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Agent Success in Commercial Property Management Today

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Top properties need top commercial property managers

Commercial property management is a challenging part of the property business if you are going to do it properly.  Complex properties require good managers that understand the property type and just how to keep things under control

It is hard to take up a position in looking after some properties without a qualified and experienced person to help you.  Whilst the theory of property management can be studied, the practical experience will always help you greatly and fast track your learning curve.  There are significant differences in the management style between industrial, office, and retail property.

Here are some of the things that are central to your job:

  • Watching the trends of the market with focus on market rentals, vacancies, competing properties, supply and demand for premises, and new developments.
  • Income and expenditure performance for properties in your area.  Knowing the industry averages will help you a lot in keeping things under control.  It should also be said that some properties will perform differently based on their property type and location.  That is why specialisation is relevant in property management.
  • When it comes to properties of medium to larger size, the establishment of a budget relating to income and expenditure is quite normal.  The budget can only be set with due regard to property history, location, and other properties of similar type.  Getting to know the competing properties and other property managers will help you in establishment of the budget for your managed assets.
  • The current tenancy mix and the vacancy profile for the property will have direct impact on the income stream.  That is why the market rentals, current lease profiles, and expected vacancies need to be carefully managed.  Many managers will do their own leasing as part of the property management services.  That should normally be the case however there should also be a separate fee for completed and successful negotiated leases.  There will also be differences in leasing fees as it applies to leases of different types and different terms.
  • Many property owners will have specific needs when it comes to cash flow.  They will need to service financial obligations to the mortgagee, as well as payment of expected outgoings to run the property.  That is why your experience and control become part of the property management service.  The manager should understand exactly what’s happening in the property today and how the expenses are going to change cash flow over the forthcoming period.

A good manager will bring stability to an Investment Property.  Stability then allows the property to be improved over time to the plans and the priorities of the landlord.  It should also be said that a reasonable fee should be charged for commercial or retail property management services.  There are no short cuts when it comes to quality in this industry, hence a suitable fee should be paid for professional commercial and retail property management services.

You can get more tips for Commercial Property Managers in our Newsletter right here.

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Staff Frustrations in Commercial Property Management Today

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Choose the right commercial property managers

There is no doubt that commercial property management is very different to residential property management, yet so many real estate agents put their ordinary property managers (with only residential experience) on to the management of commercial or retail property.  The process sets the scene for incompetency; the problem is magnified when the property in question is retail given the uniqueness of retail property performance and tenant mix.

The two people that suffer through all this are firstly the property manager because they just do not know what to do and secondly the landlord because the property is poorly managed.   If the situation is not closely monitored the agency will lose a client and expose itself to the potential of litigation.

Agency principals beware; if you are going to manage any commercial or retail property, only do so with the right people and give them the knowledge to support you.

Without knowledge and experience in commercial property, residential managers find the change of property type really hard.  They just do not have the experience in the things that happen every day such as:

  • Vacancy management
  • Lease optimisation
  • Tenant mix strategies
  • Maintenance controls in larger properties
  • Budgeting property performances
  • Lease documentation and enforcement
  • Expenditure controls
  • Risk management
  • Landlord reporting
  • Supply and demand management of available space
  • Forms of lease documentation and negotiation
  • Critical date management from the leases
  • Rent review and renewal negotiations
  • Environmental and heritage issues
  • Lease assignments and sublets
  • Lease negotiations and variations with new tenants to the property
  • Essential services management and compliance to codes
  • Occupational health and safety

The list can go on into many different things and special challenges.  The larger the property that you manage, the more complex the issues that will have to be handled.

At the very centre of the commercial and retail property management processes and the basic keys to what you are attempting to do.  Here is a summary:

  1. Manage the tenants in the property to the rules of the leases and the occupancy codes applicable to the property and the location
  2. Maximise the income for the property given the local property market, the leases, and the focus of the landlord
  3. Control the expenditure of the property given the requirements of each lease and the authorities of the landlord
  4. Maintain the property to the targets of the client, the budget and the pressures of occupancy
  5. Integrate the property into the community and the business segments that it serves.
  6. Optimise the income through vacancy minimisation.

If none of this makes sense, then knowledge is required to build up the skills and processes in commercial and retail property management.  I did say earlier that retail property is very special; it requires a unique awareness of rents, tenant mix principles, and retail leasing property legislation.  When in doubt see a good property solicitor.

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