M uch like a residential property manager, commercial real estate managers oversee their buildings’ day-to-day operations and maintenance. While the scope of work can be significantly broader, below is a quick guide to help you manage your new office or investment property:
Be Proactive About Maintenance
The top responsibility of managing a commercial property is ensuring the structures and grounds are in good repair. Take a proactive approach instead of waiting until something breaks or looks so rundown it’s hurting business, your employees, tenants, and visitors.
For example, if you’re in the North Beach area, you wouldn’t want to wait to hire a commercial paving company in Sacramento, CA, to repave your lot until a visitor gets hurt by a pothole. Conducting ongoing maintenance can avoid these costly situations, which often raise your commercial insurance premiums because of injury claims.
Staying ahead of problems also means fewer emergency repair calls that are significantly more expensive than normal requests. Plus, your visitors, customers, and clients will be more likely to renew their lease terms and accept increases in fees when upgrading their rented spaces.
Invest in Profitable Upgrades
A smart commercial real estate manager also keeps profitability in mind. This means doing more than simply maintaining existing property conditions. If your building has an outdated security system or needs outdoor rest areas or tech-forward conference rooms, you’re making it harder to reach capacity goals. Commercial renters expect a more modern workspace for their money. Despite the initial investment, it will take a little while to recoup this money and ask for higher leasing rates when these upgrades get completed.
These updates don’t have to rack up a large amount of overhead, either. Instead, update lighting, install more televisions in common areas, and provide office equipment in meeting rooms. You should also remember your building’s grounds need attention too. Work with landscapers to create a more attractive entryway, or hire commercial pavers to create a more attractive walkway into your atrium.
Invest in Commercial Property Management Software
Managing commercial real estate requires organizational skills and efficiency. While you can get by with a traditional filing system and a Quick Books subscription, you’ll find this can be unnecessarily time-consuming.
Instead, streamline your workload by using management software that enables you and your team to track information about your properties, your expenses, revenue, and tenants under a single umbrella. This removes the burden of remembering all the details and has technology act as your memory bank instead.
When researching the best platform for your office to use, consider the information you need to organize and store for your team:
- Monthly costs
- Rental income
- Maintenance requests
- Vendor contracts
- Leasing appointments
- Unit inspections and clean-outs
- Renter turnover
This list just highlights the primary information you’ll need to keep track of as a commercial property manager. You can also use this tech to provide tenants and customers with an online portal to communicate with your office about their needs and make their lease payments. Imagine how much productivity you can reclaim in your day!
Understand Your Property’s Purpose
Another crucial aspect of effectively managing a commercial property is having a thorough understanding of its industry. Unlike a home, a business space has multiple functions because businesses using these spaces often have many departments. This means that there might be specific federal and/or state regulations you’ll need to ensure compliance with or risk hefty penalties and other legal consequences.
For example, if you’re renting out restaurant space to a cafe, there are often specific waste management requirements for substances like cooking oil. While your tenant may have to arrange for this service, you’ll still need to have the location for the disposal container pre-determined.
Happy Tenants = Profit
Tenants will come and go, but you can impact how long they remain in your building. While your clients may move on because they need a larger workspace, it might also boil down to dissatisfaction with their rented unit. If you’re dealing with the latter situation, it’s important to find out what the issue was and if there’s anything your management team can do to fix the situation. Losing tenants come with financial consequences besides lost lease payments.
As a property manager, you have several goals, one of which is to have a low vacancy rate. In addition, you want your building full of businesses that are content because your company provides a safe working environment in every one of your leased offices. Achieving this goal requires more than a stellar maintenance crew, but also superior customer service, open communication, and doing what you can to meet tenant needs. For example, thicker cement walls will reduce the noise from adjacent office units.
Great Properties Have Outstanding Management
While this isn’t an exhaustive list of things you can do to successfully manage your commercial real estate, these four elements offer essential best practices to get you on the right track. Administrative duties like detailed record-keeping and cost tracking are just as essential as keeping the building in good repair by maintaining hardscapes, like curbs and walks. Being proactive can save you and your tenants a lot of frustration and downtime, which translates into everyone finding financial success.
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