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.
Property Management Pressure Points
So, why is a commercial or retail property manager so busy? Here are some of the most common reasons:
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.
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.
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.
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.
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.
When you work with investment property clients from a leasing or property management perspective, it pays for you to set defined goals that match the client’s targets. Unfortunately some agents have little or no idea what the client is targeting for their investment over time; that then leads to slower negotiations and leasing problems.
When an agent is aligned to the landlords focus and investment targets, the whole leasing and property management issue gets a lot easier. That then leads to a happy client and potentially increasing fees for brokerage service. A good outcome don’t you think?
Landlords are Very Special Clients
So what can you do in working with these special clients? Here are some ways to get closer to a landlord and their focus issues for property performance:
Set investment targets at the start of the year – The investment targets for a property will normally take into account market rents, rent reviews, options, and the supply and demand for lettable space, vacancy factors, and the existing tenant mix. Investment goals are then built around the realities of the property and the location.
Review asset performance – The performance of the property from a base of income, expenditure, occupancy, and risk will always be valuable in the planning process. Set your budgets based on the reality of the property.
Track tenant changes and the tenant mix – Critical dates will exist in a property with regards to tenant leases, and occupancy decisions. Understand those leases and all the issues that evolve from them.
Look at income opportunities – The rental income for a property can be improved by adding extra lettable space, or improving the quality of the property. Short term rentals can also be established as third income streams (the concept is very common in shopping center leasing).
Review capital works and expenditure – Each year the expenditure of the property can be checked and reviewed for the upcoming year; that’s where the budgeting process is valuable. That full assessment will involve works estimates, tendering of contract services, and property valuations.
Updates on incentives – Like it or not, lease incentives are part of attracting new tenants to a property or perhaps retaining current tenants. The landlord should consider the impact of incentives on upcoming lease negotiations. Decisions can then be made early.
Lease rent review and options – Protect your leases, the tenants in the tenant mix, and your levels of market rent. The critical dates evolving from rent reviews and options are all part of the process. Understand all your leases in a comprehensive way and explain to the landlord the upcoming changes and decisions that should be made.
All of these facts allow you to make specific recommendations to your landlord clients as part of a leasing and or property management service. Information supported by market evidence and documentary facts will help make your services and relationships with your clients much more positive.