In commercial property management today, there are many pressures and activities to consider on a daily basis across the tenancy mix, existing landlord requirements and targets, the property, and the investment requirements of the various stakeholders. (NB – you can get our commercial property management tips right here)
Given those critical facts, property managers are typically very busy on a daily basis, and as a consequence they can easily be distracted into the events of the moment. An ‘out of control’ property manager is a ‘disaster waiting to happen’ both for the client and the brokerage. That is why attention to detail is so important in the role and for each individual property manager.
Control all the Facts
Attention to detail in all of the property management disciplines is hard to maintain but will help control the issues and the events.
So what can you do here? When it comes to ‘attention to detail’, some things are more important than others for property managers and landlords.
What Should You Monitor?
So what are the property performance issues that should be optimized and controlled in this detailed way? Try some of these for starters:
- Lease documentation – the leases that you have now in the property will support and direct the rental cash flow in different ways. Those leases have to be tracked so that all the elements of occupancy are correct and actioned. Most of those leases will be different in some respects, so do a full and comprehensive lease review by reading the documents ‘end to end’. Take notes of critical issues as you do that.
- Tenant negotiations – understand the existing and upcoming tenant lease negotiations. Gather your required information well in advance so that you can start the negotiations in a timely and relevant way.
- Tenant placement – don’t just put a tenant into a vacant shop. Make sure that it is the right retail tenant that offers the right merchandise for the location. Match the tenant into the tenant mix.
- Rental cash flow – understand the rental types that match the landlords lease strategies and the current market conditions. Be ready to negotiate those rents as market conditions allow.
- Arrears management – watch your arrears in a regular way. Don’t let them get out of control. Develop arrears strategies for any tenants that are worth keeping in the property for the longer term.
- Maintenance management – establish a property maintenance plan and budget for the property so that most of the associated costs are kept within the cash flow capabilities of the property.
- Budget performance – this involves both income and expenditure. Set the budget with due regard to incomes, leases, tenants, and local area supply and demand.
- Vacancy factors – you will have vacancies to contend with, so allow for that fact in your property budget. Local area supply and demand will impact your leasing and vacancy alternatives. Watch the trends in the local area.
- Property investment targets – the client will have targets and those targets should be at the center of your lease negotiations, tenant choices, market rental considerations, and expenditure planning.
- Critical dates – watch the dates in your leases, and the relationships that those leases have to each other in a ‘timing perspective’. You don’t want too much volatility in lease dates and expiry dates in the one property.