5 Tips for Successful Commercial Property Management
Commercial property managers are often confused with residential property managers, despite vast differences in scope of work and property types. As a commercial property manager, you’re most likely responsible for the maintenance and operational oversight of business parks, retail spaces, storage units, or other kinds of non-residential properties. Commercial properties, while sharing some similarities with residential properties (leasing agreements, tenants, etc.), come with a unique set of problems that widen the scope of a commercial property manager’s work.
Longer leases, common area maintenance (CAM), property wear-and-tear, and unexpected emergencies can sabotage a commercial property manager’s success. Luckily, there are some ways to prepare, prevent, and rectify many of these common detriments.
Here are a few tips to help commercial property managers stay sane and successful all year-round:
#1 – Invest in Commercial Property Management Software
The more time you spend in the workforce, the more you value the phrase, “Work smarter, not harder.” This is where a good commercial property management software comes into play. Managing office spaces, industrial centers, and retail properties involves a delicate juggling act with a plethora of information, transactional details, and regulations. A good-quality commercial property management software program will do the remembering for you, giving you the bandwidth that you need to focus on things that truly deserve your attention.
Investing in a commercial property management software will help you organize specific details that you’ll need to revisit later to make informed decisions that could directly impact the future of your property. Find a program that can track:
- Rental income rates
- Total monthly expenditures
- Types renters/tenants based on location and property type
- Applicable local and federal regulations
- Renter turnover rates
- Work orders for property maintenance
- Scheduled clean ups, appointments, or inspections
All of these variables spread across multiple units is too much information to manually track but will ultimately help you and your team create a more seamless experience for tenants when it comes to work orders, communication, online bill pay, and even property marketing.
#2 – Know Your Space
It’s important for commercial property managers to have a thorough understanding of both their industry and the commercial spaces they’re responsible for. Commercial properties are more diverse than residential properties and require more spatial optimization to account for renter types; businesses, restaurant spaces, and other types of industrial uses. Understanding the unique needs of each commercial property is vital to successfully managing these spaces. This is especially helpful when it comes to property-specific regulations, such as the increased safety measures in restaurants vs. the safety rules of an office space.
Beyond a high-level understanding on the types of commercial properties, a property manager should know the ins and outs of the physical spaces under their care. This means performing routine inspections on all units within the commercial property. Keeping a record of each unit’s use, condition, specifications, and areas for improvement will help you fill open rental spaces, prevent future problems, and create a paper trail of maintenance work done on each unit. Hint: You can enter all of this data into your commercial property management software.
#3 – Always Be Upgrading
Making routine upgrades to your facility might sound expensive, but it can positively impact your bottom line. Today’s commercial renters are looking for newer spaces with more amenities – and you need to update and upgrade to compete. Updates don’t have to be complete renovations though. Cheap but effective updates include upgrading light fixtures, smoke detectors, and smaller electrical appliances like fans, copy machines, and televisions for common area entertainment.
Keeping tenants happy is rarely a simple task, but small upgrades can go a long way in the satisfaction department. A great way to keep up with and track upgrades is to include in them in your property maintenance plan.
#4 – Have a Proactive Property Maintenance Plan
Properly maintaining a commercial property should be considered a priority for any property management professional. This can be daunting because simply keeping up with basic maintenance and efficiently responding to emergency maintenance requests isn’t enough. These are reactive approaches to property maintenance. Preventative maintenance will reduce the amount of required reactive maintenance, protecting both you and your tenants.
A proactive maintenance plan should consider all aspects of a commercial property including:
- Plumbing and electrical systems
- HVAC and ventilation systems
- Pest control
- Normal wear-and-tear (paint, drywall, etc.)
- Code violations
- Upgrades & replacements
Here are a few ways that preemptively inspecting and addressing potential issues will help you and your tenants maintain a satisfactory and successful relationship:
- It Helps Reduce Maintenance Costs. Fixing small issues before they can become larger issues is a good way to save money on property maintenance. For example, fixing a plumbing leak while it’s a trickle is a lot cheaper than having to tear out and replace large sections of your property’s walls and flooring because of water damage.
- It Keeps Your Commercial Property Looking Nice. The appearance of your commercial property can play a role in the success of the businesses that rent space there because it helps attract customers. This, in turn, helps tenants make their payments (and encourages them to keep renewing their leases).
- It Helps Prevent Injuries. A lack of maintenance can lead to dangerous conditions in a structure. From respiratory hazards from mold growth, to tripping on uneven flooring, to slips in water puddles from leaks, there are many hazards that occur when maintenance is lacking. Using preventative maintenance helps to prevent these injuries.
- It Can Keep Property Values Up. Commercial properties are often valued based on their grade or class (A, B, or C), with better grades being able to command higher rental fees. Falling behind on maintenance issues can lead to a reduction in class, which makes it harder to command a higher rental fee for the property.
#5 – Keep Your Tenants Happy
Losing tenants is an inevitability. Businesses outgrow spaces, operations move to different states, and sometimes tenants just aren’t happy where they are. The latter of these things can and should be prevented. Afterall, it’s easier to keep tenants than it is to acquire new ones. The best way to keep your commercial property bustling with activity and full of tenants is to create a safe, positive environment in every single unit. Performing upgrades and abiding by your proactive property maintenance plans are all part of the equation – but there’s more to it than that. Commercial property managers need to do more than know when to request a handyman, they need to be able to meet the needs of their tenants.
This can look like a lot of things depending on a property manager’s tenants. In a retail lot, property managers need to be cognizant of tenant spacing. Finding a balance between vendor or store types is imperative to maintaining homeostasis on your property. For example, avoid putting two shoe stores right next to each other—unless one specifically targets men’s fashion and the other women’s, there might be too much overlap in their target audiences. If these similar businesses are too close, they may interfere with the other’s revenue and struggle with satisfaction as well as rent payments.
Another way to ensure the success of your commercial property management career is to build connections with your tenants. Communicate with your tenants regularly to get a pulse on what makes them happy and what makes them feel dissatisfied with their rental space. Tenants are more familiar with their individual spaces and may be able to point out potential problems that would otherwise go overlooked. Personalized attention and connection will make tenants feel more comfortable in their spaces, leading to better property maintenance and lease renewals.
These are just a few of the things that you can do to achieve success as a commercial property manager. For more information about commercial property management—and particularly about property maintenance— reach out to the HOMEE team today.