As the owner of a company that specializes in the management of commercial property and apartment buildings, I’m often approached by landlords who have been using large and reputable property management companies, but who are dissatisfied with the results.
When I drill down to understand the reasons why, it often comes down to a single factor: the large company specializes in strata management and the landlord owns a rental building.
The large company may manage strata properties well, but they shouldn’t be trying to manage your commercial rental property or apartment building using the same staff and approach – the skills and mindset for managing each type of property are quite different.
Strata managers are administrators; commercial property managers are advisors
Strata managers are governed by the Strata Property Act, which is very prescriptive – it clearly outlines the rules, regulations, and processes that owners and property managers must follow. Within the strata management industry, there seems to be a strong culture of deferring to the advice of consultants, or waiting for strata councils to give direction. Strata managers tend to be administrators who ensure that the property is managed within the guidelines of the Act.
A commercial property manager, however, is required to be entrepreneurial and proactive. Commercial buildings are typically governed by a lease, and in a lease everything is negotiable (within the limits of the law). The property manager is helping the landlord run a business, rather than helping a strata council follow guidelines.
A commercial property manager needs to understand the terms of the building lease(s), as well as the investment goals of the landlord. Many commercial landlords will ask the property manager for advice about the lease, accounting, or tenant matters, and a qualified manager will have the answers, or know where to find them. When a commercial tenant calls the property manager to discuss an issue, the lease is the document that determines the outcome of the conversation, not the Strata Act.
In my experience, strata managers typically aren’t trained to think like entrepreneurs and most are not successful in making the transition from strata to commercial management.
Ask to see the specific experience of your potential property manager
It’s important, when you’re looking for a management company, to examine the specific experience of the property manager who will be handling your building.
Ask to see a listing of the current buildings under their management to determine if they are similar to yours in terms of complexity and asset class. (Asset classes: retail, office, industrial, medical, apartments.)
Often, a strata manager will say that they have commercial experience, but what they really mean, is that they have commercial strata experience and – for all of the reasons outlined above – it’s not the same thing.
We employ commercial strata managers and they are excellent at what they do, but we employ different specialists to manage our commercial and residential rental properties. In our experience, each type of rental property is also its own speciality.
At the end of the day, you need a property manager who has specific expertise and experience in your type of building and business, who will not only help your property run smoothly, but also give you the business support that you need.
Looking for a specialist in commercial or residential rental management? Give Transpacific Realty Advisors a call at 604 873 8591.