After allegedly fraudulent deals, who operates a building?

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In the wake of rising interest rates and mounting scrutiny, a spotlight has been cast on a subset of real estate investors who, while adept at financial engineering, lack the basic operational skills to manage buildings.

This lack of operational ability often has real consequences. Reports on various investor portfolios have described unsanitary conditions, heat outages, and even mass evacuations during holidays. Tenants often found themselves with no way to get help, while financial crimes and property neglect spiraled.

It’s just a totally different world,” Alex Argento, Senior Vice President – Head of Southeast Operations at AKAM, said. “You’ve got to talk to tenants. Developers are not going to talk to tenants.”

The core issue lies in the detachment between finance-focused investors and the actual work of operating rental housing. Property management requires local knowledge, time on the ground, and meaningful relationships with vendors. Trying to manage buildings from afar — or by underpaying staff — leads to operational collapse.

With many fraudulent deals in the housing market, more and more properties are being mismanaged or abandoned, contributing to the overall housing shortage and exacerbating the affordability crisis. The point being: property management demands presence, consistency, and responsiveness, and ownership alone doesn’t make someone a true operator.