By Frank G. Cisneros, Jr.
Mid-tier owners with commercial properties from 10,000 to 100,000 square feet have a big challenge: They don’t have the margins to support full-time, on-premises teams to professionally manage all aspects of their properties’ operations, leasing, banking, tenant services, security and comprehensive maintenance.
So, they contract out their commercial property management requirements to smaller firms or individuals who can perform some of the same services provided by the so-called “big guys” at less cost. However, that does not mean they should expect or accept less effective, attentive, economical or less professional property management services, right? Often, unfortunately, they do.
Based on nearly 30 years of experience in property management, ownership, brokerage, leasing and many other commercial real estate services, here are some key characteristics I recommend mid-tier owners should be seeking from their independent property management providers:
• They should be your eyes and ears. Your PM professional must know in detail what is going on at all of your properties at all times. Yes, 24/7. There should be no surprises. He or she should have valid, informed answers to your questions and immediate solutions to any problems that pop up. These should be anticipated.
• They should be proactive (again, no surprises). That means constantly monitoring the materiel state of the properties so they can recommend replacement, maintenance or upgrades to important structural components like roofing, electrical, HVAC, plumbing, drainage, parking and landscaping BEFORE they become deficient or break down (and therefore more costly to remediate). You don’t want to get a call saying something major is broken or needs repair – and that you have to write a huge check.
• They should visit often, adopting a hands-on approach. That means they should not be a “drive by visitor” who occasionally shows up for a windshield survey of conditions. I make it a personal practice to walk my clients’ properties weekly or more often. I get to know the tenants personally, actually talk to them about their needs, wants, observations and recommendations. That way, I literally have my finger on the pulse of the property, effectively monitoring its general health and well-being. Tenants are not shy about communicating very candidly. This is excellent intel, and again, is a key component of being proactive. Touch the property. Be attentive. Know the building and watch for subtle things.
• While monthly financial reports and bank reconciliations are routine and expected, you should require those to include exceptional financial detail generated by a leading property/asset management and forecasting software like Timberline. The level of detail generated by this software (as opposed to QuickBooks, for example) provides you with deep-dive financials and extremely actionable trends analyses – again, to avoid surprises.
• Your PM should have relationships with vendors, suppliers and sub-contractors that are up close and personal. The best PMs have all the personal contact information for those service providers so they can reach them in minutes to handle an impending problem or jump in to start to handle an emergency until the PM can be on site. The PM’s personal relationships should include law enforcement and public safety personnel as well, of course.
• And finally, a good question to ask when considering a property management professional or mid-tier PM firm is: “Will they treat my property as if it is their own?” The answer must be “yes.” As a property owner myself, that’s certainly the Golden Rule by which I live and work.
(Frank G. Cisneros Jr. is Vice President of Property Management at The Krauss Organization, which has provided comprehensive commercial real estate services in the Tampa Bay region for almost 65 years. He can be reached by e-mail at email@example.com, or by calling 813-885-5656).