Real Estate

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 a professional service to your clients. More particularly, all of your systems should be well documented and relevant to each type of property.

This then suggests that the 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 control process as part of your agency’s property management services.

  1. 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 part of the documentation is missing in some respect or that critical dates have not been met. If someone gives you a lease schedule as part of handing over the property, 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 licensed occupancy, and these would normally include car parking, signage, storage, and special use areas. These documents can be separated from the lease documentation.
  2. Check for backlogs on the property as part of the delivery process. Any existing backlog will need to be quantified for any action that may be required. Request copies of any documentation and letters related to the arrears search. If special agreements have been entered into with existing arrears, you will need a copy of the documentation.
  3. 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. Introduce yourself personally to tenants in a Property Delivery journal.
  4. 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.
  5. 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 for years to come. Ask maintenance personnel about specific plant and equipment factors that are critical to the property’s performance. Any older plant and equipment should be closely monitored for possible failures.
  6. Outgoing management is part of the control base of real estate management. Property expenses must be managed based on the building budget and the requirements of any and all lease documents. Many leases will have different control factors and reports when it comes to cost recovery. For this very reason, all lease documents should be carefully examined as part of the repossession procedure.
  7. The history of the property will always be relevant. Get copies of past 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 progress as an investment.
  8. Income and expense budgets can be current or from this year. Those estimates should be passed on to the new owners and property managers. This way you will know how existing outbound recoveries have been established and on what basis.
  9. 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 must be aggressively marketed to find the necessary new tenants.
  10. Rent review profiles and option strategies will be reviewed as part of the lease documentation scrutiny. Look up all the critical dates related to rent reviews and option terms. Critical dates need to be entered into some sort of journal system so that 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 above items can be modified and expanded depending on the type of property and the location of the property.

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