Centralization redefined: Why third-party managers must embrace the new multifamily model

Industry leaders are debunking the myth that centralization is only for owner-operators. 

Centralization. It’s the headline-grabbing trend in multifamily, but like most industry shifts, its definition varies wildly depending on who you ask. We define centralization as the process of moving operational tasks from the property level to an offsite location, or a remote team. It’s about reducing the administrative burden on onsite teams, improving service responsiveness, and improving efficiency — all without sacrificing the renter experience.

Centralization looks very different when applied across the diverse landscape of third-party property management. Let’s explore why — and how — the leading minds in multifamily are tackling this challenge head-on. This blog condenses insights and quotes shared from Funnel partners in Dom Beveridge of 20for20’s recent white paper Centralization for Third-Party Management. For a more nuanced understanding, please download and read the full report. 

Centralization with nuance: adapting to diverse portfolios

At first glance, the benefits of centralization seem universal: streamlined operations, lower costs, and a more focused onsite team. But dig a little deeper, and it’s clear that no two properties — or management companies — are alike. Variables like portfolio size, property location, and operational structure can dramatically shape how centralization is implemented.

Take Greystar, for example — the largest manager of multifamily properties, with a presence spanning thousands of communities. For an organization of this scale, standardization might seem like the natural path forward. Yet even for Greystar, context is everything when starting a centralization journey. Andrew Livingstone, COO, explains:

“Larger properties were well-represented among our earliest adopters. It’s easier to reduce front office team members from four to three than from three to two.”

His insight highlights a critical challenge: scaling centralization across diverse property types requires more than just a broad strategy. Livingstone adds, “One of the complexities of integrating centralized admin services is that even if the central team does all of the work of one site team member, the remaining site team members feel they have extra work to do. That has been an important consideration as we have supported teams through the transition to the new model.”

Greystar’s thoughtful approach underscores an essential truth: effective centralization isn’t just about cutting costs — it’s about balancing efficiency with the human element, ensuring that both site teams and renters feel the impact in a positive way.

Precision in practice: elevating operations through centralization

For BH, a leader in third-party management with over 100,000 units under management, centralization is about enhancing operations and providing the “Mint Experience” — a strategic response to the evolving demands of multifamily operations and renters. As the industry grapples with increasing complexity, the company has leaned into centralization to sharpen its focus and drive efficiencies without compromising service quality.

Christi Weinstein, BH’s COO, explains their approach: “We have been evolving the assistant property manager role, moving it into a virtual environment using the four pillars of centralization: contact center, centralized screening, centralized resident account management, and renewals.”

This transformation isn’t just about moving tasks offsite — it’s about rethinking how they are performed. Weinstein elaborates, “We may have outgrown what we can reasonably expect of individuals in property management positions — the risk is that we ask our people to be good at too many things. It’s better to task specialist teams with some of the more advanced tech-enabled activities.”

This is a vital lesson for third-party managers navigating tight margins and rising expectations from renters and owners alike: by narrowing focus, you can elevate both efficiency and service quality.

BH’s efforts underscore the power of specialization in centralization. By shifting administrative functions to centralized teams, the company has addressed a longstanding challenge in multifamily: the mismatch between traditional onsite roles and the demands of modern property management. As Weinstein notes, “Administrative errors can be costly, particularly when we account for compliance considerations. Managing these activities through a specialist team is better than leaving them open to individual interpretation at each property.”

This targeted approach reflects the future of centralization: a focus on precision, not just simplification. BH’s model demonstrates that success lies in using centralization as a tool to enhance — not dilute — both the quality of operations, as well as, team and renter experiences. 

Reengineering maintenance: finding efficiency in complexity

While centralization in administration has gained significant traction, maintenance remains one of the most challenging areas to streamline. For the RMR Group — a leading U.S. alternative asset management company, unique for its focus on commercial real estate (CRE) and related businesses — the solution lies in rethinking how maintenance tasks are organized and executed.

David Perez, Senior Vice President of Multifamily at RMR Group, explains their innovative approach: “We are bifurcating maintenance activity into those that are work-order-centric and those that are punch-centric. This allows us to organize turns more effectively.”

This structured method is about more than just better organization — it’s about leveraging technology and centralized oversight to unlock efficiency across their portfolio. RMR’s approach highlights the untapped potential of maintenance centralization. By separating routine work orders from the intensive, time-sensitive process of unit turns, they’ve created a framework that reduces redundancies and optimizes team performance.

Perez also points to another opportunity: regionalizing maintenance management. This strategy reflects the broader challenge in centralizing maintenance: balancing the need for local responsiveness with the advantages of centralized control. By implementing thoughtful processes and leveraging data to guide decisions, RMR Group offers a glimpse into the future of maintenance centralization — one that prioritizes precision and scalability.

A vision for the future

Centralization is not a trend; it’s a necessity. As leaders like Livingstone, Weinstein, and Perez show us, success lies in adapting the model to fit the unique needs of the company. Whether it’s supporting site teams through change, leveraging tech-enabled specialists, or reimagining maintenance processes, centralization can unlock significant operational benefits.

At Funnel, we’re proud to support multifamily operators in this transformation. With our renter-centric platform, we empower companies to achieve centralization without compromise — because a better way isn’t just possible; it’s essential.

Download Dom Beveridge from 20for20’s recent white paper Centralization for Third-Party Management.