Real Estate Insider: Commercial property management takes skill and sensitivity

By TIM REID
and TAMMY COX

Commercial property management is not for the faint of heart. Good property managers must have several skillsets. They are part construction manager, part accountant, part engineer, part psychiatrist, part interior designer and part landscape architect … the list goes on. For this reason, most owners opt to hire a property management company to service their real estate assets. Throughout the selection process, property owners must know what questions to ask and how to know if they are receiving a fair deal.

Certification and licensure
Perhaps one of the most important factors in choosing a property manager is whether or not they are a Certified Property Manager (CPM). Through this and other credentials (such as licensing) a property manager demonstrates a level of education, dedication and expertise to the industry that a lay person would not have. Furthermore, it is not an endeavor that can be achieved quickly or easily. Much like the Certified Commercial Investment Member (CCIM) designation, the process takes roughly two years, and the applicant must take a number of classes and pass a rigorous final exam to even be considered to earn the designation.

When a property manager has one or numerous forms of certification or licensure, it shows that they are in the business for the long haul rather than just punching a time card. In many states, being licensed in real estate is a requirement to work in the property management field. Keeping up with regulation is much easier when you hold a license, certification, or are involved in some sort of professional organization.

Involvement in concurrent professional organizations such as Commercial Real Estate Women (CREW) or the Building Owners and Managers Association (BOMA) is also a mark of a competent property management professional. Having a consistent source of knowledge and resources to pull from sets experienced professionals apart from those who may not be the best fit.

Communication
It is no secret that tenants appreciate a property manager who is a good communicator, responsive to concerns, and proactive in building maintenance. A good property manager is able to quickly provide assistance for any need that may arise, as well as anticipate issues before they become problems. Knowledgeable managers who provide timely assistance build trust and rapport with the tenants. Satisfied tenants typically remain, unhappy tenants relocate. Establishing a presence and familiarity with each property is extremely important, as tenants and owners want to know that property managers can respond quickly to tenant and building needs.

When property management is quick to respond it speaks leagues to the tenants and owners. Nothing shows care to those being served more than dedication and a fast solution to whatever problem they may have. That is the heart of why they are paying for property management services, after all.

Trust
Above all, owners must be able to trust the property management company they employ. They need to know that the property manager will do everything in his or her power to keep the building up to par and keep it from falling into disrepair. They also must know that they are going to be treated fairly from a monetary standpoint as well.

An owner may expect to pay around 4 percent on gross collections. Anything exorbitantly higher should raise an eyebrow and some deeper investigation on the part of the property owner.

Every step should be taken to ensure that a property manager is legitimate, dedicated, competent, and above all else, honest. When looking for a property manager, ask for references and don’t be afraid to call on those references to get the facts. Reputation should be a guiding factor in the decision.

Trusting a real estate asset, specifically a commercial real estate asset, to a property management company is akin to trusting someone with their child. It is important to know the ins and outs of how business is conducted on the property manager’s part as well as how qualified and productive they are at carrying out necessary tasks (e.g. snow removal and HVAC fixes).

By asking a few simple questions and comparing notes, commercial owners can guard against incompetence and dishonesty and trust that their assets are in good hands.

For more information on the property management industry, what is entailed in credentialing and for other resources, visit the Institute of Real Estate Management (IREM) website at www.irem.org.

Tammy Cox is a Senior Property Manager/ Asset Services Specialist with Cushman & Wakefield | Commerce focusing on property and asset management. She can be reached at [email protected]. Tim Reid is a regional market leader with Cushman & Wakefield | Commerce where he leads brokerage services, drives business development, oversees recruitment and client relationships, and supports brokers in assisting clients with transactions. He can be reached at [email protected]. This article first appeared in Idaho Business Review, a sister publication of The Daily Record.