In this property market where deals are sometimes harder to put together, the value of the commercial property manager is high in maintaining and directing a sound and good level of commercial property performance.
Why does a property owner need a good property manager? A well-managed property will always attract better buyer interest at the time of sale, or tenant interest at the time of lease.
So many owner-managed properties reflect and show the poor asset management skills or history of the owners. Over time you see many owner-managed properties become more distressed as investment assets.
Unfortunately, many of the self-managed property owners without real property management experience only focus on net income and keeping the property occupied; on that basis, the property can and usually does deteriorate.
Owner Managed Properties
Inexperienced property owners that self-manage, typically overlook the real skills that surround a successful property performance and the asset or business planning process.
The problem is that they do not put money back into the property to attract customers and improve retail sales.
What can happen here? So in comes the professional property manager working for a specialised commercial or retail real estate agency. They then have some work to do.
Essential Property Manager Skills for Today
The property manager skills needed in this market are quite specific. Every day there are things to do and control. The more buildings and tenants that you manage, the busier you will be.
Many property managers work to a system each day, so they can watch the important issues and control them within a reasonable degree of success.
Property Management Focus
What are the main things they can focus into? Here are the main ones:
- Lease management of rent reviews, options, make good provisions, tenant covenants, landlord covenants, and renewals. Every lease for each tenant will likely be diffferent. That then takes a good degree of lease control and management. Every lease has to be checked to ensure critical dates and lease facts are known and prepared for. Any missed dates can create big problems for the property owner and investor.
- Tenant mix optimisation to build the property on the local demographic of customers and the community. When you have multiple tenants in a large property, such as a retail shopping centre, there are some ‘checks and balances’ to get right. The clusters of retail tenants and the zones of the property should be assessed for the best tenants and the right business types.
- Tenant category and grouping is valuable. Over time you can establish a list of tenants by category and priority. A simple selection can be split into ‘A, B, and C’ class tenants. The level ‘A’ tenants are essential to the property and you would want to keep them, ‘B’ class tenants are good for the property for the longer term, and ‘C’ class tenants you are going to move on at the end of the lease. So there are tenancy lease packages to consider here. Make the right choices with your tenants, and the leasing and property management results of the property will improve.
- Maintenance management and cost optimisation that matches the benchmarks of relevant property types. The idea here is to ensure that a managed property is operating at a maintenance level where the operational costs are within the averages for the precinct and property type. Most of the maintenance of a commercial or retail property can be maintained to a strategy and that strategy can be in the business plan for a property.
- Outgoings management to a budget and lifecycle plan for the property. Operational costs in a commercial or retail property typically go up each year. That is where the budget is so important to the end result. Older properties are also more expensive to run operationally, so plans and strategies are required to control breakdowns and the function of the essential services plan and equipment.
- Landlord reports and communications processes that keep them up to date on income, expenditure, vacancies, leases, building codes and compliances. Many property owners as landlords require special end of month reports. All of the information in those reports must be checked and readied for the landlords. In other words, ensure that your reports are accurate and all lease and financial matters are correct. There is nothing more embarrassing than sending out a landlord property report that is full of errors that should have been corrected and updated.
- Energy efficiencies for the best property performance are an ongoing challenge. Energy today is a big part of occupancy costs for tenants. Any property owner that can offer an energy-efficient property strategy to tenants, will have a leasing advantage.
- Marketing of vacant tenancies into the local business community. Most businesses look to relocate or expand their business operations in the local area. Canvass the local business community regularly so you can know what the tenants are thinking and when they may consider moving. Simple questions to local tenants can help you understand that.
- Tenancy and property inspection processes. When doing that ensure that you keep photographs as a record of the event and the status of things. It is remarkable just how often you have to refer back to photographs and notes from previous property inspections.
A skilful manager brings many strategies and controls to the landlord’s property; whilst fees for property management service are always impacting the net result for the property.