The commercial property management process is quite special. The same can be said for retail property management and or retail centre management. In any commercial real estate brokerage, quality management portfolios should be serviced by top managers and experienced people. In saying that, experience and expertise costs money; this means that the fees that are charged for your professional services should be well considered and matched to the requirements of the property and the client.
It can be difficult to achieve growth of any property management portfolio without the right people within your team providing the correct levels of skill for the property types. Errors will be minimised when the right people exist within the team. In larger properties, the team of people applied to managing the asset can be large and specific to the disciplines of:
- Lease administration
- Income and expenditure management
- Property Maintenance
- Property and building compliance
To help achieve your top rankings within this demanding brokerage service segment your real estate property management style and business model needs to be exceptional. Special skills are required when it comes to pitching and presenting on the complex properties of high value and diverse tenancy mix. Experimentation and inexperience should be removed from your property management team; you can do that through using re-education and knowledge improvement for all team members. Here are some ideas to help you position your agency as specialists in any property management presentation with any new client:
- First get to know the client as to their property focus, investment requirements, and reporting needs. These three things will have an impact on the way in which you negotiate leases, control vacancies, manage the cash flow, and maintain the property. Clients owning larger properties will have specific needs and criteria to be satisfied as part of the management process.
- It is quite likely that a highly experienced manager will be required for the larger and more complex investment properties. In saying all of this, I go back to the point that the fees charged for your services should be matched to the requirements of the property, the needs of the client, and the people deployed on the project. You cannot calculate that fee from a simple percentage of passing income; take into account the amount of time and experience that the property will require in weekly management and reporting. Look at the demands of the property over time when it comes to budgeting, tenancy mix, maintenance, and cash flow.
- Most properties will be competing in the local area for tenants and in the case of retail shopping centres you will be concerned about attracting customers. On that basis you should identify the weaknesses in the current tenancy mix, estimate the exposure to vacancies over time, and look at the lease documentation currently. Before you pitch or present for any new property management appointment, take the time to understand the tenants, the leases, and the cash flow. Older properties may have a high degree of volatility when it comes to these issues. Develop your strategies in handling those destabilising factors. Those strategies can be part of your property management presentation and incorporated into your proposal. They should also be costed into your fee base for professional services.
- When reviewing a property as a potential new management in your portfolio, have a good look around the particular property for maintenance problems associated with redundancy, refurbishment, and difficulties in the tenancy occupation. Be aware of the environmental and operational pressures that apply within the property. Look at the building compliances when it comes to current building codes. A full maintenance assessment of the property will involve all plant and machinery, interviewing the current maintenance contractors, assessing the budgets relating to maintenance, accessing a current income result or estimate, and obtaining an accurate expenditure report showing net income trends against operational expenses. Is the property being well maintained? The answer is critical to your property proposal.
- When a new client approaches you for a proposal to manage their property, they will quite likely provide you with a tenancy schedule. Whilst the document may be helpful to the process, it should be completely checked as to accuracy and cross referenced against existing lease documentation and the physical tenancy mix. That will take time depending on the size of the property and the complexity of the mix.
All of these things will help you assess the services that you can provide in property management to your new clients. Take the time to understand the property comprehensively and fully. In that way you will not make errors when it comes to matching the right people to the right property and in doing so achieving the correct level of commissions and fees.