Is your shopping center management company guilty of these all-too-common flaws?
Finding a qualified property management company to manage your mall is sometimes a little more than a walk in the dark. It’s hard to say how well your business will perform in day-to-day operations. Here are some tips we’ve put together to help shed some light on the subject.
1. Lack of a strong rent collection and deposit system
Surprisingly, many so-called professional mall management companies have never set up an efficient and smooth collection and deposit system. This can lead to late payments and even missed payments. This can be a tricky situation with your tenants, so be sure to only select a company whose payment/deposit system is fully designed and foolproof.
2. Misunderstanding of laws and regulations.
Shopping malls must adhere to a wide variety of rules, laws, and ordinances, and your property management company must know them inside out. Make sure you know your management company’s mastery of the following important legal topics:
o Tenant advertising
o Loading and unloading
o HVAC and plumbing
o Noise limits
o Garbage collection
o Pest control requirements
o Store plan approvals and permits
o Outdoor promotional activities
3. Improper maintenance procedures.
You would assume that a property maintenance company would be competent in keeping your property clean and well maintained. Unfortunately, while they all pay lip service to maintenance, many companies are woefully inadequate at execution. In our experience, this is not always simple incompetence, but sometimes a premeditated tactic by which some companies take shortcuts. If they spend less time on maintenance, they increase their profits, at your expense. Ask your property manager candidates to fully disclose and explain their maintenance schedules, including any inspections they perform to ensure work is being performed to your high standards.
4. Inadequate tenant retention programs
You pay a lot to secure every tenant in your facility, so keeping them is critical to your bottom line. Make sure your mall’s property management company is knowledgeable and experienced in running programs that encourage tenants to renew their leases. This means that your managers must be good at spotting potential issues and dealing with them quickly. When a dispute arises, they must be very good at resolving conflicts and providing solutions. Most importantly, they must be able to speak and listen to tenants. They need to know which tenants should be kept and at times which ones should be let go for the overall good of the property.
A strong shopping center management company will have a strong program in place to communicate regularly with tenants. The program should be designed to encourage two-way conversations and be able to identify issues while they are still manageable.
5. Not qualified for relationship building
When you find a competent property manager to build and cultivate national tenant relationships, you’ll never want to lose them again. Finding long-term anchor tenants is critical to your long-term success, so emphasize this skill from whatever company you choose to go with.
Incidentally, relationship building skills are also important for your dealings with local tenants, contractors and suppliers. Property managers who cannot communicate well with these critical resources will undoubtedly not meet your overall performance expectations.
6. Reactive rather than proactive
Very good property managers are proactive to the point of fault. They are ahead of the issues, up to date with the latest information – good and bad – and knowledgeable enough to offer good advice before you even know you need it.
Reactive managers give advice long after it has done you good. You don’t have that kind of manager on your team.
Research your management company’s systems that allow them to perform comprehensive analyzes of your mall’s performance, including current rents, lease expiries, renewal options, planned rent increases (if applicable) , and more. Then, a deeper analysis is needed to qualify the best options to bring more stability within the mall, such as:
o Break up space to collect more rent
o State of the property
o State/business climate of the areas surrounding the center
o Redevelopment capacity and feasibility of this option
o Facelift vs full facelift
o Ability to attract new (and national) tenants
o Keep the center up to date and at the height of the market
o Lease renewal options to help landlords protect their assets
7. Inability to negotiate well.
Negotiating well is perhaps the most important skill a property manager can have. They need to understand the right balance between representing your best interests and meeting your tenants’ desires. Prime tenants, of course, are known to be tough negotiators, and your manager needs to be able to handle them.
Without strong negotiation skills, your manager could jeopardize your investment in a mall and you could lose all the money you invested there.