In a commercial real estate agency the goals of a commercial property manager are totally different than that of an agency salesperson. Whilst the commissions generated will be important to both, the ways that commissions are achieved are very different. Goals therefore need to be set from different perspectives.
It can be said that the goals and planning processes in ‘property management’ are even more important to the agency than that of ‘sales and leasing’; that is because the management division is likely to have a greater longer term impact on the agency performance.
A successful property management division will provide good commissions, leads, and fees through leasing, sales, tenant mix changes, and tenant retention plans. It can be said that the division is a ‘captured market’.
The Best People
To have a successful management portfolio you need good people within the team. They require a certain mindset and skillsets that are biased towards professional and quality service in both income and property performance. Experience is required to achieve that level of performance. The clients served in the portfolio are at the centre of everything.
Do you remember the old saying, ‘When you pay peanuts, you get monkeys’? That is certainly the case in staffing a property management division of a commercial real estate agency. The top people in the role require top money, or they will move on to another agency. The management fees from each property should be set accordingly (to keep and attract quality managers). You will only get the top management fees from a quality property and a realistic client that requires the best service. Fee conversions depend on how you pitch for the management and how you provide the valuable services to the client.
Here are some realistic goals for the property management division. These goals or targets should be tracked each week so that problems can be seen and adjustments can be made.
- Numbers of properties under management
- Numbers of clients in portfolio
- Numbers of tenants per property manager
- Commissions and fees earned per client and per manager
- Vacancy rates across the portfolio
- Arrears outstanding and aged debtors
- Leads for new managements
- Maintenance requests outstanding
- Lease renewals and extra fees generated
- Timeliness of monthly reports to property owners and clients
- Property inspections completed
- Income collected by manager
It is worthwhile doing a monthly ‘spot check’ of the properties and filing systems of each manager to ensure that best practices are being implemented and maintained. As part of that process you can have a procedures manual to set standards across the department or division.