Why Negotiation Skills in Commercial Property Management Really Do Matter
In commercial and retail property management, there are many situations that require good property negotiation skills and communications.
Property managers must have plenty of business acumen and knowledge to handle all the lease events and occupancy issues coming their way. The larger the property, the deeper and more complex the issues over time.
Diplomacy and Accuracy
So, what does a property manager need to be good at with their negotiations? What do they need to look for? Here are some of the main ones to start with:
- Tenant contact – there is a real requirement to stay in contact with tenants across a property and or a portfolio of properties. That can be a difficult task as the numbers of managed buildings rise, or the complexity of those buildings lift. The greater the number of tenants in a building, the busier the property manager.
- Property documentation – leases, licenses, and associated legal forms will underpin a tenant’s occupancy and or rental payments. They will also impact the landlord’s investment outcomes. Lease compliance is a big thing in property performance today, and the property manager is the person to control those things. Every lease and tenant situation must be reviewed for accuracy, compliance, and timeliness. It is helpful to undertake a full lease assessment on a quarterly basis to pick up any compliance and critical dates coming up in the next 12 months.
- Lease compliance – these are the factors of occupancy that must occur due to a date, an event, or an occupancy issue. Tenants and landlords both must comply with lease terms and conditions. The property manager is the right person to watch and implement the events for both parties. The word ‘timeliness’ is important when it comes to lease matters. Look forward in the upcoming dates of a lease for the next 12 to 18 months; in that way, you can act early on important things relating to occupancy.
- Vacancy marketing and negotiation – there will be vacancies in a managed property. Watch for situations of vacancy existing and coming up. There are ways to market a vacancy into the local business community; the personal approach is the best way to do that by talking to local people and seeking information about what they are doing now with their business and how they see any changes coming up.
- Maintenance contractors and contracts relate to the property – costs can be saved with some maintenance contracts, although the works to be done should be completed correctly and in a timely way. There are plenty of instances where a ‘cost-cutting’ process on property maintenance will have produced unacceptable risk and presentation outcomes.
- Income and rental negotiations – property rents can be made up of different elements such as occupancy, maintenance recovery, the base rental, turnover rents, outgoings recovery, and license fees for special areas. Every rent and income stream should be optimized within reason and with due regard to property market conditions. Know the local market rents, and how your leased or managed property situation compares. Optimize rentals but don’t create a situation of unrealistic occupancy conditions where a tenant may leave the property when costs are high.
- Landlord contact and reporting – approvals are part of a professional property management service. Some landlords take convincing when it comes to spending money or accepting a new lease or a new tenant. You can add to that list the maintenance costs and expenses in a property. All elements require reporting, recommendations, and negotiation. A solid awareness of the full situations or tasks at hand will help a property manager achieve a positive outcome with the landlord client.
- Budgets – a property budget will involve discussions about cost associated items such as rental, expenditure, capital works, and property operating maintenance. All the elements of a property function will be in the budget, and negotiations will happen to keep some parity with expected financial outcomes.
- Customers – there are plenty of customers coming to or moving through a property over a working day and business day. A shopping centre is a case in point. Some customers need control and or communication. Risks, damage, lost property are all. Factors of negotiation that involve customers. Systems are needed to work with the customer related communications.
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