There is a certain ‘attainable mass’ of properties in commercial or retail property management that will seem to create its ongoing portfolio growth momentum. Getting up to and beyond that point is the focus for many brokerages. (NB – you can get plenty of commercial property management tips in our Snapshot program right here – its free)
Typically, and for a few years at the start of a brokerage, the conversions of new properties to managements can seem slow and difficult, but eventually the numbers of managed properties start to strengthen and get easier. Persistence and professionalism will generally ‘pay off’ with new business over time.
The Commercial Property Management Equation
That ‘attainable mass’ is usually a ‘formula’ or several factors coming together for a brokerage; there are many variables at play with a team of property managers and portfolios. Some of those variables should be optimized over time. Here are my observations on that special ‘formula’:
- Team – good property managers are hard to find, given that the work they do is special, deliberate, and ongoing. A professional property management team will usually be created through a mixture of chosen people with their skills covering off on the disciplines of leasing, tenant controls, maintenance, legal issues, income generation, vacancy minimization, property improvement, and asset performance. A professional property team is a balance of all those things. The people in the team should be well chosen.
- Talent – some asset/property managers will have established skills and experiences that they can bring to the brokerage, the clients served and the properties managed. Those skills should be directed into unique property performance systems that match the needs of selected VIP clients in the portfolio. When you manage a large and significant property, the service systems should be well structured for that asset and the client’s investment targets.
- Fees for work undertaken – it is a known fact that appropriate property management fees are created through a fine balance of people, tasks, and client requirements. To keep a client happy, you need plenty of resources, time, and systems. So, the fees for
- Quality properties – large properties are good to manage for several different reasons including accumulated fees, profile, growth, and professional business practices. A larger and good quality property under management will be a ‘flag-ship’ for other local owners and investors to see and appreciate. Prove that you can manage the quality properties with success and control. Use your existing managements as leverage in growing your portfolio.
- Better clients – choose your clients well, as some will be better than others from a fee-paying perspective both now and into the future. Split your management portfolio up into separate client and fee groups. Soon you will see that the bigger and better properties stand out and should be your new business focus; daily service should be directed into those buildings that really do offer you the future that you require for the brokerage and managed portfolio. Over time, drop off the low-quality buildings and clients that you currently manage; work to the rule of ‘quality’.
- Established professional systems – the software systems in commercial and retail property management today are unique; some of those software systems are better than others, particularly with the larger and more specialized buildings. Choose the software systems that you can afford and that you can understand.
- Marketing processes – to get new clients and new properties into your managed portfolio, it is essential that you have a marketing process to support ongoing contact with relevant local information for investors and property owners. Letters, emails, brochures, and newsletters should be structured to show your clients that you have all the tools and the people to manage a property very well.
So, there are some good ideas and strategies here that can evolve in commercial or retail property management, as you strive to grow the portfolio. Use some if not all of these business ideas above to get things started.