Fundamentals of Commercial Property Management
One of the key ways to enhance the appeal and value of commercial property investment is through good property management. Buying right is crucial; what you do with it in your ownership is generally more important. Here are some fundamental tips for good commercial property management.
Build a relationship with landlord and tenants
It can challenging and expensive to find new tenants for commercial properties. Therefore it is essential to have your property occupied and therefore a great way to maintain your return is to retain existing tenants.
Maintaining a positive and constructive tenant relationship is a must. Regular communication, understand their business and operations and be proactive. This will all aid the management role.
Maintain the property
The appearance of a building is important for a company’s success and great for sound property investment. If the landlord has repairing responsibilities ensure that these are done to an appropriate standard and timely. Part of the management role is to monitor and if needed encourage tenants to fulfil their obligations. Deferring any maintenance can lead to greater cost later.
For a large commercial property, the list of things that need to be regularly maintained is likely to be extensive. Plan. Plan and plan.
Improve the property
Maintain and make targeted improvements. Some costs will enhance rental value, others will maintain the investment. Both are important, ignore neither.
Know your management role
Owning and managing commercial real estate requires specialist knowledge and expertise. Retail, office, and industrial properties each require different skill sets; understanding of your client, tenant and maintenance expertise. Know your role and what services you need to provide. Know your market and local competition.
Know the leases, in detail.
Leases are complex, often long and detail with lots to read and understand. One of the best ways to increase value is through diligent analysis and understanding of the terms and ensuring the lease provisions in delivered. If there is a Service Charge this must be operated strictly as prescribed in the lease and will require day to day responsibilities in addition to a longer-term strategy.
Have an asset management plan
Like any investment, commercial property should involve a plan. Why have you invested in that specific property? What are your aspirations and any potential? How can this be achieved? What is your timescale? Lots to consider. Lots of variables. All potentially having impact and need to be considered, ongoing.
Be informed. Be realistic.
Good reliable information should inform your decisions. Base your judgements and decisions on the right information. Being commercial is one thing but being aware of reality will ensure you are aware of risks and opportunities.
We’d love to talk about these and other aspects of commercial property management.
Call 01271 386 306
Peninsula Management | Chartered Surveyors