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Developing property management team work

 

When managing any commercial or retail property, the size and the complexity of the individual asset will create pressures, activities, and responses as part of the property management process.  You could very well need a team of people to help you achieve the best management results for the client and the property; that will impact both your fees and your approaches to service.  The structure of that team will be important and particular roles will be needed to control the asset effectively.  Its a great part of the industry, and special people are required.

(N.B. these ideas are also sent out to regularly to our friends in Commercial Real Estate Online Snapshot to help amplify brokerage results…. Get your access here)

 

Team skills

 

Large properties require special people and unique skills; they also require control across income, leasing, tenants, and maintenance.  Ultimately there is usually a property management team behind the process of day-to-day property function and good investment performance.

 

Property factors

 

The size and age of the property, the size of the tenancy mix, and the property layout and its complexity will have a lot to do with the size of your management team and how they interact with each other, the tenants, the client, and the visiting customers to the property each and every day.

 

Understand the demands of the property that you manage, and then shape the property management team for the best results; the property needs to be controlled and optimised as an investment for the various stakeholders.  The stakeholders are particularly the tenants, the landlord, customers visiting the property, and the financiers funding the project or the property as an investment.

 

Reporting

 

Some special considerations will also need to be made when it comes to servicing the client and providing the reporting requirements that they have for the asset.  In the larger properties, the reporting requirement can be daily, weekly, and monthly across income, expenditure, leases, tenant matters, and maintenance.  At the end of every financial year there will also be a complex series of processes and reports to support financial, lease, and tenant mix assessment.  All of this gets tied together with a business plan.

 

Team model

 

The following is a typical model for a large commercial property management real estate team in a modern office or retail complex.  Look at these factors and see how you can make them work for you and your team.  Perhaps you will not need all roles to be fulfilled, or perhaps you can ‘double up’ roles to achieve economies for the client and control for the property.  Remember that real skills are required in each role:

  • The Property Manager or Centre Manager is ultimately the person in charge of the property at all times be they good or bad. They are interacting with the client on a regular basis, and tenants almost daily.  The decisions relating to property management and property function will only be made or implemented by the team following consultation with the manager.  That manager must know exactly what the client requires in reporting, financial control, tenant interaction, and investment performance.  All of those requirements will feed into the day-to-day management processes and investment decisions.
  • In the larger properties, there is likely to be an Assistant Property Manager working closely with the principal Centre Manager or Property Manager. That assistant will be interacting closely with the tenants, reviewing the leases, and monitoring the function of the building a practical sense.  In some large properties, you can have several hundred tenants in occupancy and the leases and rentals for each tenant will need to be checked and monitored.  All the more reason to have an assistant to work with the Property Manager.
  • A Lease Administrator will be checking and monitoring the lease documentation on a daily basis. All of the leases for all of the tenants in occupation should be entered into a software based property management program so that all of the critical dates and rental changes can be identified, actioned, and captured at the right time.  It is not unusual to make decisions and work on lease matters relating to critical dates, rental changes, and occupancy issues at least 12 months before they are due to occur.  Most properties today our managed to a business plan and on that basis all of the leasing decisions for the asset are made well in advance in the planning phase.
  • A Tenant Services Manager will be networking with tenants regularly and frequently. The idea here is that they will maintain harmony in tenant occupancy and service.  They will need to know the tenants by type, occupancy, and location.  They will need to know when the tenant’s thinking about business upgrade, expansion, or contraction.  In any large property, the tenancy mix will be split into anchor tenants and specialty tenants.  The tenant mix will then be split down into subsets of tenant groups relating to merchandise category, desirability, and occupancy.  Some tenants you will need to protect and retain in the property for the long term.  On that basis you will need a tenant retention plan to achieve that result.  The tenant services manager should be the person to design the retention plan and ensure that the plan is optimized.
  • A Customer Services Manager will be monitoring the experiences of customers to the property and how they use the property in a regular ongoing way. Safety, service, and information are all elements of this role.  In a retail property the customer services manager has an important part to play to ensure the customers come back regularly to purchase retail goods and services.
  • A Marketing Manager will administer the marketing funds for the asset and any special promotional programs throughout the year. That marketing strategy and requirement is quite common in shopping centre performance and operations.  A well promoted and considered marketing calendar for a retail property will encourage trade and customer growth over a 12-month period.  The marketing plan and the spending of funds will be integrated into the business plan for the property.
  • A Maintenance Manager (and perhaps an assistant maintenance manager) will be maintaining the function and operations of the building for both tenants and customers. There will be different levels of plant and machinery in the property functioning to a daily strategy and operational requirement.  Some elements of plant and equipment will be considered as essential to the property and occupancy.  Other items will be less important.  On that basis the maintenance manager will be administering critical maintenance issues to ensure that occupancy is maintained for the long term.  Maintenance budgets will exist and contractors will be chosen to operate or respond to breakdown and repair issues.
  • A Finance Manager will be collecting rents and outgoings, and then optimizing income performance for the property based on the established and agreed business plan for the asset. That finance person will also have the necessary skills to understand how to optimize the net income for the asset based on careful controls and budgets of both income and expenditure.

 

So there are plenty of people here within the property management team; different managers with unique skills.  They will have roles to play when it comes to the day-to-day operations of the property.  A team of size creates a reasonable control mechanism to the day-to-day function of the property.

 

The costs of the property management team will normally be added back into the expenditure budget for the property as a staff cost.  In addition to the staffing costs, there will be a base property management fee to cover the day-to-day operations of the asset and profit for the service provider.

(N.B. these ideas are also sent out to regularly to our friends in Commercial Real Estate Online Snapshot to help amplify brokerage results…. Get your access here)