When it comes to managing a commercial property today, controls and efficiency will help you provide professional service to your customers. Specifically, all of your systems should be well documented and relevant to each type of property.
This then suggests that particular checklists will apply to office real estate, commercial real estate and industrial real estate. The checklists will also be different when it comes to leasing and property management.
Here are some tips to help you establish a strong vetting process as part of your agency’s property management services.
- Lease documentation should always be checked when taking on new property management. In many cases, you will find that certain documents are missing in certain respects or that critical dates have not been taken into account. If someone gives you a lease schedule as part of the handover, make sure the schedule is fully checked against existing lease documentation. You also need to understand that lease documents are not the only occupancy documents. You can and will usually find special documents relating to licensed occupancy, and this would normally include parking, signage, storage and special use areas. These documents may be separate from the lease documentation.
- Check for arrears in the property as part of the transfer process. Any existing backlog will need to be quantified for any action that may be required. Ask for copies of all documents and letters relating to the arrears lawsuit. If special agreements have been made with existing arrears, you will need a copy of the documentation.
- Get to know the tenants and the property as early as possible. When it comes to changing property managers, tenants can be quite sensitive to new arrangements and new people. Introduce yourself personally to tenants during a daily handover of the property.
- Understand what the owner requires from reports and approvals. Each landlord will be unique and different when it comes to the communication and reporting process. Some owners will have specific cash flow requirements and reports to substantiate the cash flow. In complex properties with multiple tenants, this can become quite a challenge. Make sure the property manager you choose has the experience to meet the owner’s requirements.
- Speak to the people responsible for maintaining the property as soon as possible. They will tell you a lot about the property today and potential maintenance failures in the future. This information will help you plan your cash flow and expenses over the coming years. Ask maintenance personnel what specific plant and equipment factors are critical to property performance. Any older installation and equipment should be closely monitored for potential failure.
- Departure management is part of the property management control base. Property expenses should be managed according to the building budget and the requirements of each rental document. Many leases will have different expense recovery control and reporting factors. For this reason, all rental documents must be carefully reviewed as part of the process of taking ownership.
- The history of the property will always be relevant. If possible, obtain copies of previous reports, financial activity and rental documents. This information will help you establish the status of the existing rental mix and determine how the property can evolve as an investment.
- Income and expense budgets can be current or this year. These budgets should be passed on to new property owners and managers. This will tell you how existing expense recoveries were established and on what basis.
- Vacancies reports and strategies will vary throughout the year. It is important to note that all vacant areas are successfully marketed to reduce vacancy downtime. Any pending and upcoming vacant tenancies should be aggressively marketed to find the necessary new tenants.
- Rent review profiles and option strategies will be reviewed as part of the scrutiny of lease documentation. Find all the critical dates for rent reviews and option schedules. Critical dates should be entered into a form of diary system so that you can activate the event early or on time.
Professional commercial property management services are carried out only by systematized actions and well-qualified people. Take the necessary steps to establish your own systems as early as possible in the property management process. These elements above can be modified and expanded depending on the type of property and the location of the property.