Commercial property managers must understand how to lease properties locally. They must have their ‘finger on the pulse’ of lease strategy, tenant enquiry, and tenant placement. Ultimately the choices and recommendations that they make about a lease to the landlord property owner, will have great impact on the tenant mix and the rental income.
So when I choose to employ a commercial property manager, I do so with an awareness that they should not only have property management skills but they should also have leasing skills and knowledge; that being specifically about the property market in a particular location relevant to the property or the client base.
Key Interview Questions to Ask
In any employment interview with a potential property manager I would question them about property leasing factors and strategies. Here are some of the main ones to get things started:
- Lease interpretation – Knowing the right factors of a lease document to look for and question, and then how to read a lease are fundamental skills to controlling a property. There are different types of leases used in most property markets; the same can be said for renal types and outgoings recovery. The property manager must be able to define these things and tell me how to look for the advantages and weaknesses in each.
- Market rents – What are the prevailing rents in the local property market? They will need to tell me about existing rent levels and the averages that apply in certain property types.
- Incentive strategies – How can an incentive be used in a lease negotiation? What are the different incentives that can be used to assist with the lease transaction and why are some incentives better than others? Good questions will help me see if the property manager really understands the strategies behind lease incentives and how they can work for the landlords of today.
- Outgoings recovery – Outgoings will form part of the rental income structure be it via a net or gross rent. I would question the person about the pros and cons of outgoings recoveries and alternatives used today.
- Rent reviews and options – How can the landlord’s investment position be improved with rent reviews and options for renewal under a lease? There are many different answers here that can be given. The important thing that I want to see is that the property manager can really give me specific strategies of rental improvement allowing for the local property market and the property type.
- Investment planning and reporting – Any property manager will have to interact with landlords and investment clients. Some of those clients will have specific investment requirements and targets to drive rental income and capital gain on property values. A property manager must know how to report on a regular basis to monitor those factors.
- Tenant mix alternatives – How can a property be improved by choosing the right tenants and placing them correctly into a given asset? The answers are quite different when you consider retail, office, and industrial properties. I would want to see some real ideas of relevance to tenant mix planning and tenant placement.
Of course there are many other questions that I can ask a new candidate applying for a property manager role, but these that I have just given you will feature in my interview with any candidate. I want to know exactly how skilled a person is today and what they are bringing to the portfolio and clients within the brokerage.
You can now see why a commercial property manager requires specific skills in leasing and tenant mix strategies.