Efficient Office Building Factors to Track in Commercial Property Management
In any commercial office tower there are always plenty of things going on that require control and optimization. The larger the property or the greater the number of tenants in occupancy, the requirements of commercial property management escalate. The landlords owning such buildings need high quality help.
Many factors in the daily operations of an office property should be set to a plan and will require specific monitoring. Over time key decisions are made. The tenants, the landlord, and the property manager are all evolving in the successful performance of the property.
It should be said that the management of any property is not just the collection of rent and the maintenance of the overall property; if things were that easy then most property owners would self-manage. Any good quality office tower or commercial office building really does require a specific management strategy that is implemented by experienced people. That is why good fees are charged and set for professional services offered.
So How Can You Get Started?
So let’s look at some of the bigger ticket items to get things started. These items below should be merged into the professional property management service in any high quality office property:
- Tenant review – Spend time understanding the tenants in the property from a lease and occupancy perspective. Some of those tenants will be long term occupants if circumstances allow and if the rents for the property can be correctly negotiated. If you spend time in meeting with all of your tenants regularly you can help with any factors of expansion and contraction that may be useful to them in ongoing occupancy. Ideally you want to keep your good tenants for the longer term; you don’t want them to move location or property simply because another building nearby has cheaper rents. Regular meetings with every tenant in a managed building to discuss space requirements and business activity will help you find factors of concern early. Ideally you want to know if the tenant is under any pressure or has to go through some form of occupancy change and adjustment.
- Lease documentation – There are many variations of lease documentation to consider and your local property laws will have something to do with that. All tenant occupied areas in a property will be (or should be) documented by correctly formed leases, licences, or deeds of agreement. Every occupancy document should be read and understood for the long term impact on the property; understand the critical dates and occupancy terms that need addressing so that the investment plans of the landlord are not impacted by unexpected changes. Track all upcoming critical dates out to 18 months prior to the required event. In that way you will be ready for changes and decisions.
- Income predictions – The rent for any property will shift and change for all types of reasons. Ultimately the target for most quality office property is to keep rents under control or at least within predictable ranges for the landlord. If the rents in a property are beyond market conditions then you are likely to push tenants out of the property and drive up the vacancy rate.
- Property expenditure – Every day there will be plenty of things to control from a maintenance point of view; costs will be involved. When you have a large number of people moving through a property and tenants in occupation, the maintenance factors will escalate. Retail shopping centres are a good case in point; office towers are quite similar in demand and expenditure activity. The great number of people moving through the building will put challenges on cleaning, lifts, escalators, energy, and security to name a few. That expenditure should be carefully shaped so that the net income for the property is not unduly impacted by operational costs that are beyond the ordinary for a property of its type in its location.
All four of these issues can be broken up into sub topics and activities to be tracked and optimised. A good property management system with the right people controlling the process will help with property performance.
