In retail property today, the typical retail shopping center is something special. There are factors to understand with tenants, landlords, marketing, income generation, sales, and tenant mix. You could say that a large retail property with multiple tenancies is a bit like a ‘big ship’ on a journey to a port called ‘Property Performance’.
The retail journey can be a challenge and all the issues within the property have to be optimized. A retail business plan is something that will help pull everything together.
In this audio program, John Highman talks about the ways to compare retail property performance today. You can get the audio here:
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?
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:
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.
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.
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.
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.
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.
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.
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.
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.
In retail property and shopping centre performance today, the tenant mix and the income created from the tenants in occupancy needs to be shaped and improved over time. That is where ‘tenanting mix orchestration’ is a useful skill to learn and to feed into the property investment strategy.
The suggestion here is that the tenant mix can be shaped and improved. That is certainly the case in retail property performance. That is your job. The landlord will benefit greatly over time by a well-considered and controlled tenant mix.
Every lease and every tenant in occupancy should be looked at in balance with the surrounding tenants, the shopper clusters, and the customer profiles. The terms and conditions of each individual lease should be negotiated to standards that match the investment targets of the landlord.
Anchor tenants – You have to start your assessment around the stability and business activities of the anchor tenants. Look at the lease conditions that apply to each and every anchor tenant in the property. How long are they in occupancy? What are the terms and conditions that apply to their occupancy? How can they integrate their business activities into the success of the overall property?
Customer profile – You can’t move your property to another location. On that basis your customer demographic will be specific to certain incomes, employment, and family profiles. Understand your customer base and how those customers like to shop locally. You may need to undertake a marketing study through the local area to get the most recent and up to date information about customer activity and or future needs. When you understand the customer, you can set the strategies in place for the ideal tenant mix and property profile. You may also be pulling in the customers from outside of the area through tourism and transient people.
Property design – Every property will have factors are designed to understand and integrate into the tenancy plan. Entrance points, common areas, congregation points, and transport drop off points all influence foot traffic and potential retail sales. The tenancy mix should be designed for customer interaction and sales improvement. That base strategy requires you to put the right tenants in the right locations. You will have a mixture of small and large tenancies to consider. You will also have tenancy locations requiring special consideration such as food retailing, fashion retailing, entertainment, and services. You can get plenty of ideas by looking at other comparable properties locally or regionally.
From these three simple concepts, you can set in motion a comprehensive tenancy mix plan and retail sales strategy. Understand the property, the tenants, and the customers. Balance at equation so that the landlord can optimise rental returns and minimise vacancies. That is what tenancy mix orchestration is all about.
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