3 Things to Look for in a Commercial Property Management Firm
It’s been said, with tongue in cheek, that a good commercial property manager is worth his or her weight in rent money. And while it is certainly imperative to have a consistent cash flow to make commercial property an attractive passive investment, it is but one aspect of what comprises a successful commercial property management firm. In evaluating potential commercial property firms, look to:
1. An understanding of the market
Whether the property is an existing enterprise with carryover tenants or a new build seeking its initial occupants, understanding the specifics of the local market is essential to effective property management. A great property management firm is knowledgeable of the tenant needs, purchasing procedures, marketing analysis and other contract specifications from potential tenants. Do they present a variety of property options to meet tenant demand? How does the property management company advertise when a lease is about to expire to minimize vacancies? Do they provide marketing campaigns through special events, property newsletters, brochures, advertisements, videos, and attractive signs on-site? Do they have a clear overview of the surrounding commercial and residential areas? These insights will help set the right market rent for a particular lease. The market is dynamic and the successful commercial property manager will be right on top of the changes, hopefully ahead of the curve but never lagging behind.
2. An understanding of the law
It’s not as if a commercial property manager needs a law degree, but a single incident involving a disgruntled tenant can be extremely costly. There are a copious amount of state and local laws, as well as some federal regulations, that must be adhered to in such areas as:
- Safety and property conditions
- Tenant screening
- Handling security deposits
- Collecting rent
- Terminating leases
- City construction & building requirements
- ADA requirements
Avoiding major legal costs where possible is worth whatever management fees are being paid many times over.
3. A proven track record
You want to be assured the commercial property management firm you select is up for the task. It should have verifiable experience with the type of property in which you wish to invest. The best companies have proven operational procedures that have been developed over years of successful management. Standard practices should be in place for every property managed, along with specific ones tailored to the individual needs of each.
The objectives of investing in commercial real estate may be building future wealth and security, tax benefits, portfolio diversification or some combination of these. Primior has the experience and knowledge required for successful investments in commercial property. Let us explain how we can help you achieve your investment goals.