business practices, and caring for the environment through the ways we support our clients is a core alignment.
Who are your clients for this?
Our clients typically consist of banks or lenders that are underwriting transactions for borrower financing; the seller who is taking their assets to market and wants to provide disclosure reports for potential buyers to get ahead of concerns around environmental or physical condition issues; the buyers who want to study properties they intend to purchase to make sure they’re making informed purchase price offers related to any impact to value that could be derived from environmental and physical condition; owners who want to optimize their capital expenditures and increase their NOI by being proactive and leveraging the scale of their portfolio for values of economy or timing of maintenance plans; and many others.
What do you expect in 2021 as far as performing these services? Why will they be in demand?
I think the turbulence from 2020 really drove home the point that all businesses are exploring ways to do things smarter, with more efficiency, and with a higher level of value to their clients. Our services are no exception. Our clients are looking for ways to beat their competition with better client experiences, speed to data, shortened processing times and by creating a higher degree of confidence around execution. We share those interests with them which is why we’re offering a bundled package of services for valuation, environmental, property condition, etc, with efficiencies like single site visits, and reconciled data between reports, single points of contact nationally, and more. These are basic concepts, but surprisingly these are capabilities that the market generally has difficulty with. But because of that alignment with our clients we’re in a position to not only make their jobs easier, but to help them retain and grow their market share as well.