In commercial real estate property management, your job will benefit significantly when you use a checklist for the Handover process. When it comes to bringing a new property into your management portfolio, there are so many things to think about and control over just a short period of time. That is where the checklist gives you a distinct advantage. The process will also support you professionally as an industry specialist.
One of the targets of the Handover process is to capture and cover all of the current issues in the property that will have an impact currently and into the future. You may be taking the property over from another property manager or landlord and they may be somewhat reluctant to pass over current tenancy and property information. They may also be less than thorough when it comes to property detail and current correspondence. You are the person to control and capture the information that comes to you. Asking the right questions will help you professionally.
When you take over any new property into your portfolio, the first three or four weeks are intensely busy with tenant communication, property inspections, maintenance management, and establishing the financial records for ongoing income and expenditure recording.
Here are some things to help you with establishing a checklist that can work for you with your commercial property management control system:
- First and foremost you need to understand the cash flow that comes from the rental and the outgoings with each of the tenancies. That will mean a thorough lease review of the original lease documentation. The lease review that you do will need to be checked against the tenancy schedule that you are being provided with. When you are satisfied that you have the necessary and correct lease information, you can put that into your commercial property management software package.
- Inspect the property thoroughly and completely to understand its physical function and layout. Check out the current levels of maintenance that apply to the essential services and safety equipment within the building. Talk to the maintenance contractors as part of that process. Look for any breaches of building safety or maintenance activity. Ask about any orders or notices that apply to the building currently.
- In a property with many tenancies, you are likely to inherit some leases that are soon to expire or have expired. You may also have some vacancies in the property to fill with new tenants. This then says that you should develop a lease marketing strategy for those vacancies.
- Review all of the leases and the tenancies to understand factors of upcoming expiry, critical dates, rent reviews, options, refurbishments, and other important lease conditions. These factors will need to be captured into your property management software program so that you can respond and act at the right time. Many a property manager has overlooked a critical date only to find that significant occupancy problems and cash flow disruptions result.
- Every landlord will have some goals and targets that apply to the function of the property. Meet with the landlord to clarify and qualify those targets so that they can be merged into the communication and reporting system for the property into the future. You need to know what the landlord requires of the property physically and financially.
- The income and expenditure activity in the property will be vital to help you set and maintain future financial performance. This then says that the historic performance of the property should be obtained and checked. The current outgoings budget for the property will also have relevance to the future. Split up all financial factors that apply to income and expenditure so that you can analyse and identify any shortcomings.
- If your property is of a retail nature, you are likely to have some further challenges relating to property marketing, tenancy mix, clustering, and tenant management. It should be noted that shopping centre management and retail property performance is far more complex to that of and industrial or office property. On that basis your fee for service with any retail property should be significantly greater.
These are some of the main factors that apply to the Handover process. Over time you can develop a checklist that specifically applies to the different property types such as industrial, office, and retail. This will help you greatly when it comes to expanding and growing your portfolio as a property manager.