Commercial property management tips for professional real estate agencies
When it comes to managing a commercial property today, controls and efficiency will help you provide professional service to your clients. More particularly, all your systems must be well documented and relevant to each type of property.
This then suggests that particular checklists will apply to office property, commercial property and industrial property. Checklists will also be different when it comes to property management with lease payments.
Here are some tips to help you establish a strong monitoring process as part of your agency’s property management services.
- Leasing documentation should always be reviewed when it comes to taking over the management of a new property. In many cases, you will find that documentation is missing in some way or that critical dates have not been met. If someone gives you a lease schedule as part of the property handover, make sure the schedule is fully cross-checked with your existing lease documentation. You should also understand that lease documents are not the only documents related to occupancy. You can and usually will find special documents related to the licensed occupancy, and which would normally include car parking, signage, storage, and special use areas. These documents can be separated from the lease documentation.
- Check property arrears as part of the delivery process. Any existing backlog should be quantified for any action that may be required. Request copies of any documentation and letters that relate to the arrears search. If special agreements have been made with existing arrears, you will need a copy of the documentation.
- Get to know the tenants and the property as soon as possible. When it comes to changing property managers, tenants can be quite sensitive to new arrangements and new people. Personally introduce yourself to tenants at a Property Delivery diary.
- Understand what the owner requires from reports and approvals. Each owner will be unique and different when it comes to the communication and reporting process. Some owners will have special cash flow requirements and reports to substantiate cash flow. In complex properties with multiple tenants, this can become quite a challenge. Make sure the property manager you choose has the experience to meet the owner’s demands.
- Talk to the maintenance people involved with the property as soon as possible. They will tell you a lot about the property today and possible maintenance failures in the future. This information will help you plan for cash flow and expenses in the coming years. Ask maintenance staff about specific plant and equipment factors that are critical to property performance. Any older plant and equipment should be closely monitored for potential failures.
- Outgoing management forms part of the real estate management control base. Property expenses must be managed within the building budget and the requirements of any and all lease documents. Many leases will have different control and reporting factors when it comes to cost recovery. For this very reason, all lease documents should be carefully examined as part of the property takeover procedure.
- The history of the property will always be relevant. Obtain copies of previous reports, financial activity, and lease documentation when possible. This information will help you when it comes to establishing the status of the existing tenancy mix and how the property can go forward as an investment.
- Income and expense budgets can be current or this year. Those budgets must be passed on to new owners and property managers. This way you will know how existing outgoing fetches have been set and on what basis.
- Vacancy reports and strategies will vary throughout the year. Importantly, any vacant area is successfully marketed to reduce vacancy downtime. Any pending or upcoming vacant leases should be aggressively marketed to find the necessary new tenants.
- Lease review profiles and option strategies will be reviewed as part of the lease documentation scrutiny. Find all critical dates related to rental reviews and option deadlines. Critical dates need to be entered into some kind of journaling system so you can trigger the event early or on time.
Professional commercial property management services are only achieved through systematic actions and well-qualified people. Take steps to establish your own systems as early in the property management process as possible. These items above can be modified and expanded depending on the type of property and the location of the property.