In commercial property management today, the opportunities to pitch your services are sometimes difficult and few. That is because most clients and property owners will not change property manager until the property is in a sale or a lease condition. If you have serviced by property owner satisfactorily during that process, it is quite likely that you can move to a property management proposal. The same can be said of the situation when it comes to introducing a buyer to a property that you have currently listed.
So every opportunity should be taken when it comes to pitching for the property management appointment. Make sure that you have the best solutions available to the client as part of moving their property forward strategically, whilst improving the asset in a number of different ways.
Most clients will look to an improvement in the following categories:
- Rental structure and strategy
- Net rental achieved from the asset
- Outgoings and expenditure control
- Risk management
- Maintenance control
- Lease strategies and lease optimization
- Vacancy minimization
- Tenant management
- Maintenance contracts management
Putting all of these things together, it is easy to see why the structure of the property management proposal is real and relevant. Your services need to match the requirements of the client and the property over time.
The property today is likely to be quite different in 12 months. Look to the future demands of the property and how you can improve it over time. Structure your fees for escalation when the property reaches the new phase of growth.
As part of your proposal to the landlord or the property owner, consider the following factors in your proposal documentation:
- Any property with a number of tenants in occupancy should feature a business plan and asset plan. The different cash flows coming together should be structured into a property budget of income and expenditure. That is why you need an asset plant and or property performance plan.
- The holding intentions of the landlord should be understood. Some landlords will hold a property for a considerable length of time whilst others will on sell the asset within four or five years. Those different life cycles and holding patterns will have an impact on rental strategy and lease strategy. The leases and the rentals that are determined for the property will need to enhance the sale potential at the right time in the future.
- Look at the income profile for the property today with the leases that currently exist. Some of those leases will be of a high standard, whilst others will be problematic. Determine the leases and the tenants that provide challenges to the property and look to remediate or resolve those challenges over time.
- The vacancy factors within the property should be assessed both today and for the future. Any upcoming vacancies should be tracked for alternative leasing strategies and rental structures. Some tenants you may wish to retain within the property and on that basis a tenant retention plan will be part of your property management proposal.
- Split your tenants between specialties. When it comes to a Retail Property you can determine the levels of sale turnover that apply to each tenant category. In that way you can identify the tenants that are more successful than others. That will then allow you to modify the tenancy mix and the lease profiles to improve the overall property. That will in turn have some reflection on the market rental and strengthen the occupancy for the landlord.
- The property should feature a standard lease that is targeted at the landlord’s property ownership and investment strategy. Work with the landlord’s solicitor to determine the lease that will work in that regard.
- When it comes to managing the expenditure within the property, take care when it comes to the older properties with the excessive demands on plant and equipment and larger capital item replacements. The failures of plant and machinery over time can be a significant drain on the income from the property.
- Review all the leases as they apply to the tenancies and occupancy. Understand the rent reviews and options that need to be attended to inside of the next 12 months. They should feature as part of your proposal or recommendation to the client regards property management services.
So you can do a lot when it comes to putting forward your services as a specialist agent in managing a property. There’s more to do than just managing rental recovery and income. A good property management service will comprehensively cover all of the above issues plus more. Make sure that your proposal addresses all of these things and makes the appropriate recommendations to the clients.