Why Attention to Detail is So Important in Commercial Property Management Today

high rise buildings

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:

 

  1. 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.
  2. 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.
  3. 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.
  4. 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.
  5. 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.
  6. 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.
  7. Budget performance – this involves both income and expenditure. Set the budget with due regard to incomes, leases, tenants, and local area supply and demand.
  8. 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.
  9. 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.
  10. 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.

6 Tips for Qualifying a Tenant in Commercial Real Estate Agency

commercial real estate boardroom presentation
Qualify your tenants thoroughly first in commercial real estate.

In commercial real estate agency the tenants that you talk to must be qualified before you spend a lot of time with them.  Most tenants looking for new or alternative premises to occupy will have spoken to quite a number of local property agents; on that basis you are just another person to get information from.  Asking the right questions will help you work with the right tenants in the right way.

Most towns and cities will have a good supply of vacant premises available.  We have some good listing stock to work with.  If you want to dominate the local leasing market for your property type, it is wise to focus on the best property locations and the quality properties.  In that way you will move more listings and do so faster.

 

Here are ten questions to ask prospective tenants before you get deeply involved in matching listings and undertaking property inspections:

  1. Find out just who you are talking with and determine that they are the principal decision maker that is looking for property to lease.  This issue gets more complex when you are dealing with a company or corporation.  You may be talking with the local business manager but they may have little decision facility.
  2. Understand their property requirements in location, improvements, car parking, area of premises, permitted use, and rental budget.  These simple facts will help you with creating a short list of premises to look at.
  3. The services and amenities in a property may be of relevance given the way the business or tenant operates.  Staff and customer numbers will place some pressures on property choice.
  4. A lease can be negotiated on the basis of gross or net rent.  Through direct questioning you can see what rent types could suit the tenant.  That will then influence the choice of property, the lease negotiation and the initial term of the lease in years and or months.
  5. Ask them about any contacts they may have made with other agents.  If your market is dominated by open listings it is likely that the tenant has looked at a lot of your listing stock already; on that basis you can see your commission from a lease agreement ‘disappear’ due to another agents introduction to the same property earlier.
  6. The ideal timing of property changeover will give you an idea of just how important the move of premises is to them.

When you have got these facts sorted and identified you can move to the next stage of property selection and inspection.  A wise leasing agent will get all the leasing the facts on the table and clearly identified before the hard work starts in property identification.