Property management determines, in a large measure, the final-image atmosphere and tenant appeal of a commercial property. Without tenant appeal, many good commercial projects have been financially unsuccessful. Consequently, professional property management is as important as the location of the physical structure in contributing to the financial success of a commercial property.
Potential tenants have obtained a high degree of sophistication in the selection of commercial space. They are, therefore, no longer making lease decisions solely on the basis of location and rental rate. Rather, potential tenants are now exploring all ramifications of a lease decision including standard installations; the quality and speed of vertical transportation including elevators and escalators, parking supervision and controls, security and safety, energy management, and the day-to-day operation and maintenance of a property. In other words, potential tenants are now asking, “Is the property professionally managed?”
Tenants are not only attracted, but are also retained, because professional property management dictates their comfort, well-being, and satisfaction as tenants. While, in turn, professional property management maximizes revenue accruing to the owner of a commercial property. Professional property management not only maximizes revenues by reducing tenant turnover, it also further enhances profitability by minimizing operational expenses and remodeling costs. Finally, but most importantly, professional property management ensures that the performance and financial goals of the owners are met. It also relieves the owners of the day-to-day operation of a commercial property. Yet with professional property management, the owner is not isolated from his/her investment. Rather, the owner is continually informed of and consulted upon the property’s performance through monthly reporting, accounting procedures, and personal contact. Financial planning and analysis are also provided.
Again, all professional property management services are designed to promote the long term profitability of the property. To maximize the long term profitability of a commercial property, KCI Commercial focuses critical attention on three integral areas of property management:
- Tenant Relations — Assisting in the development of the property’s tenant appeal in order to attract and obtain a stable tenant base, thereby maximizing revenue for the owners.
- Facilitates Management — Providing quality day-to-day management of commercial properties while aggressively and consistently mitigating expenses (including vendor and contractor relations).
- Owner Relations — Meeting the financial and performance goals set forth by the owner(s) of the property while relieving the owner(s) of burdens associated with daily management. The owner is also provided timely reports of all on-going activities.
Particular property management services needed to accomplish objectives related to tenant relations, facility’s management, and owner relations vary from one commercial building to another. Described in the following sections are those specific services.
- Prepare and distribute to tenants a detailed Building Information Package, including property manager’s name and telephone number(s), rent collection procedures, building hours of operation and emergency procedures.
- Review appropriate space allocation and location within the building.
- Maintain open lines of communication with tenants and, whenever possible, to anticipate tenant’s concerns.
- Implement standard operating procedures.
- Coordinate and supervise all maintenance activities in the building.
- Conduct frequent physical inspections of the building.
- Enforce building rules and regulations.
- Develop and initiate, with owner’s approval, a preventative maintenance plan.
RESPONSIBILITY TO OWNER
- Obtain copies of all lease documents.
- Review and reconcile all receipts.
- Review critical data file and invoice tenants, as applicable, for cost-of-living increases, Consumer Price Index (CPI) increases, common area maintenance (CAM) charges, property taxes, insurance, and fixed incremental rent increases.
- Implement assertive collection procedures.
- Obtain all documents required by the lease, such as the Certificate of Insurance.
- Establish and maintain a Chart of Accounts specific to the property.
- Establish necessary trust accounts, determine appropriate signatures for the accounts, and determine spending limits and procedures for obtaining appropriate ownership approval for amounts exceeding the contractual spending limit.
- Control and verify all purchases.
- Prepare monthly and annual statements including Income and Expense Statement, Rent Roll, Rent Reconciliation, and General Ledger to be submitted in a timely manner to owner’s C.P.A.
- Insure timely payment of all invoices.
- Prepare a cash-flow analysis.