A trained, commercial property manager can improve your results
If you’re the owner of a commercial property and you’re not getting the results you want from your property management company, it may be because they don’t have the right skill set to optimize your asset.
Look at it this way, if you had heart disease, you wouldn’t go to an oncologist to treat it. It’s the same with different asset types – the right specialist can have a big impact on your results. Many owners think that all property managers have the same skills and training, and as a result they’re underserved.
A commercial specialist will see your property as an investment with growth potential
Property management companies will often assign strata managers to their rental portfolios, but the thinking required to optimize a commercial rental property – or an apartment building – is quite different from strata management.
Typically, strata managers are strong administrators who are good at advising strata councils on how to follow guidelines. Good rental property managers, however, are proactive, entrepreneurial thinkers who are skilled at helping a landlord run a business. They see properties as investments with growth potential, understand the full impact of leases, know how to balance tenant and landlord needs, and have specific industry training. Those differences in mindset and skills are why we don’t assign strata managers to our commercial accounts, even though they may be very good at what they do.
A good commercial property manager will come to you with business solutions…
The focus of a commercial property manager is to drive your asset and revenues. When problems arise, an experienced manager will approach the issues with a business mindset. For example, we’ve had struggling retail tenants approach the landlord for a rent reduction, and our first step as managers has been to hire a consultant to review the store’s product mix, placement and turnover, and their financial statements. We see if we can help the tenant fix their business first, before asking the owner to reduce the rent.
…and offer unbiased leasing advice that anticipates any potential problems
A commercial property manager is also able to analyse the impact of a proposed lease on your building. We often serve as an unbiased, second opinion for our clients – particularly during this pandemic, when landlords are being asked to consider subleases by struggling tenants. We review the financial and non-financial terms of the lease to project what they might mean for our client’s future.
What looks like a good deal up front, isn’t always a good deal down the road. A good commercial manager will advise on issues like the risk/return ratio of leasing to a local business for a higher rent, versus leasing to an established chain that will grind the landlord for fees and operating costs, but who is a skilled survivor in the market.
At lease renewal time, we often tell clients what to include in their negotiations with specific tenants to avoid future problems, and where they can negotiate to their advantage. It`s information that their broker is unlikely to have, but that Transpacific is happy to provide.
Trained commercial managers have industry insight into opportunities and risk
Commercial managers receive training that keeps them up-to-date with industry thinking and trends. They attend events like the International Council of Shopping Centres (ICSC) conference to get industry insight into major retail players and their leasing requirements.
Some property management companies like Transpacific will have a Certified Commercial Investment Member (CCIM) on staff – meaning that they have extra training in financial, market, and investment analysis to help their clients minimize risk and make more informed decisions.
Before you hire, review your property manager’s experience
The property management industry is changing. Many residential strata managers are migrating into commercial property management due to the high burnout rate in their field. If you’re interested in maximizing your investment, it’s more important than ever to review your property manager’s background. Every company will have a different approach, but at Transpacific, we serve our clients best by being specialists.