Far too many commercial property managers become ‘swamped’ with the events of the day and the working week, thereby overlooking the requirements for new business and portfolio expansion.
Every property manager should have a degree of focus and have time set aside every day for new business activity. Yes, I know that there are a lot of things to do in property management but new business remains a high priority for us all.
What are the Actions to be taken?
The actions to be taken in commercial property management prospecting are a bit different from new business perspectives in sales and leasing. The property management business is one of trust and professional service over time.
Consider these important questions:
- How can you help your clients improve their assets?
- What challenges will arise with those assets over time?
- Why are you better at managing a commercial or retail property than another local agent?
Every client and every targeted property should be researched accordingly. The answers that you give to these three questions should be very specific and not generic. Special property management services will help you stand out as the property manager of choice.
Look for the right new business
To attract the right clients and the right listings you really do need to research your property market whilst looking for the triggers of property management escalation, future need, or any property performance challenge.
So how can you find the new business? There are common factors of distress within commercial property performance to look for. You can provide very specific property management solutions to help clients with those challenges. Here are some of the most common factors of property distress to identify and work on:
- High vacancy factors – When a property has a high vacancy factor there will be ‘pain’ in the income or rental returns for the landlord. The landlord will be ‘ripe’ for help and assistance. Can you resolve vacancy factors effectively and directly? How many local tenants do you know that could move into your vacant property?
- Struggling market rentals – If the market rentals are low or struggling, there are likely to be reasons behind that problem. Perhaps the lease documentation is poor or badly negotiated; do a tenant mix and market rental review.
- Tenants that are moving location – If major tenants are moving location, the landlord will need some solutions to resolve the vacancy. Watch all the movements of tenants locally. Track lease expiry dates and talk to tenants.
- Landlords that self-manage – Some landlords do not manage properties well and they do not have the market information to stay ahead of trends and property performance.
- Properties that have a poor appearance – If a property is poorly maintained then there are issues of concern and reasons behind the issue. Properties of poor appearance usually indicate inexperienced landlords or reduced financial performance.
- High expenditure results from property performance – Property expenditure can be high for a number reasons and control is critical to move through the problem.
- Under rented properties – How does the rent for the property compare to market rents locally? Lease documentation will usually dictate or restrict rental growth. Have a look at the leases and what can be done from a rent perspective.
- Weak lease documentation – If you have a number of tenants in the one property, then it is wise to do a full lease review. Some leases will be better than others when it comes to investment performance and rental and outgoings recovery. Do a full lease and tenant mix review to find the factors of lease weaknesses?