How to Overcome Roadblocks in Commercial Property Management

Show me a commercial or retail property manager, and I will show you a busy person.  Rarely will a property manager have much spare time; 10 hour working days are not uncommon.  Systems of control and reporting are required to keep the workload of a property manager in balance and optimised for the best results.

 

Large properties have teams of people to control and respond to the numerous property events as they happen; shopping centres are a case in point.

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Leasing system for finding commercial tenants

 

Property Management Pressure Points

 

So, why is a commercial or retail property manager so busy?  Here are some of the most common reasons:

 

  1. Large properties are active assets of importance and volatility. Lots of things are happening most of the time with tenants, customers, maintenance people, and property performance.
  2. Reports have to be prepared and submitted on critical property facts such as income, expenditure, budgets, lease events, and critical dates. Every landlord will have certain requirements with their reports and facts.
  3. Maintenance issues will be both planned and unplanned. Either way, they have to be managed to a budget and a safe outcome.  The larger the property, the more complex the maintenance events; risk events also have to be watched.  There will also be ‘unplanned matters of crisis’ that occur, so be prepared for all issues.  It pays to have some structure in place to monitor all the larger mechanical elements of the property to contracts and routines.  If you have a good group of contractors, the maintenance issues are supported by contractor communication and regular reporting.
  4. Financial matters vary throughout the year. Income expectations will vary based on occupancy, leasing, incentives, expenditure, and tenancy movement.  That being said, most of the factors of property income can be structured to a budget, so the client does not have too many variables to contend with.  A good property budget will bring stability to an asset over time.
  5. Undertake a lease audit as soon as possible and stay ahead of lease events and critical dates. The greater the number of leases in the property, the more significant the time required to keep ahead of lease changes, dates, and events.  A lease audit will show you the critical dates and lease changes applicable to rent reviews, options, outgoings reconciliations, and the lease expires.  The important fact to remember here is that all leases should be optimised for a good market rent and long-term  Vacancies will happen, but you can stay ahead of lease vacancies with a proactive marketing campaign to attract new tenants.  That is what shopping centres do most of the year, so they are not exposed to rental disruption when leases come to an end.

 

Taking all of these points in balance, it is easy to see why a commercial or retail property manager is ‘busy’ most of the time.  When they are then loaded with more assets and properties, the ‘busy factor’ just gets deeper.  Ultimately that can lead to stress and property performance problems.  Unfortunately, that is all too common in the industry.

 

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Learn how to handle the struggles of commercial property management

Shopping Center Managers – How to Reposition and Improve a Retail Shopping Center

Any shopping centre today can be a challenging asset from a performance perspective.  There are many challenges to track, balance, and manage.  The skills of the property manager and or leasing manager applied to the task will be critical to asset performance.

Fees for services

It should also be said that the fees to manage any retail property are also usually higher than the fees charged within industrial or office property management.  The skills of the people deployed on the property will reflect on the asset outcomes, so you must employ the right people for the task.

People Costs

Good quality people with the retail experience will cost more from a salary perspective.  The property outgoings should (subject to local retail leasing laws and regulations) be structured through the leases for management fees and staff salary recovery.

Taking on a new property?

If you are taking on the management of a shopping centre from a previous owner or previous property manager, there are many things to look at immediately and specifically.  Getting things under control quickly should be a priority with a retail asset.  You can use a checklist for that process.  Here are 4 specific ideas to help you get started:

  1. Arrears – Let’s start at the money or rental end of property performance. Understand where the rental arrears are and why they are happening.  Separate strategies will be required to get those things controlled.
  2. Vacancies – What and where are the vacancies now in the property and how are they impacting customer and tenant outcomes? Look at filling the vacancies quickly even if you must do short term rentals at lower base rents.
  3. Tenants and tenant mix – Assess the tenants in the property for current issues and volatility. A weak tenant mix will drag down property performance.  Talk to the tenants and ask about customer sales and customer requirements.  It is very likely that the tenants will know what is needed in a retail property to resolve shop placement and mix problems.
  4. Income and expenditureReview the cash flow results for the property over the last 12 months. You will see the timing factors from high cost issues such as rates and taxes, as well as capital expense items.  Then look at current rental levels, vacancy factors, and upcoming rent reviews.  From these things you can create a budget for the property.  The object here is for you to comprehensively control the money coming into the property and flowing out to the various stakeholders.  You can then shape the financial factors of the property in a controlled way into the future.

These 4 factors will lead to greater property understanding and control.  When you can see what is happening in the retail property or shopping center, you have something that you can base your future strategies around.

You can get more tips about Shopping Center Management and Leasing in our eCourse right here.

How to Choose the Right Commercial Property Management Software Solution

In commercial real estate brokerage today the property management division of your business will need a dedicated and specialised property management software program to control asset performance for the clients that you serve.  There are many different software packages around, some of which are of the highest quality, whilst others are very average.

Quality is important

If you plan to provide a professional property management service across the best buildings in your town or city, then you will need a high quality software program that can comprehensively cover the needs of the clients and the challenges of the properties.  There are significant and different management requirements across industrial, office, and retail property types.

In saying that you do need to choose the right software program, there are costs associated with all of the specialised solutions available.  Most of the high quality programmes are reasonably costly although they can be easily funded by the correct management fee structure and a good size property management portfolio.

Understand the reporting solutions

If you want to attract the best clients to your professional property management services, you will need a good software solution to support your activities.  You need something that is well proven and cost efficient, and yet something that is easily able to produce the reports that the clients require.  An informed client is more readily able to make the best decisions in a timely way.

Know what you must control

Understand the informational needs of the clients that you serve across an array of activities.  Consider some of the most common challenges that you strike on a regular daily basis, including:

  • The lease documentation and updates
  • Tenancy mix details and variations
  • Expenditure activity across the various cost codes
  • Arrears controls and reporting
  • Regular tenancy correspondence and communication
  • The landlord reporting requirements and report formats
  • Property maintenance records
  • Risk management and documentation
  • Energy management and tracking
  • Environmental issues and controls
  • Income controls and optimisation
  • Rental strategies and budget expectations
  • Property budgeting for both income and expenditure
  • Premises and area detail
  • Tenant contact, correspondents, and records
  • Outgoings activity and performance
  • Cash flow projections

So these are some of the most common requirements in most commercial property management activities.  At a minimum, the software solutions that you use need to cover these and other issues effectively and directly.

The Categories?

You can see from the list that some of the matters are financially orientated, whilst others are linked to documentation, and also tenancy mix occupancy.  One software package has to cover all of the issues in an accurate way.

Choose the best commercial property management software package that suits your typical client profiles, property types, and property portfolios.  Understand the factors of growth that will occur with your property portfolio so that the selected property management solution you choose can give you the best ongoing support into the future as the portfolio grows and building complexity increases.

You can get more commercial property management tips in our eCourse ‘Snapshot’ right here.

How to Set up a Customer Service Desk in a Retail Shopping Center

As part of the property management strategy for any sizeable retail shopping centre, you can and should develop a customer service station function and service within the property.  I say ‘sizeable’ because you need plenty of tenants in the tenant mix to pay for the customer service strategy.  The cost for operating a service desk can be quite reasonable.

So what’s the idea here with a customer service station in a shopping centre?  Try some of these:

  • It will help customers find what they want
  • It will help control problems and challenges with customers
  • You can use it as a marketing point for competitions and sale campaigns

The station should be located where it will be of the greatest use to the customers within the property and in the common area.  There are many benefits to be had by all with an effective customer service point.

It should be noted that the customer service station is a cost factor for the property that should be allowed for in building operational costs and be potentially funded from property marketing.  There will be salaries to account for and costs associated with the operations of the customer service desk.

Set the Rules

So here are some rules to the process of establishing a customer service station and operations point within any medium to large retail shopping centre:

  1. Integrate security services into the customer service location. There will be many ongoing security issues evolving from both customers and tenants.  There will also be specific factors to consider such as lost children, lost goods, injury, risk management, and personal safety.  The evacuation of the property may involve the people in the customer service or operations desk.  So the desk or customer service point will have a number of roles to fill.
  2. The people manning the service desk will need to be suitably trained and skilled with risk management and injury issues. They may also need to be trained in crowd control, customer service, first aid and safety matters.  The insurance company carrying the risk for the property will have significant interest in risk management controls and safety registers all of which will normally happen from or in conjunction with the service desk and the personnel manning it.
  3. Understand the property and common safety responses and possible risk events. Look at how customers move through the property and into the tenancies.  Special considerations will be needed when it comes to access points, car parking, common areas, and amenities.  How will customers find the customer service desk and or communicate with it in an emergency?  There should be a crisis management plan active that allows for the movement of customers, the activities of tenants, and the management personnel on site.  It is quite likely that the customer service point will be involved in that process.
  4. Lost and found services should be controlled at the customer desk. Registers of lost and found goods should be kept.  In larger shopping centres the amount of lost and found goods on a daily basis is quite high.
  5. The help desk can also guide people in the right direction when it comes to finding tenancies and the common amenities. In large shopping centres that can be a valuable service. A map of the property including all shops should be available at the desk for handing to customers as they seek to find certain tenancies and certain tenancy types.
  6. Some shopping centres incorporate gift wrapping services at the customer service points. When the seasonal sales are active, the strategy works quite well in supporting customers.
  7. Have a place at the service desk where people can lodge applications for casual employment at the shopping centre and with the tenancies.
  8. Gift certificates can be issued from the service desk. Competitions can also be promoted from that location with competition applications being lodged and collected at that point.
  9. Public announcements could occur from the service desk.
  10. A mail drop off point or parcel delivery service can be incorporated into the customer counter.
  11. A directory board should be in close proximity to the service desk. There should be a map of the property incorporated into the directory board layout.
  12. Wireless Internet Services can be made available in close proximity to the service desk. That then is a service for some customers.
  13. Wheelchairs, child prams, and motorised mobility chairs could be hired from the customer service desk.

So the idea here is that the customer service desk is a convenience factor, a communication point, and customer service in many different ways.

Understand the costs of the operations desk or customer service point and the services to be offered.  Build those costs into the marketing budget for the property.  The marketing costs should also be structured and costed into the tenancy leases as a contribution from all tenants across the property.

Tenants and customers will benefit from the establishment of a customer service desk in a shopping centre.

You can get more tips about Shopping Center Management and Leasing in our ‘Snapshot’ eCourse right here.

Attractive Shopping Centers Create Better Customer Sales and Tenant Results

If you are a specialist in retail shopping centre leasing and management, you will understand the importance of retail property appearance and design.  Customers like to feel comfortable, safe, and happy as they move around within shopping centres and look for the goods and services that they require.

A good shopping centre experience will encourage immediate sales and repeat business.  You really do want your customers coming back to your shopping centre in a regular and ongoing way.  The benefits to both the tenants and the landlord are significant over time.

Shopping Center Facts

Consider the following facts:

  1. A GREAT PROPERTY: A successful shopping centre will attract more customers and tenants in an ongoing way. It is quite easy to see when a shopping centre is trading at successful levels; the customers to a retail property can also interpret and see those issues.  When the tenants are successfully trading within the property, the retail sales are likely to reduce both tenant mix volatility and vacancy factors.  So the focus here is to make your shopping centre visually successful in every way possible.
  2. VACANCY CHALLENGES: If you have any vacancies to work with, then do so selectively and professionally. Keep a close eye on your lease expiries coming up and your lease renewals.  Negotiate those issues early and directly with the tenants involved.  Don’t let vacant shops remain vacant for too long.  Put covers and hoardings across vacant shop areas.  Put advertising material and marketing material on those holdings.  What you want to do here is remove the visual negativity of the vacancy from the property and the customers.
  3. PROPERTY PRESENTATION: Set some standards within the property relating to retail tenant signage and shop presentation. The signage for retailers should be commonly positioned and designed.  Good signage will always help with the level of sales and the customer experience.  Signage specifications will maintain the quality and the positioning of that signage.
  4. VISUAL STANDARDS AND ILLUMINATION: Lighting standards will always help with property presentation and believe it or not sales. Most retail shopping centres today are trading at all hours and on that basis seven days a week.  The lighting strategies within the retail property, in the car park, and within tenancies should be suitably specified and maintained.  Poor lighting directly reflects in poor retail sales.  The lighting within the common areas and within the individual tenant shops should be specified for maximum retail impact and customer safety.
  5. WHAT CUSTOMERS THINK: Understand the customer experience from the very time that they enter the property. Look at how customers into the car park, how they move through the car park and into the shopping mall or shopping centre.  Look at the factors of signage, lighting, security, and common area design.  Are the services and amenities of suitable quality to encourage customer use and help them stay longer within the property?  If you can extend customer visit time, you can potentially improve the levels of sales across the tenancy mix.
  6. TENANCY FACTS: On a final note it is worthwhile recommending that you do a full tenancy review and a tenant mix study with any shopping centre on an annual basis. It is a professional service that you can provide to the landlords that you work with.  What you want to do here is understand where the threats to the tenancy mix are potentially derailing tenancy sales opportunity and or customer visits.  The right tenants chosen for the property will encourage shopping centre success over time.  Any weaknesses within the tenancy mix should be resolved or remove over time.  Understand what the customers expect and require when it comes to the standard shopping experience.  Undertake a customer review all marketing survey on a regular basis so that the tenant mix changes are driven from customer information and tenant mix performance.
  7. KNOW THE FACTS: Delve into the facts about the property. When you take a serious look at your tenancy mix, you can see the challenges, the strengths, and the weaknesses with the anchor tenants, and the specialty tenants; a full tenancy review should occur each year as part of the property business plan.  Split your tenancy mix up into desirable tenants and those that should be removed at the next leasing opportunity.  Also look for the missing tenants within the tenancy mix that you can target and find when vacancies arise.  Visit other local shopping centres on different days of the week and at different times of the day to see how they are performing from a tenant mix perspective.

So there are plenty of good things that you can do here when it comes to retail property performance and shopping centre tenancy review.  Maintain the appearance and the function of your shopping centre so that it can attract the best tenants and for customers.

The activities of customers and tenants are always linked when it comes to shopping centre performance.  As the leasing manager and or the property manager, you are the best person to develop effective and direct strategies across those issues.  Over time that means you will be help in the property performance and landlord results.

You can get more tips about Shopping Center Management and Leasing in our eCourse ‘Snapshot’ right here.