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Career Tips and Advice for Commercial Property Managers

City buildings on the edge of a river. Commercial high-rise buildings and bridge.

The levels of knowledge and the professional skills required in commercial and retail property management are unique and deep.  They are quite different to the skills required in a leasing or sales situation.  A property manager is a differently skilled person, and they need to look at the big picture and remain focused on their properties and clients for months if not years.

 

That long-term focus allows the managed investment to improve over time through changes to the tenancy mix, the cash flow, and the property function.  The investment process is lengthy; the investment requirements of clients will be individually unique.  That is why and where professional service and property manager performance will underpin client attraction, retention, and engagement.

 

If commercial property management is a career for you, then there are some things to learn and disciplines to implement for the long term.  Expect to be very busy as you embark on your career and remain in it as a professional.

 

What do you need to know?

 

You will need to learn about the legalities of occupancy, investment performance, leasing, cash flow strategy, and property documentation.  Control systems will be at the centre of your property management career and portfolio control.

 

Every day there will be pressures on your portfolio and your properties with tenants, maintenance, landlord focus, reporting, and risk management.  As part of your career, you will be at the centre of many events, requests, and communications.

 

If your properties and workload pressures are excessive, you will lose control of the ‘property management process’; that then leads to unhappy clients and out of control tenants.  There is a balance between quality property management services and a sensible workload of tenants and landlords.

 

Typically, the landlord will be your client, and you will be the main controlling factor to property performance and investment outcomes.  That is why the skills of the property manager are so important.  The days of collecting rent and maintaining the property are well gone.  The strategic approach to property management is now well established and evolving in new and different ways with efficiencies in building technology and the requirements of local business.

 

What do you need to do?

 

Are you ready for the property management challenge?  If you have a large portfolio or a long list of tenants, the complexity of the daily workload just gets deeper and more challenging.  There will be plenty of work to control and direct.  Here are some rules to help you with that approach:

 

  1. Knowledge – get to know everything possible about your location, the leases, competing properties, business activity, rents, and investment priorities. Through a substantial level of knowledge, you will see how you can improve an investment situation for your clients.  That is where tenant mix changes and leasing strategies will help with property performance.  That then becomes an important part of your professional services.
  2. Complexity – there are many variations to tenancy mix control, lease negotiations, rental cash flow, and property performance. The decisions of today with a tenant or lease matter will impact the investment for the long term.  Understand your decisions and how you can improve the investment outcomes for your client.
  3. Clients – every client will have different pressures and priorities when it comes to property performance. Get to know those factors with your clients, understand their portfolio activity, and look at the life cycle of their investments.  Don’t just manage a property but understand the asset and the focus of the client.
  4. Controls – there will be different systems that you can use to help you in providing services to your clients. Software programs will cover the facts and variables of lease management, rent collections, maintenance, and facility management.
  5. Reporting – report about your managed properties in the ways that the landlords require. Information will help them make choices with rents, occupancy, and expenditure spending.
  6. Tenants – expect the tenants to be pressuring you on their issues and their occupancy. A retail property is a prime example of that pressure with many tenants positioning for better sales, lower rents, and a successful business.
  7. Property performance – every property should have a business plan and a budget to work to over time. The client or landlord will be setting investment priorities and cash flow controls.   If you manage properties for many clients, the issue gets deeper and more challenging.

 

Through all these pressures and strategies there will be opportunities for a professional property manager to excel in skills and career development.  Are you ready for the challenge?

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Commercial Property Management Questions to Use in a Handover

City buildings on Sydney Harbour

When you take over a new commercial property as part of a management strategy for a new client, you should ask specific questions relating to the asset, its history, and the tenancy mix.

You can get plenty of commercial property management tips and ideas as part of our regular online coaching right here.

There are many things to explore as part of a new property management listing on your brokerage books. In this audio program, John Highman talks about the factors to question and review. Most particularly key matters to look into will include:

– lease documentation
– tenancy mix
– property maintenance routines
– risk matters
– rentals and rent recoveries
– critical dates
– vacancy factors and pressures

You can listen to the audio program here to understand exactly how you can approach the handover process in commercial property management today. It doesn’t matter whether you are managing a retail shopping centre, or a commercial office tower. The same strategies and processes apply. Attention to detail will help you with the fact review and gathering process.

You can get the audio below:

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Commercial Property Management Skills Start Here

City buildings on rivers edge

In commercial property management today there are plenty of things that you can do to differentiate yourself from your competitors. Make no mistake, managing a commercial or retail property can be quite a challenging process. (NB – you can get plenty of commercial property management skills and ideas in our Snapshot program right here – its free)

Real skills are required and special people should be dedicated to the process of providing specialised services to investors and company owners.

In this audio program, John Highman talks about the special and unique skills required to manage a commercial or retail property today. Learn how to grow your brokerage business from a base of management activity and property management clients.

 

Property Facts and Controls

 

When you completely understand the strategies behind property management, you can develop special services across asset performance including the following:

– tenant retention
– income enhancement
– lease negotiation
– expenditure management
– net income generation and cash flow control
– lease administration
– maintenance management
– risk minimization
– renovation and refurbishment activities
– vacancy minimization

So there are many concepts and strategies within this list. If you take each individual concept, there are many specialised services that can be provided to your clients and customers.

In this audio program, John Highman talks about the importance of commercial and retail property management in brokerage performance today. Learn how to improve your brokerage business and the future commission opportunities available in your town or city.

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Commercial Property Management – Presentation and Pitch Ideas for a New Engagement

City buildings on the edge of a river. Commercial high-rise buildings and bridge.

The process of commercial property management is quite special and unique when compared to sales and leasing activity. For that reason the people appointed to the task or property management should be carefully selected as to property knowledge and investment awareness. (Note – you can get plenty of property management tips and ideas in our Snapshot program right here)

There are many different strategies to consider when it comes to pitching for a new commercial property management. In this audio program, John Highman talks about the particular elements of a property management presentation that will be of relevance to most clients today.

Listen to the audio program and develop some specific ideas to modify your property presentation and management ideas. Don’t forget to talk about income enhancement, tenant mix changes, property controls, and risk reduction.

You can get the audio program right here:

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Things to do in a Commercial Property Management Handover

high rise buildings

If you are about to take on a new commercial or retail property from a management perspective, there are things to think about.  There are things to think about and the property management handover is critical to gathering the right information.  Every client and every property will have unique issues to prepare for and ask questions about. (NB – you can get plenty of property management tips in our Snapshot program right here – its free)

 

Handover Importance

There is something to remember here about a property handover and why it is so important; you only have a short period to get the full information about the property and its performance over time.  Questions must be asked of the previous property manager, owner, or tenants.

 

Stay Organised

An organised approach with a checklist as part of a handover process is a good thing to work with.  A checklist will keep you on focus and task for the property type.  Different questions are asked when it comes to the different properties.

So here are my experiences and ideas relating to taking over a complex commercial or retail property.  Preparation is the key to success in capturing all the recent and relevant property detail.  You may be able to add to the list based on the location and the landlord:

  1. Check out the physical aspects of the property – it always helps if you visit the property first before you do other things. The visual aspects of the property will help you significantly with investigations and questions.
  2. Review the tenancy mix – in a property with several tenants, look at the types of businesses, location of each tenant, and the performance of the property for the tenants in situ. Some tenant types put pressures on the property such as security or staff issues.
  3. Review all the leases relating to occupancy – the leases will have unique elements of occupancy to review. All leases should be read; extracts and critical dates should be taken from each lease where you can see important facts impacting occupancy.
  4. Understand the vacancy factors – any vacancy now or in the future is an issue. Resolve vacancies through a tenant retention plan, a marketing plan, or a targeted leasing program.  You can also move existing tenants around the property.  Think outside the square when it comes to tenant movement and placement.
  5. Look at maintenance and risk factors – any person owning a property assumes risk and must plan for the challenges of property ownership. The building, the improvements, the location, or the tenant mix, can create risk matters and pressures.  See things for what they are and how they could challenge the investment performance.
  6. Review income and expenditure results – there will be a pattern of income and expenditure to review and consider. The last few years will have value to you when assessing passing income and net income.  The results of the last few years will help you set new budgets for the property given the existing tenants, leases, vacancies, and landlord targets.
  7. Talk to the landlord about expectations and reporting – every landlord will have certain requirements of reporting and control. The property will have income and capital value targets over time.  How can you report to that criteria for the current property owner?  Have you got a software property management program that allows you to report conveniently about the asset and the current results of income, leasing, and tenant activity?  The information that you gather from a property management handover will be captured into the software that you are using to manage the property.

So, there are many things on this list to investigate.  One thing or one question will lead to many others.   As you take on a new property to manage, be prepared for the information and the facts that come your way; take plenty of notes.

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How to Undertake Routine Inspections in Commercial Property Management

high rise buildings

The idea of inspecting every property in your commercial real estate portfolio can be a bid daunting given that there are plenty of things to look at and investigate as part of the inspection.  The greater the number of properties that you have to manage, the bigger the process of review and documentation.  (NB – you can get our free commercial real estate course for brokers right here)

When you have lots of tenants in occupancy, the whole equation of inspection becomes more complex given that many tenants are in occupation and they all run different businesses.  So the inspection process has to be comprehensive and records need to be kept.  The property manager or the center manager has to implement the property inspection process regularly and in a detailed way.

In this audio program, John Highman talks about the routine inspection process that is all important in the commercial and retail properties under management.

 

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How to Find Commercial Property Management Clients and Why Do It

city building scene

The commercial property management segment of the market can be quite lucrative from a brokerage perspective. The clients that you serve in that way require specialized skills and services over an extended period of time. The complexity of the property can involve strategies and activities across the tenancy mix, leasing, vacancy resolve, maintenance management, asset planning, and income performance. There are many things to do and many ways to approach the challenges that the client may face.

Note, you can get our free commercial property management course right here.

So the message here is that you can and should develop a significant property management portfolio in your real estate brokerage. Take the time to develop a list of clients and prospects who will need your services in management at some stage in the future. Develop a prospecting process to open the doors to management opportunity.

The best way to attract commercial real estate clients and those needing management services is to directly prospect the owners of the best buildings in the best locations. It is always preferable to manage a building with multiple tenants in occupancy and multiple levels of income generation.

The bigger buildings and those with a complex tenant mix require expert management help. They also require complex software management programs to administer the required controls on leasing, maintenance, tenant mix, and income optimisation.

So there are some distinct advantages here to be optimised. In this audio recording, John Highman talks about the opportunities of commercial real estate property management in brokerage today. See if you can use some of the tips that John talks about to open up your brokerage opportunities in this way.

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How to Prepare Budgets in Commercial Property Management

commercial property financial facts

Budget time in commercial property management is something that requires accuracy and planning. Mistakes can be made when it comes to setting the budgets that apply to income and expenditure in an investment property. Many property managers understand the key issues to focus on when it comes to budget establishment.

Essentially a budget of this type involves complete review of the income possibilities for the building given the existing tenancy mix and the prevailing property market. Assumptions have to be made given the known facts and the targets of the landlord.

Note: You can get more property management tips in our email course for brokers and agents.

The history of the property will have some important indicators to merge into the ongoing property budget. You can learn a lot through reviewing the timed income and expenditure over the period of the last few years.

In this audio recording John Highman talks about the strategies behind the commercial and retail property management budgeting process. Understand the key factors that apply, and then merge them into your business plan for the asset.

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How to Avoid Procrastination in Commercial Property Management

Woman reaching for alarm clock uid 1281547
Get things started early in Commercial Property Management

In commercial real estate property management, procrastination can be a big issue or hurdle in getting the harder jobs done. Let’s face it, there are difficult things to do every day of the week in our industry. Have your people in the management team got the right knowledge, experience, and commitment?

(N.B. these ideas are also sent out to regularly to our friends in Commercial Real Estate Online Snapshot to help amplify brokerage results…. Get your access here)

Workload pressures in commercial property management are usually consistently high. Free time and spare time is a luxury if and when it occurs. Most days of the week are quite busy. Stress can also be a problem for some people.

What is the Focus?

The best commercial managers are the ones that get the work done first and foremost every day. They prioritize their time so that they are effective in the best possible ways. So what are the issues that put the pressure on? There are many pressures arising from separate categories such as:

  • Tenancy management and communication
  • Landlord reporting and approvals
  • Maintenance contractor controls
  • Property performance to targets and to the budget

So the best property managers know how to optimize their time and will usually do so efficiently and directly. Any inefficiencies in the job role will usually create problems with clients and property performance.

Any team leader in commercial property management should be careful to select the right people for the tasks and the portfolio under management. The team of people within the division should work to a system or plan to help them get the work done and to control the assets in the best possible way.

Commercial Management Systems?

Here are some ideas to help you develop the best property management system and control process:

  1. SOFTWARE: At the top of the list would have to be the selection and use of a specialized software program controlling property performance. There are many different programs available for the task, and some are better than others. Typically, a program will need to control rental monies in all categories, arrears management, tenant communication, lease administration, critical dates, and property maintenance. The best programs tend to be somewhat expensive, however they provide high levels of property control and reporting. If you are going to manage high quality assets for quality clients, then you will need such a program.
  2. FILE ACCESS: Cloud based storage is always very useful. When the managers are out in the field meeting with tenants and landlords, cloud based storage can help when it comes to file access, reporting requirements, and all communications.
  3. CLIENT ACCESS SERVICES: Develop a dedicated client portal for all client communications. All of the client reports can be stored online within a dedicated portal for VIP client access and communication.
  4. TENANT COMMUNICATIONS: You can enhance tenant management through a special web site where any maintenance issues and communications are directed or first initiated. The website can retain all communications and redirect as required to the right people in a timely and efficient way. Like it or not, some of maintenance issues occur at the strangest of times, and you will need an effective communication process to handle those things.
  5. MAINTENANCE PERSON: As the property management portfolio grows, there are benefits to be achieved by employing a specialist maintenance manager. The manager can oversee the day to day maintenance requirements and unexpected portfolio issues for all of the managers.
  6. LEASE ADMINISTRATION: Appoint a year lease administration person to monitor the lease critical dates and upcoming lease changes and issues. The larger the portfolio, the more desirable, essential, and efficient you will find this position. A lease administrator will be a good addition to most property management portfolios.
  7. TRUST ACCOUNTS AND FUNDS CONTROL: The handling of monies, rentals, arrears, and property performance will require an experienced accounting person understanding the issues of lease documentation, tenant management, and property law. There is high value here in choosing the right person for the role.

From this list, you can see the specialties required in commercial property management. The same can be said for retail property management. Choose the best people and position them accordingly.

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How to do an Income and Rental Assessment in Commercial Real Estate Brokerage

Antique cash register uid 1342887
Not all commercial property rents are the same.

The income for a commercial Investment property will have a direct impact on the potential price that sale. On that basis the income needs to be fully understood and investigated as part of the preparation for listing.

(N.B. these ideas are also sent out to regularly to our friends in Commercial Real Estate Online Snapshot to help amplify brokerage results…. Get your access here)

Any agent or broker listing an Investment property should take the time to review everything that could have an impact on current and future property income. Look for the strengths and weaknesses that apply to the property income stream and the cash flow for the asset.

Strengths and Weaknesses

The buyers for any Investment property will always undertake a due diligence on the listing and the location; weaknesses will be found so make sure you understand where those weaknesses are and how to address them. They will be looking for things that will have an impact on property performance over time. Some problems in cash flow will have a direct influence on a negotiation for property purchase.

Rental Assessments

Here are some ideas to help you review income performance for the assets that you might take to the market for sale as an investment:

  1. The gross income for the asset in today’s terms will always be the starting point of an income assessment. Look at the actual volume of rental created from the existing leases and the tenants in occupancy. Understand the elements of cash flow that make up the income stream. Those elements will usually include rental, rental by type, outgoings, special licensed areas in the property, casual rentals, and permanent tenants.
  2. Look at the cash flow per month over a period of time. Understand the gross rental achieved each month over the last 12 months. There will be patterns to the income stream driven by the tenants in occupancy. If there are vacancy factors in the property to deal with, then that will have a reflection in the collective rental. Review the number of vacancies and the negative impact that those vacancies have on the cash flow for the asset.
  3. Understand the vacancy threat that maybe upcoming in the property tenancy mix. Some tenants will be leaving or relocating within the property, and on that basis you should develop a full understanding of how those vacancies will be handled. Some vacancies will be harder to lease than others.
  4. Property expenditure on a monthly basis will reduce the gross income to a net income. The age of the asset will have an impact on property expenditure and maintenance. Compare the expenditure in the property to other similar properties in the same location. Look at the averages, and in that way understand how your asset compares.
  5. Some of the rentals in the property would have been determined on a market rental basis. Compare that market rental to other properties of similar type in the same location. Is your property correctly rented, or under rented?

Simple strategies of investigation including these issues mentioned will help you fully understand the income stream for the investments that you sell, lease, or manage.

Different Income Streams

From the examples provided you can see that there are many different elements of income to look into and review. Some of those income factors can be improved over time, and that’s where the skills of a leasing and or property management specialist are quite valuable.

As an agent or broker, develop a comprehensive investigation process applying to the analysis of the income stream in any investment performance. An income checklist will be very useful as part of that process.

(N.B. these ideas are also sent out to regularly to our friends in Commercial Real Estate Online Snapshot to help amplify brokerage results…. Get your access here)

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Commercial Real Estate Brokerage – How to Help Your Clients with Leases and Tenants

man standing by arrow
Help your clients with their leased investments and tenants.

It is one thing for your client to purchase a property with the tenant in occupation. It is another for them to purchase a high quality investment with an excellent lease covenant and a high quality tenant.

The fact of the matter is that lease documentation will support the investment and on that basis the lease documentation should be analyzed for opportunity together with the tenant(s) before your client purchases the property.

What do they want?

Most clients looking to purchase a property will focus on a property and its location first and foremost. They may look into the basic facts of the lease structure and strategy across the tenancy mix, but rarely will they read the lease document itself as it applies to each and every tenant. That is where you can add value and provide commentary relating to the investment over time as that investment may be supported from and through the lease documentation. In a complex property with plenty of tenants in occupancy, that is then a real service and something that should be provided to your best clients.

So the message here is that you can find the right property for your clients in your local area taking into account the complexity of the tenancy mix and the lease documentation. You can determine and understand the investment benefits that the lease documentation in any property will provide to your clients over time.

Lease Facts to Know

Here are some ideas to help you do exactly that:

  1. RENTS: Understand the rental structures and strategies that apply to the lease document. Compare those rental structures to the prevailing market conditions. The type of rental will also have an impact on the outgoings recovery be that as a net rent or as a gross rent. Exactly how can the landlord recover the outgoings from the property given the prevailing market conditions and the existing lease documents? Should any of the existing leases be replaced with better documents when the next lease negotiations arise?
  2. RISKS: Are there any risk exposures within the tenancy mix? Risk will usually be created through a future threat of vacancy, or an existing vacancy exposure. You can deal with these problems through planning tenancy placement and negotiating leases well in advance prior to expiry.
  3. COSTS: Assess the levels of outgoings as they apply to the particular property under consideration by your client. How do those outgoings compare to the industry averages for the property type in the location? Look at the history of outgoings expenditure within the property over the last few years. Look for patterns of expenditure and make sure that the costs to run the building are genuine and real.
  4. MAJOR CAPITAL COSTS: Whilst ordinary running costs will likely be recoverable through the various types of lease rental and documentation, major capital expenditure items will not be recoverable in that way; they are a property owner cost. On that basis you can review the property for upcoming items of major capital cost outlay. Will your client have sufficient funds to cover such a capital expenditure in the timeframe required for renovation or rectification?

So there are some good things that you can do here when it comes to helping your clients with lease documentation and property selection. You could help them understand the way each and every lease document will work as part of their overall investment performance and result.

Look for the strengths and weaknesses in lease documentation as it applies to investment property today. Show your client exactly how they can benefit from a well negotiated lease and a high quality tenant.

(N.B. these ideas are also sent out to regularly to our friends in Commercial Real Estate Online Snapshot to help amplify brokerage results…. Get your access here)

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The Important Features of a High Quality Tenant in Commercial Real Estate Brokerage

office property foyer
Focus your leasing efforts on quality buildings and quality tenants.

In commercial real estate leasing today, the first tenant that you find to fill a vacancy in a property may not be the best tenant for the investment over the long term.

Ultimately you need to consider first and foremost the future of the property, the improvements within the asset, and the investment targets of the client.  You can then choose the best tenant by type and market the property accordingly.

The marketing strategy behind the leasing requirement will allow you to drill down into the factors of attraction that apply to the vacancy.  You want to attract the best tenants for the location.

Information

So you will need some information to assess about the property, the client, and the local area.  The depth and the strength of your research will help you match your services to the requirements of the client and the property

Before you lease the property and the vacancy understand the client first and foremost.  The client as the landlord owning the property will have certain targets to recognize including the following:

  • How long do they wish to hold the asset?
  • What are the requirements of cash flow from the lease?
  • Are there other tenants within the property to support the rental return?
  • In any medium to large property, you will need to review the lease expiry dates, rental structures, and occupancy pressures before you lease any vacancy to a new tenant.
  • Are there factors of renovation that need to be incorporated into the tenant mix and the lease structure?
  • Are there factors of risk that need to be incorporated into the property performance plan and the overall leasing strategy?
  • Has the client diversified their property portfolio across a number of different locations? Diversity brings with it other strategic factors to consider.

In answering all of these questions, you will have a reasonable idea of the best tenant by type and by location.  Understand how the tenant will fit into the tenancy mix to strengthen the overall property profile and income return.

Lease Priorities

Subject to all of the previous questions raised, you can drill down into the best types of tenants that suit the asset and the investment targets of the client.  A good tenant for an investment property will usually bring the following factors to the asset:

  1. Stability – Every tenant should be assessed for stability before you commit to lease negotiations. You will need to review their business history, other locations of occupancy, and talk to the key people.
  2. Income – Look at the levels of rental that apply in the local area. Will you be leasing the property on a gross or a net rental basis?  What are the market rentals that apply respectively?  How can you improve the income over time through rent review structures and strategies?  How long should the lease be?  All of these questions will impact the income for the asset.  Answer the questions before you negotiate with the tenant.
  3. Profile – Some tenants will bring with them a business profile that is attractive to the property. A business brand or a business profile can bring a marketing advantage to the property.  Some franchise brands also achieve the same enhancement.

Taking these three elements into account you can do something with your lease negotiation.  You can give the landlord some solid reasons to negotiate effectively and directly with the chosen tenant.  Most landlords will cooperate when it comes to attracting a new tenant in a stable and strong lease arrangement.

You can get more tips about commercial real estate brokerage in our eCourse ‘Snapshot’ right here.