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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 Chart

commercial property management chart
Know the relevant skills in commercial property management services.

In commercial property management today, there are many things to think about as you work with tenants, leases, rent, and maintenance.  Some properties are more challenging than others.  Some clients are more demanding or specific in property needs.

So how  do you get to a positive result?  You need a plan or approach to do that.  I have broken down the Property Management process into 4 categories in this chart.  It may give you some valuable ideas in focusing your business skills in property management.

(N.B. these charts 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 Online Podcast 229 by John Highman

Commercial real estate podcast
Commercial Real Estate Podcast

Its a good time of year to consider strategies and plans relating to brokerage business.  There is a solid amount of time ahead for attracting some new clients and positioning their property needs into 2016.  I have incorporated some of those ideas in this weeks podcast for our broker and agent friends in ‘Snapshot’.  You can join our ‘Snapshot’ online community here.

The Podcast 229 Program Details

And now for the program …….. In podcast 229 for commercial real estate brokers there are 5 parts to the audio program.

  1. How to make a commercial property management difference,
  2. A new perspective on Agent opportunity,
  3. Accuracy in Inspecting Office premises,
  4. How to list Industrial property,
  5. How to research the opportunities in the local property market.

These are commercial broker programs on podcast by John Highman.  Here is the audio for this week:

 

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How to Rehabilitate a Commercial Office Tower Property Performance

city office buildings
Older office buildings present property performance challenges.

Some office investment properties struggle from time to time both financially and physically.  If you can predict and adjust to that change, then you can build a good average property performance over time.

So why does this change happen?

Many local property issues can be driving change and placing pressures on the property performance thereby impacting the investment.

You can adjust to the changes.

So to improve a commercial property, you should assess where things are now.

Here are some of the bigger things to help you get started:

  1. Before you get too far into things, define ‘Property Performance’ and what it means to you and or your client – You can’t improve something unless you define it and assess it. Then you can compare the property to others locally and regionally.  It should be said that some properties are so special that you could be making comparisons and assessments with other buildings far afield.
  2. Look at the property from different aspects – In understanding a property there are a few key indicators or categories of activity to review. Here are some of the bigger ones to help you get started – Financial, Physical, Lease Documentation, Tenant Mix, Vacancy factors, Occupancy costs, Net Income, and Maintenance.  There will be strengths and weaknesses in each category.  When you drill down into the separate categories you can see what you have to work with and any problems that may need resolving.  Some adjustments take months if not years to resolve.  The larger the property, the greater the variations of things to look into.
  3. Do a SWOT assessment – There will be unique issues in any property that could be impacting property performance. It is valuable to do a SWOT test for the property.
  4. Implementing a tenant plan – Some tenants will be better than others when you consider property performance over time. Understand how you can keep your good tenants and what you should do in preparation of any pending lease termination. Rents and incentives should be set as a target point for any priority tenants.
  5. Implementing a budget – A budget of income and expenditure will help you stay on task during the financial year for the asset. A budget also makes you look at the variables of property performance that you can see coming up.
  6. Review lease documentation – Some leases will be better than others from a landlord perspective. A standard lease for the asset can be set for targeted rent strategies, lease occupancy, incentive offerings, and fit out standards.
  7. Capital works programs – There will be big issues in property maintenance that fall outside of normal repairs and maintenance. For example you may have to purchase a large piece of plant and machinery.  That high cost component could be structured into the timed expenditure budget for the property.
  8. Regular property maintenance – Stagger the preventative maintenance routines into the property performance budget. The contractors will have plenty to say about what they believe should be done and when those works should occur.
  9. Rates and taxes – One of the biggest drains on property expenditure will be rates and taxes. At certain times of the year these big accounts will need to be paid.  A budget will help you plan how you can the payment of those larger accounts.
  10. Better quality leases – Generic leases are a big waste of time for a landlord when it comes to any high quality property. Remember that the leases in a property reflect the cash flow and the investment strength of the asset.  Get special leases prepared that reflect the investment targets of the client (Landlord).  Every tenant will want to lease premises on their terms and conditions, but the landlord owns the property and deserves a reasonable lease document to support the investment.
  11. Renovation plans – Understand how factors of ‘wear and tear’ impact the property. As the property ages, you will need to establish renovation plans of the common areas including car parks, entrances, foyers, and building surrounds.  It is hard to drive a reasonable level of rent in the property if the presentation issues are not kept up to scratch.
  12. Better tenants – There will always be some good tenants locally that you can influence in entering your property on a long term lease. Create a lease of targeted tenants that you will call on when vacancies are seen to be occurring.  Track lease expiry dates with those special tenants that could move into your property.  Offer the right deals at the right time.
  13. Improved market rent – Are the local rents going up or are they stable? Rents can be escalated if the lease document supports the defined landlord investment targets.  Be careful with market rents that are too aggressive; you want your tenants to run viable businesses for the long term.
  14. Outgoings costs review – Compare your outgoings costs to similar buildings in the same location. Rates and taxes will always be a variable given that they are structured on property values, however you can look at the averages and determine where your property sits by comparison.
  15. Third income streams – Look for extra income from extra occupancy strategies such as storage, signage, and change of premises, licenced areas, antennas, and increasing of lettable space.

So there are some good things that you can do here when you want to boost property performance and income potential.  Are you ready to make some positive changes?

You can get more tips on commercial property management from our eCourse Snapshot right here.