The Importance of a Property Manager in Commercial Real Estate
You are leasing space in a commercial building alongside various other businesses. The property is beautifully maintained. The exterior is clean. The landscaping is neat. The building is filled with businesses that get along. Any broken fixtures are repaired quickly. All of this is thanks to the property manager.
Property management can take a commercial property to the next level. They play a key role in the happiness and safety of the tenants. That’s why it’s so important to understand and maintain a good relationship with the property manager or firm. Let’s review the impact they have on the success of a property and how they benefit your business.
The Role of a Property Manager
A property manager or management firm is hired by the owner to look after the property and keep it well-maintained and profitable. Their role falls into two categories: operational and financial. The operational side includes monitoring maintenance, coordinating renovation, documenting, handling tenant requests, and managing leases and evictions.
You likely first met the property manager when you were looking at the commercial space you are in now or are interested in leasing from. They are the ones to show available spaces to potential occupants and vet them ahead of signing a lease. You also probably give them your rent. A property manager coordinates the intake of rent as well as notices when rent payments are past due or missed. Evictions or contract breaches can escalate quickly, so a professional and experienced property manager will excel at de-escalation and litigation management.
For the financial tasks of a property manager, processing rent is among the main and largest responsibilities. The ongoing monitoring of rent payments and penalties is a big task and scales to the size of the commercial properties in the portfolio being managed by the property manager. Additionally, budgets have to be made and maintained for the day-to-day functions of keeping the properties maintained and creating revenue streams. A property manager will be able to analyze and present a concise breakdown of the proposed budget compared to the actual working costs.
Building and Maintaining Relationships
For many tenants, the only contact and face-to-face interaction they have with those who own or oversee the building will be with the property management team. The property manager is your connection to the space you occupy. For this reason, it is vital to keep a strong relationship with them. Having open and positive communication with the manager can help your business when it comes to maintenance, rent, and business relations.
Overseeing Property Maintenance
The maintenance and upkeep of commercial properties keeps the building looking clean, professional, and well cared for. Having a property manager that employs knowledgeable and professional maintenance staff ensures preventative maintenance and proper fixes are addressed in a timely manner. Beyond upkeep and day-to-day fixes, the unfortunate emergency will need to be handled quickly to ensure the safety of occupants and protect the property. It is better to have plans in place for emergency situations than to ignore the possibility of them occurring.
Maintaining the Safety of the Property Through Screening
A property manager will have a system in place for vetting potential tenants. You were likely screened by the manager when you were first looking to lease the space. The tenant screening process can be tedious and requires acute attention to detail. They look out for any red flags. Will they pay rent on time? How long will they be staying? Why are they moving to a new space? By bringing in a property manager to screen potential tenants and take them through the financial and rental history vetting process, you can feel assured that your business neighbors won’t cause harm to the property or your business.
Handling the Finances
A property manager is also in charge of the finances for the property. When rent is due, the manager is responsible for its collection. They also monitor and collect late fees or ancillary charges. The property manager then reports the financial information to the owner, who can’t be there on a daily basis. And finally, they manage the property’s operational budget, ensuring that the financial performance tracks close to what was projected.
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