What Does a Commercial Property Manager Do?
A commercial property manager is a specialist tasked with overseeing and directing real estate assets, including:
Office buildings
Industrial facilities
Retail facilities
Mixed-use facilities
A commercial property manager does not manage residential housing, and for our purposes, as we do not manage multi-family, we have excluded it from the article.
In this blog, we’ll break down what our Commercial Property Management Team does at Modern CRE. One important note; some of the tasks MCRE takes on go well beyond the standard Commercial Property Manager tasks. That means the outline below covers both basic Commercial Property Manager responsibilities and the more advanced responsibilities that only top-tier Property Management teams offer.
Let's go deeper into these responsibilities, and define the work of a Commercial Property Management Team:
Property Maintenance
One of the primary roles of a Commercial Property Management team is to ensure buildings are in the best physical condition. To do this well, the team must include building engineers and maintenance techs with specialized expertise. These experts will monitor the state of the property, conduct necessary maintenance, and coordinate with outside vendors when needed.
Routine Maintenance
Scheduling regular inspections and maintenance is critical to:
Keeping landscapes and infrastructure in pristine condition
Addressing potential issues promptly
Preserving property value over time
The best Property Management services are proactive in their work, getting ahead of issues and addressing problems upfront which will save money and headaches in the long term.
Vendor Coordination
Each property is its own business, with many different services required. These services may include contractors, architects, landscapers, snow removal services, and so on.
A good property manager will oversee all of these contractors and vendors to ensure smooth operations. A great one will have connections to multiple trusted vendors for each service. They will also bid out projects when needed and actively look at annual contracts to ensure service is top-level and expenses are continuously managed.
Tenant Relations and Management
Tenant management is a cornerstone function of a Commercial Property Manager. It encompasses a spectrum of activities to maintain positive relationships and maximize occupancy rates:
Communication
Curious about who resolves disputes in commercial properties? That’s a property manager’s responsibility, too. They serve as the primary point of contact and have the primary responsibility to look for solutions to issues that might arise. This is because a Property Manager’s responsibility isn’t just to manage the physical space, but also to nurture communities and make tenants feel heard and valued.
Work Order System
The Property Management Team oversees and responds to any work orders, whether from tenants or initiated internally. A quality Commercial Property Manager must maintain an easy-to-use reporting system and respond to issues in a timely manner in order to support good Tenant Relations and ensure positive tenant experiences.
Tenant Retention
The world of commercial real estate is not solely about buildings – it's also about creating environments where tenants feel things work well and they are happy with their place of business.
It can not be stressed enough how important face-to-face relations are to maintaining Tenant Relations. Property Managers must be active at each and every building they serve, providing direct interaction so tenants feel seen and heard and utilizing tools like surveys to understand tenant sentiments.
Financial Management and Reporting
Next, let's discuss Property Accounting. Property Accounting covers tasks that, traditionally, a Commercial Property Manager wouldn’t usually be taking care of. However, a comprehensive Property Management Team like the one at MCRE takes a more holistic approach and, ultimately, improves the efficiency and quality of how a property is cared for.
Property Accounting refers to the tasks associated with the financial health of a commercial property - budgeting, rent collection, and financial reporting. It’s specialized work, requiring dedicated experts working as part of the overall Property Management Team.
Budgeting
The financial well-being of a commercial property starts with creating and managing a budget. This budget covers:
Operational costs
Maintenance costs
Improvement costs
A properly managed budget ensures every dollar is spent wisely to maintain the property's value and functionality, while also planning for future enhancements.
Rent Collection
Other important aspects of property management include verifying that rent and other fees are paid promptly and managing accounts receivable. Having a system for on-time and accurate delivery of rent statements and collection of rents is a cornerstone of a healthy operating building.
Financial Reporting
Creating financial reports for property owners is one way a great Property Management Team keeps a busy owner informed and engaged on exactly how their asset is performing. It gives owners a clear view of the property's financial health, upcoming expenses and helps them make informed decisions about its future.
Ensuring Legal and Regulatory Compliance
Navigating the maze of legal and regulatory requirements is a critical responsibility for a Commercial Property Manager. It requires staying on top of changing laws and regulations to ensure everything is compliant, protecting both the property and its owners.
Regulatory Knowledge
Keeping up with local, state, and federal laws, along with building codes and zoning regulations, is a big part of the Property Management Team’s job. Staying compliant is essential to avoid legal troubles and/or fines, ensuring everything runs smoothly and by the book.
Lease Enforcement
Enforcing lease terms and handling any legal issues that arise from lease violations is also a crucial responsibility of the Property Management Team. This includes, for instance, handling eviction processes and any other legal dispute in accordance with the law and other regulations.
Risk Management
Finally, spotting potential risks and putting measures in place to mitigate them rounds out a Commercial Property Management Team’s legal and regulatory duties. This includes making sure insurance coverage is solid and appropriate safety protocols are in place. This ensures the property and its owners stay ahead of the game, catching issues before they turn into problems and keeping the property and tenants safe.
Project Management and Property Improvements
On top of everything else, great Commercial Property Managers are proactive about identifying opportunities for a property’s improvement.
Capital Improvements
In property management, a big part of the job is planning and overseeing major renovation projects. This isn't just about refurbishing the property; it's about adding value and making the property more attractive. When investing in these improvements, visual appeal is important but typically is paired with attracting or retaining tenants who might be willing to pay more and giving the property an edge over others in the market.
Tenant Build-Out
Many Tenants will enter a lease at a property that includes Landlord-funded Tenant Improvements (TI’s). It is important that these TI projects are actively managed so no funds are misused, spending is maximized, timely completion is accomplished, and the building integrity is maintained. Typically, someone from the Property Management Team will be the ideal individual to help manage this process on behalf of the Landlord to accomplish all that is desired.
Conclusion
There are many, many tasks that occur behind the scenes to keep commercial properties humming. The Property Management Team has the core responsibility to keep a building safe, sound, and vibrant. They also need to keep the property economically successful for both the Tenants that occupy it and the Owners that have invested in it.
With so much at stake, Commercial Property Management can’t just fall back on just ticking boxes and crunching numbers. The work requires a delicate balance of technical prowess, people skills, and strategic thinking. The right Commercial Property Management Team can turn challenges into opportunities and transform properties into attractive, welcoming spaces where businesses can flourish and communities can thrive.
MCRE is ready to be that Team, taking care of your property while elevating it to a whole new level of success. Let’s start a conversation today.