Best Property Management Strategies

Best Property Management Strategies
Commercial Real Estate by Marc Glaser

There are 9 key strategies for improving property value and controlling owner risk.

Key strategy number 1 – Lease management

All leases are not created equal we need to identify tenant responsibilities, owner’s responsibilities and critical dates. We need to have systems in place to track this, whether it be on a legal pad or with a property management program. This allows us to stay on top of the critical dates in leases such as escalations, concessions and when the lease needs to be renewed.

At Tenant Science we review leases and perform a lease abstract, then enter critical dates into our proprietary software that reminds us in advance of critical dates so that we can protect our owners from not collecting all the rents and fees that are due. Our software automatically reminds tenants by email of critical dates and gives tenants an opportunity to pay fees and rents conveniently online.

 

Key strategy number 2- Tenant relations

Answering phone calls returning emails, texts and being available on your property on a regular basis allows you to build relationships with your tenants that keeps mold hills from becoming mountains in their eyes and keeps them as your tenants. Tenants want to be assured that you care.

At Tenant Science we have a dedicated team that will be attentive to the tenants while keeping an eye on the bottom line. Tenants love to go online and see how much they owe for their space at any time. Tenants also love to pay their rents on line, right now we have over 65% adoption month to month on this service which limits the bad checks for us and makes it easy for the tenant to automatically debit their credit card for rent making collections automatic. Additionally, one of our options is to put an onsite property manager in your building to handle incoming traffic and tenant concerns. This can improve tenant relations immediately and put your leasing effort into high gear.

 

Number 3- Operating cost management

If your competition is doing a better job at controlling their operating expenses than you are, you’re risking losing your tenants and being able to attract new tenants. Cost management is a key issue. First, you have to find contractors that are affordable, reliable, and that can do the job. Every property manager has been in a situation where the contractor disappointed us and we have to redo a job, which winds up costing twice as much. Secondly, you have to balance spending the money on improvements or repairs against the long term occupancy investment in your building. You are looking to accomplish two things when making repairs or improvements; tenant retention and tenant acquisition.

At Tenant Science we have worked with our contractors for years and know them to be reliable and affordable but always get competing quotes. Also, it is important that your property manager be well versed in the operations and required maintenance on complex systems like HVAC, plumbing, sprinklers, fire control, access control, and commercial roofing systems. Because contractors don’t always know what they are talking about or the proper way to repair the issue. Our property managers are experienced and trained to diagnose problems with knowledge of commercial systems and will inspect and offer alternatives for every repair.

 

Key strategy number 4 is the annual budget

The annual budget is a road map that charts our course for through the next year. It gives us our projections and our income, our expenses and our cash flow. It really performs 3 key functions:

1. It gives us projections that we’re able to track our operating expenses against to make sure we stay on our course.
2. It gives projections on the fact that, vacant space is going to have a negative effect on your owners’ cash flow.
3. It helps us control and eliminate the dreaded emergency owner’s cash call because we have a game plan for negative cash flow.

At Tenant Science we start with an annual budget and use the budget to make decisions all year long.

 

The fifth strategy is the monthly financial statement

The monthly financial statement is an easy to read easy to understand but detailed statement, that you and all your partners will receive by the 30th business day of the month. It keeps you informed as to what’s going on with your property in the previous month. This allows you to stay in touch with your investment but also frees you up to concentrate on your core business.

At Tenant Science we provide our owners with a detailed monthly reconciliation report along with a check for the amount of profit the building generated the previous month. Also, at any time during the month our owners can check the status and create over 100 different reports tracking all aspects of their investment performance on line.

 

 

 

Number 6 – Capital improvements on long term budgets

Nothing lasts forever and unfortunately that includes the static things like your Sprinklers, Alarm systems, fire control systems, parking lots and HVAC equipment. We need to identify the life expectancy of your equipment, the projected replacement cost and then identify something we can do to extend the life of that asset.

At Tenant Science we suggest a “sinking fund”. A savings account that grows as a percentage of the rent is funneled into it every month. This account and its activity are transparent online through our website.

 

Number 7 – CAM Management

Common Area Maintenance Management is where you collect all the operating expenses that you’re entitled to in your leases. And you do this by good lease management, with a good budget and tracking mechanism, so we know we’re collecting the correct amount of CAM on a monthly basis.

At Tenant Science we also handle Community Association Management where all we do is repairs and collect CAM Charges. So we know what to say when a tenant thinks they are entitled to not pay CAM.

Number 8 – Vacancy Management

You’ve heard the term buyer’s market before, well this is a tenant’s market because we have fewer tenants and we vacant space in our market at this time. So you need to work with your lease agents to make sure that your space is easier for them to rent. The easier it is for them to rent it the sooner you’re going to get your vacant space out of the red where it is costing you money bracket, then into the black making you money every month bracket.

At Tenant Science we are the leasing agents as well as the property managers so we drive the resuts that allow us to generate all the tenants we need.

1. Advertising
   1. To the Agent
      1. We advertise to the commercial and residential agent who may represent a tenant looking for space through;
         1. LoopNet (premium advertising)
         2. CoStar
         3. Exceligent
         4. REIS
         5. The Atlanta Commercial Board of Real Estate
         6. Brokers List
         7. Two Optimized Real Estate Websites
         8. MLS and FMLS
      2. To the Tenant (75% of the leases we write are without another broker)
         1. We advertise directly to the potential tenants through;
            1. Craigslist (our system puts each of your vacancies on Craigslist every day!)
            2. Social Media – LinkedIn, Facebook, and Twitter.
            3. Networking – A member of the Dekalb Chamber, Gwinnett Chamber, and Cobb Chamber of Commerce, BOMA, BBB, GAR, NAR, Atlanta Commercial Board of Realtors, and several others.

Top commercial brokers attend many networking events and have an extensive database of past and present clients.

1. Cross selling, we already have tenants coming to us from other buildings every day. If they don’t like what we have in the building they came to see we will suggest they see yours.
2. Reputation and referrals, be trustworthy, empathetic with people, provide them with a good product and they will tell others. Our agents are all top commercial brokers that deal with numerous tenants, buyers and sellers every day.
3. Single tenant websites, on line ads and landing pages.
4. Professional Signage.

There are three other important parts of vacancy management besides getting people interested in the property;

• Tenant retention – communication, investment in repairs, connect tenants and give business referrals, let them know you care and their business is important to you. Making the space look good before the tenant sees it flies against conventional wisdom but more often than not, a little investment in advance (which you will probably have to make when you get a tenant anyway) is a good investment.
• Credit and Background investigations – It is not enough to have your spaces filled, you have to have people that will pay consistently to manage cash flow. We have every tenant go to our website and click on the tenant application button, fill out a form and pay $35. In less than 10 minutes we receive a full credit and background investigation as well as all their financial, company and contact information.
• The Show – Having professional appearing ads, flyers, offering memorandums, site plans, floor plans and presentations is why we employ a full time graphic artist. Then we have a professional appointment made including a calendar invite and a call prior to the visit to confirm. Finally, a professional showing highlighting all the features and benefits that the tenant may not see and ignoring or even spinning any of the material defects for which they may object.
• Closing and follow up – Sometimes a call to action is all you need but when the tenant needs more attention our property managers are never too busy to follow up and close, close, close.

Number 9 – Advocate

Simply put is keeping you as an owner for what’s going on in Atlanta and Washington that could affect your commercial investment.

So those are the 9 key strategies for improving property value and controlling owner risk. Improving owner value means increasing owner’s cash flow.

Tenant Science’s mission statement spells it out for us. We believe that by acting with integrity and treating everybody with respect, by being thoughtful, caring, supportive and committed to each other and the community; by communicating effectively and listening effectively we will exceed expectations and create memorable experiences.

Please browse our website www.topcommercialbroker.com or contact Marc Glaser at;

404-542-1585 or mglaser@topcommercialbroker.com

Tenant Science Company 4153C Flat Shoals Parkway, Suite 320 Decatur GA. 30034