In commercial and retail property management today, you should have a very definite handover process that you can implement simply and effectively. This can be a significant strategy to capture the required information relating to the property, the client, and the location. In this way you can move ahead accurately to protect the income and the tenancy mix for the client.
Any new property coming into your portfolio can be complex. There can be issues within the property that are hidden from any general overview. That is where the checklist will help you drill down into possibilities and challenges.
Here are some issues that you can merge into your checklist process. You can add to the list based on the location of the property, your town or city, and the improvements. It should also be noted that separate checklists should apply to office, industrial, and retail property types. Each property type will have differences in levels of focus and questioning.
- Inspect the property comprehensively before you get into any analysis and questioning process. You need to understand the property physically including the tenancy mix, the location, and the neighbouring properties. Look for any issues that could have an impact on property function.
- Check out the zoning relating to the property and its location. Look at the local development plans as they apply to the region.
- Assess the factors of supply and demand that apply locally to the property type.
- Understand how people get to the property and move through it. That will require an analysis of transport and road usage. This factor is quite important when it comes to larger properties and shopping centres. The customers and the tenants to the property will access it in different ways. Understand how that occurs.
- As part of the initial property inspection, take plenty of photographs. That will help you remember the key issues and the layout as they apply to the tenancy mix and the building structure.
- Understand the local regional property demographic. There may be other properties of similar size and type locally. Those other investments are likely to place pressures on your vacancy factors and tenancy mix.
- Assess the tenancy mix for its activity today and any threats to income and occupancy. Look at the critical date factors that apply in each case and with each lease. Any upcoming critical dates will need to be responded to efficiently and in a timely way.
- Ask the landlord about any tenancy matters and outstanding disputes. Get copies of correspondence that relate to those things. Seek instructions from the landlord accordingly.
- Undertaking a full lease review. All lease documentation should be checked against the current rental invoices and the tenancy schedule. Look for any discrepancies or changes.
- Ask questions about the risks and liabilities that could occur with the property as a physical structure. There may be issues relating to property usage, maintenance, access, and tenant occupancy. It may be necessary to get a building report undertaken by engineers and specialist consultants.
- Meet with the maintenance contractor’s to the building. Find out about current repairs and outstanding issues.
- Review the maintenance budget and the income and expenditure budget that exists for the property today. Check that it is accurate. Understand how the actual income is tracking towards budget. Look for any discrepancies in the cash flow.
- Look at the vacancy factors in the property today, and understand the strategies behind vacancy marketing and leasing. It may be necessary to undertake a fresh tenant mix approach with the pending vacancies.
- Check out any existing fit out works that apply to occupancy or building renovation. Ensure that you have the necessary planning approvals and approved drawings. There may also be a need for property re-survey as a result of building modification.
So this is just the start to the commercial property handover process. As you can see, there is a real need here for a checklist so that you can stay on track accurately and efficiently. Ask questions at every opportunity, and document the answers that you get from contractors, tenants, and the landlord.