Experienced owners of commercial property understand that one of the most important decisions they must make after acquisition of an asset is the selection of a top-notch, highly experienced property management firm. Doing so helps ensure that a property is well-maintained, and also that it will appreciate in value over time. Anything less often leads to the opposite result, presenting owners with a series of challenges that have a deleterious effect on a property owner’s bottom line.
While anyone can put up a shingle and call themselves a property manager, savvy and experienced property owners understand the importance of vetting and securing the services of an experienced company with an enviable track record of success over the long term. Owners must carefully separate the wheat from the chaff, a requirement made all the more important by the fact that many property owners live a number of zip codes or even countries away from their assets.
Brokerage, investment and property management have been my firm’s focuses for over 20 years, so I understand the importance of a property manager’s performance to all parties involved in the relationship. The leading property management firms understand that no shortcuts exist when it comes to building a successful practice. They also know that their primary responsibility is to minimize the owner’s risk and maximize ROI, and that doing so leads to trusting, long-term relationships between property owners and the firms that manage their holdings. Doing anything less is often an abdication of a firm’s fiduciary responsibility to its owner-clients.
While owners of commercial real estate come in all shapes and sizes and from varying economic strata, all share two things in common: They want their properties to be well-maintained and stress-free, and to increase in value over time. A good property management firm understands this overriding premise and is committed to accepting this responsibility on behalf of a property owner.
I am often asked when speaking around the country how owners should evaluate and select a property management firm, either after acquisition of a property or when looking to replace their incumbent property management firm. An obvious starting point is that property owners should take no shortcuts when doing the necessary due diligence.
More specifically, property owners should focus their attention on firms that have extensive knowledge of the marketplace where their properties are located. It is these firms that are more likely to have and maintain strong relationships with local or regional vendors and suppliers that are essential when handling the ongoing, day-to-day needs of almost any property. Such firms also have a grasp of the local rental marketplace, allowing them to provide valued input with regard to what the market will bear when it comes to the establishment of rental rates.
The very best property management firms also have extensive contacts within the construction industry. This is vital due to the fact that elements related to construction are among the most significant expenses that property owners face. I believe the gold standards are firms that have construction management experience in-house — not just because it describes my own company, but because this type of firm allows property owners to have all significant services handled under one roof. But even for those that do not, good property management firms will know and understand how to monitor outside construction companies, thus ensuring that their clients’ properties are receiving construction services of the finest quality and at the best possible price or cost.
Last but not least, property management firms that take the time to understand each individual owner’s needs, goals and objectives usually find themselves in good stead. The maxim “one size fits all” certainly does not apply when it comes to the management of real property. But just as every property owner has somewhat specific goals and objectives that fit their own unique set of circumstances, property management firms are also distinct from one another. It is important that property owners find the firm that best matches their own goals and objectives, and, ideally, that they can build a long-term, trusting relationship with. They should settle for nothing less, because making the right choice helps ensure the value of their holdings, both now and well into the future.