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Create Sales from Commercial Real Estate Property Management Clients

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In commercial real estate brokerage, many things change during the year for the investment clients that you work for and connect with.  The same can be said for your property management clients.  On that basis there are plenty of ways that we can help with property performance and investment positioning.

Leasing activity links to property management systems, and in turn property management helps with sales activity when it is to occur.  A good commercial real estate brokerage will cover all issues.  One transaction can and should lead to another.

Here are some facts:

  • A good tenancy lease helps rental income and lowers property vacancy
  • A great tenancy mix and rental structure in a property helps the sale process when it is to occur
  • A professional property management service helps with improving net income and minimises risk factors on the landlord.

So they are three very good reasons why a property management client will benefit from the actions of a qualified and capable property manager.

Yesterday I was called in to help with a property management client that has owned the same commercial/industrial warehouse for 20 plus years.  She was thinking of selling the property given that it was hard to lease, and that she believed she could do much better with an investment property elsewhere (I agree).  Whilst there was one small tenant in the property on a monthly tenancy, the majority of the property has remained vacant for a very long time.

The property was old and in need of upkeep.  It was not overly attractive to anyone looking to lease.  There were many other better and newer properties elsewhere for tenants to occupy.

The age of the property had created a ‘spike’ in upkeep costs and outgoings.  That was in turn creating difficulties in leasing; many tenants were put off by the high occupancy costs in addition to rent.

Considering the clients options she could do one of the following:

  • Wait to lease the balance of the property and sell the entire thing as an investment (low probability of success)
  • Do nothing and see what happens in the future (why hold a ‘dead investment?)
  • Leave the small tenant on a monthly occupancy and sell the property to an ‘owner occupier’ as soon as possible (a great idea)

Some other facts of the matter are that the location of the property is great and close to the city, although the asset is prone to flooding in an extreme weather event.   It is hard for a tenant to construct a fit out for the potential of ‘flooding’; it is easier for an owner occupier to do that, considering the longer term and intentions of ownership.  The proximity of the property to the city will certainly make it attractive to an owner occupier to purchase and take the ‘flooding risk’ into property design and layout.

It was interesting to note that the property owner was letting far too many people talk to her about the future and the alternatives; many were ‘well-meaning friends’, accountants, solicitors, and other agents.  The lady was confused.

So what should she do?  She should sell the property.  That is where a good property manager and leasing expert can add strategy and momentum to a sales opportunity.

So what is the end result?  We listed the property for sale exclusively with the method of sale to be determined.  A good result overall for the property owner.  Now the hard work starts.

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One reply on “Create Sales from Commercial Real Estate Property Management Clients”

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