When it comes to agents managing commercial property today, it is fundamentally important that they provide real expertise to the process. Commercial property is complex by nature and performance. Experience and knowledge will be part of the core skill sets to be provided to the clients that agents act for.
There are a number of key factors to be controlled in the provision of professional commercial property management and leasing services, and here are the main ones:
- Make sure you control the tenants within the tenancy mix so that you can optimize their occupancy in the property. A successful tenant or group of tenants will make it easier to improve the rental within the property and keep your vacancy factors lower. As part of this process the property manager needs to get very close to the tenants in an ingoing way. Regular dialogue and meetings regards occupancy and property usage will help the property manager understand developing problems and challenges that the tenant is experiencing.
- The management of leases within the property is closely aligned to the tenancy mix and the plans of the landlord. Leases present certain challenges that need to be managed such as rent reviews, options, make good provisions, refurbishments, relocations, and property maintenance. Every tenant to be placed in the property should be matched to a lease that is prepared and aligned to the landlord's property investment plans. Every lease that is negotiated should be approached on the basis of its integration into the surrounding tenancy mix. Look at the bigger picture and not just at the single lease negotiation.
- As a property gets larger and more complex, the maintenance management procedures become more sophisticated and critical. A well maintained property allows the tenants to successfully operate their businesses and hence pay the rental. Regrettably a number of landlords will take shortcuts or overlook certain maintenance matters to save on property cash flow. Whilst this may be satisfactory to a point, a poorly maintained property can be easily seen by tenants, customers, and future potential purchasers. Adopt a prudent but wise maintenance management process to support the future of the property for the landlord.
- The financial performance of a commercial property is a fine balance between optimizing the income and controlling the expenditure. Realistically, the income to be generated from rents should be appropriate to the local property market but not too high where it can be aggressively destroying the tenancy mix. High levels of rental have direct impact on the tenant's ability to trade. High levels of rental will also move tenants to other properties nearby at the first opportunity. If your local property market has an abundance of vacant space, you need to be very careful as to how you manage and optimize your rental and tenant relations.
Good financial performance within a commercial property is usually obtained by carefully establishing a property budget prior to the commencement of each financial year. The landlord and or property manager will have relevant discussions as part of putting this budget in place.
It is of note that a property with high outgoings or levels of expenditure will become unattractive to new tenants in any lease negotiation. If tenants are too worried about the levels of outgoings within the concessions as part of the lease negotiation, then they are likely to request a gross rental from the landlord to remove the uncertainty of outgoings escalation.
These are some of the big reasons why commercial property management is just so special; landlords need skillful agents to help them, and not inexperienced generic agents. Agency staff and personal applied to the commercial management and leasing process should be suitably qualified and very experienced. Landlords expect the best property management service and this only comes from the right personnel exercising the correct commercial property management processes.