The ‘Quiet Engine’
HSL Management Services ‘Keep the Numbers Straight’
By Jay Gonzales
When projects and assets range into the tens, even hundreds of millions of dollars for a company, it comes with an ocean of numbers that have to be tracked and analyzed that can seem more like a tidal wave.
At HSL Properties, it’s no small piece of the business. In fact, HSL Management Services operates as its own company within the umbrella corporation, and for good reason. With HSL’s multiple lines of business – apartments, hospitality and construction – it allows Management Services to keep itself and the numbers organized for everyone.
The team of eight accountants and financial professionals is the “quiet engine” that provides the financial bookkeeping, analysis, tracking, forecasting and, most importantly, discipline for HSL, said President Omar Mireles.
“They keep all the numbers together, and they do it very quietly,” Mireles said. “There is always the showcase of the project and the construction and the acquisition because it’s news. But they’re the ones that keep the numbers straight.”
An example of the magnitude of the work is one of HSL’s recent, high-profile projects, The Flin, an $80-million, 245-unit downtown residential development that literally is just a sliver of the HSL portfolio of 42 multi-family apartment complexes, 11 hotels, and four commercial buildings among other investments.
Managing the financials of those properties is only a piece of what the organization does for HSL, said CFO Michelle Howell, who heads the financial team.
“We like to call ourselves the small but mighty team,” Howell said. “We pump out a lot of work month-in and month-out. We have over 200 entities that we manage and prepare financial statements for on a monthly basis.”
Management Services is where Mireles and the executive team go when they need financial analysis of a project they’re considering. That would involve projecting costs of labor, supplies, taxes, and anything that goes into determining the feasibility of a project − even the timing of a project.
“We need to make sure that we’re opening a hotel during the busy season,” Howell said. “You also have to take into consideration the investor interest level, depending on what type of asset we’re going to be building − whether that’s a hotel or apartment.
“We’re here to help with any sort of financial data analytics that they need, and then they are the ones at the end of the day that really to get to decide,” she said of HSL’s executive team. And even when all the data and projections are in front of them, some projects that seemed feasible might not be in the end.
“We’ve experienced where it’s just not feasible and we cut ties and put it on pause,” Howell said. “Then there are some times where we have to make adjustments. When supply chain issues happen, it may delay a project, or it may make a project more expensive than we initially anticipated.”
That is another place where Management Services steps in after a project is underway, said Controller David Arp.
“We’re handed the budgets on these projects, and it’s just a matter of seeing the subcontractors’ contracts and making sure that what we’re contracting for meets the budget,” Arp said. “It really is just kind of getting that budget, doing the analysis of our subcontractors, and making sure everything is built appropriately.”
If the project is big enough to need an outside investor, which Howell said is the case with “nearly all” recent HSL projects, it’s Management Services that works with that investor, providing the information they need to make a sound investment decision and to track it.
Management Services keeps the investors informed through a portal where investors can track their investment. And there’s always the good old telephone.
“We take phone calls from investors anytime they have a question about an investment,” said Howell. The task also willingly falls to Mireles and company founders Humberto Lopez and Glenn Toyoshima who still are involved in the operation of the business.
That has helped HSL establish a loyal following of investors that can now be described as generational due to the trust that’s been established over the years.
“We have a lot of investors that have been with us since the beginning of HSL,” Howell said. “Their trust in HSL has now extended to their children, so their children have seen the success that their parents have had with our investments.”
Pictured above from left – Michelle Howell, CFO, HSL Management Services; David Arp, Controller, HSL Management Services. Photo by Brent G. Mathis
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