Real estate companies offer a variety of services. This column typically focuses on topics directly associated with property management, but the services of property management personnel will sometimes overlap with the services of a real estate agent and visa versa. This month, we are going to talk about some key ways that these two real estate professionals can work together on a variety of real estate assignments.
Securing New Tenants – One important way that a leasing agent and property manager can help each other is when trying to lease space to a new tenant. While the agent will know the general market facts and be able to compare and contrast one location to another, no one will know a specific building better than that building’s property manager. They can provide detailed information on topics such as HVAC systems, fiber/data lines, historical operating expense information and nuances that may be associated with specific spaces, including location of a data closet, detail on individual HVAC controls, existence of dedicated supplemental cooling units, etc. Having access to a knowledgeable and accessible property manager can typically make the difference in a tenant’s decision to locate to a property.
Renewal of Existing Tenants – When it comes time for an existing tenant to renew, the property manager can once again make the difference with a tenant’s decision to stay or relocate. If the tenant has had a good experience during the term of their lease, they are much more likely to stay. Conversely, a bad experience may be all that a tenant needs to push them to look elsewhere. Since the property manager is typically the primary interface between the tenant and the property, they become the “face” of the property. Additionally, their insight and perspective can be very valuable to the leasing agent when shaping the renewal efforts, as they will be well aware of any special needs or requirements of the tenant.
Providing Leasing Intelligence – A property manager can be a great source of information for leasing agents. They often know positives and negatives associated with specific spaces within a property and can help an agent accentuate the positives and address (and hopefully minimize) the negatives. They also know various tenant “hot buttons” – things tenants tend to like about the property and what they try to avoid. Finally, property managers run in different professional circles as compared to real estate agents. This can provide additional industry insight and perspective that will ultimately supplement the leasing efforts.
Providing Property Management Intelligence – Likewise, leasing agents can be a great source of information for property managers. Agents are usually familiar with a variety of properties in a specific category and/or geographic area. Using this enhanced perspective allows them to bring back “best practices,” such as property management concepts that are working well at other properties. They can also let property managers know concepts that may not be working so well. Finally, leasing agents may be privileged to information from tenants regarding operational items that they like to see at a property, ranging from services to amenities to the handling of billing or invoices. This can all be valuable information to a property manager and allow them to perform at a higher and more effective level.
Assisting With Acquisitions – While most focus on the economic aspect of a potential acquisition, property management can offer an additional perspective. This is especially true during the due diligence process, as this group tends to be much more tuned into operational aspects of the building that are working well and aspects that may not be working so well. While a real estate agent can help to substantiate important items, such as leasing comparables, market leasing assumptions, leasing velocity and sales comparables, a property manager can certainly augment this information by offering a variety of building specific observations.
Assisting With Dispositions – Similar to the value offered during a potential acquisition, property management professional can be just as important when the decision is made to sell. In fact, potential buyers will often want to speak with the property manager and building maintenance staff as part of their due diligence. Smart sellers will engage the assistance of the property management people prior to actually listing the property for sale. By doing this, they will be able to address and correct various issues that will enhance the property’s value. Perhaps an HVAC unit needs to be updated or the landscaping is dated and in need of upgrading. Small things like this may go unnoticed by the building owner, but can dramatically enhance the property’s marketability once it is officially placed on the market for sale.
Property managers perform a variety of vital functions, but including their efforts to larger initiatives, such as leasing, acquisition or disposition decisions can offer a very valuable supplement. As the old saying goes, “It takes a village,” and property managers are an important part of this team. Ira Krumholz CPM